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A CHALLENGE MARITIME EUROPE’S “LOST FOR EU REGIONS SECURITY STRATEGY GENERATION”

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Issue Contributors Jörg Asmussen, Michel Lebrun, Martin Banks, Alexandra Papaisidorou, Valbona Zeneli, Maarten Trautmann, Nikos Lampropoulos, Jens Erik Gould, Elizabeth Rudd, Ioannis Parisis, Mei-lan Stark, Antonis Zairis

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Founder

06 EDITORIAL The new EU leadership: liberals left in the cold.

Christian Democrats and Socialists share the loot.

08 OPINION

14

Let’s stop talking about Europe’s ‘lost generation’ of young joblessEconomic crisis in eurozone – the case of Greece

14 COVER STORY China: An Economic Blip?

Ingeborg Graessle: “Chinese Economic Power an Opportunity for Europe” China’s Interest in Central and Eastern Europe President Ma: Taiwan’s future is up to its peopleg

22 EU AFFAIRS Maritime Security Strategy for Europe.

22 27 42

24 ENERGY New economic incentives for the natural gas use

27 SPECIAL REPORT Overcoming the recession: a challenge for EU regions!

International economic crisis, regional solutions Catiuscia Marini: “EU should loosen the constraints of the Stability and Growth Pact” Sir Albert Bore: “An EU urban agenda needs to strengthen dialogue between the EU, member states and cities, engaging the different levels of government” Marek Wozniak: “The development of economic growth and employment should primarily take place at local and regional level” Georgios Kaminis: “We need to work to address a range of local development issues focused on social, economic and urban revitalisation” Bas Verkerk: “It is important to reduce the administrative burden generated by European rules and funds”

40 REGIONAL POLICY Leadership needed for the Ionian Adriatic Strategy

42 TRENDS The International Trademark Association takes it’s Annual Meeting to Asia European e-commerce turnover booms by 16%

48 LEADERSHIP Strategic Thinking: Creating an integrated perspective of the enterprise

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50 LAST PAGE 15 Ways To Increase Your Productivity And Effectiveness As An Entrepreneur

For previous editions archive and up-to-date information on major topics and events you may visit our website http://www.europeanbusinessreview.eu

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A BRUSSELS VIEW

The new EU leadership: liberals left in the cold.

Christian Democrats and Socialists share the loot.

by N. Peter Kramer, Editor-in-Chief

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Poor Guy Verhofstadt, leader of the EU Liberals (ALDE). A few months ago he presented himself as the new President of the European Commission: ‘When this man speaks, Europe listens’ was the text in his commercial.

But the liberals lost the European elections and became the fourth instead of the third biggest group in the European Parliament, after the Christian Democrats (EPP), Socialists(S&D) and... the Euro critical conservatives (ECR). So no chance for Verhofstadt (if he ever had one) for this function. To create a chance for another EU topjob, Verhofstadt chummed up with the EPP and the S&D and they got JeanClaude Juncker (EPP) into the Commission Presidential saddle.

But Verhofstadt and his Liberals are still empty handed. The Christian Democrats and Socialists shared the loot. The President of the Parliament is called Martin Schulz, a German socialist, who will stay in his function for another two and a half year.

The Polish Prime-Minister Donald Tusk, member of the EPP family, became Herman van Rompuy’s

(EPP) successor as President of the European Council and Federica Mogherini, an Italian Socialist, was appointed the next EU foreign policy chief, taking over from Catherine Ashton (S&D).

Ms Mogherini, Italian Foreign Minister, was initially blocked by eastern EU member states who feared she is too Russian friendly. But at the European Summit which decided the appointment only Lithuanian President Dalia Grybauskaite abstained. Evil tongues say that she was aiming for the position herself.

Van Rompuy told the press, after the introduction of his Polish successor, that Tusk faces three big challenges: the stagnating eurozone economy (but Poland is not a member of the Eurozone…), the risk that the UK will quit the European Union (but it seems that he is good friends with the British Prime-Minister, David Cameron, although he can’t speak a word of English), and last but not least the Ukraine-Russia crisis. In his first speech in his new EU function Tusk suggested a clear solution for this crisis: let’s strengthen NATO! The Cold War strikes again...

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OPINION

Let’s stop talking about Europe’s ‘lost generation’ of young jobless

by Jörg Asmussen*

Instead of wringing our hands over the youth unemployment figures, says Jörg Asmussen, European leaders must develop a new discourse to ensure that today’s young will be a creative force

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OPINION

Y

ears of crisis in so many of the EU’s member states have hardened into a single key question: How can we save European youth from becoming a “lost generation”?

Most people across Europe care far less about interest rates on sovereign bonds than about the fate of young people in their neighborhood or their own family. And most of us strongly believe that politics should be about providing young people with peace, stability and prosperity through education, training and job opportunities.

Settling young Europeans into work would have an enormously positive impact on the EU economy and social fabric. And although we have made significant progress in dealing with the crisis, it is still far too early to declare victory. Only when sustainable new jobs are created will the crisis be truly over.

Long before the 2008 financial crisis and the subsequent economic slowdown, Europe’s young people aged between 15 and 24 were already the most affected by unemployment. Over the last five years, the situation deteriorated dramatically. Over 5.5m young people in the EU of 28 are unemployed, nearly a million of them in Spain alone. But youth unemployment doesn’t just affect the southern European countries hit hardest by the crisis. It is also a challenge to countries that have escaped relatively unscathed like the United Kingdom, where the numbers of young unemployed increased by 60% between 2004 and 2013. In the Netherlands, youth unemployment has seen a sharp rise of 75%, leaving Germany as the only EU member state where youth unemployment has been steadily dropping since 2005.

Although a closer look at the demographics of the unemployed reveals that it is the less qualified who are over-represented amongst the jobless, the unemployment rate for young graduates in the EU-27 from 12% to 18% between 2008 and 2012. And the problem has become much more structural, with about one third of Europe’s jobless young now registered as long-term unemployed.

Unemployment figures provide only a limited picture of what’s happening. Eurofound has estimated that in 2012 more than 700,000 adolescents in the EU-27 were so discouraged that they did even not look for jobs and so don’t figure in the unemployment statistics. The fairly new concept

of the NEETs – those “Not in Education, Employment or Training” has been established to measure the percentage of adolescents who fall into that group. In Spain, Greece, Italy or Croatia, a very worrying one fifth of those countries’ young populations are now classified as such.

As well as all this, young Europeans often face the challenge of atypical employment contracts and the related problem of what’s being called “labour market segmentation”. In 2011, 42.5% of young Europeans were on a fixed-term contract, with a third of them doing so involuntarily. Fixedterm contracts imply economic uncertainty because in some countries they involve limited social security coverage. And when in conjunction with labour legislation that protects permanent contracts, it is workers with fixed-term contracts who are the first to be dismissed at times of crisis.

Recent analyses suggest that the share of young people who work in Europe’s informal economy – about 17% – is more than double the level of older workers. In other words, young people in the EU are more at risk from both a legal and economic stand point.

When adolescents are hit by unemployment they undergo a “scarring” effect. To begin with, suffering from youth unemployment can negatively affect their level of wages for decades to come.

Having been without a job in one’s past is the most significant factor explaining a person’s current unemployment. And, of course, anyone who was unemployed in their youth can eventually expect lower state pension benefits.

The personal consequences of unemployment are obviously very damaging, correlating as they do with social exclusion, poverty and poorer health. Being unable to support a family of their own keeps many young Europeans at home: in 2008, 46% of 18 to 34 year-olds in the EU were still living with at least one parent, making them far less likely to start their own family. Psychologically, unemployment leads to lower self-esteem and discouragement, sometimes causing mental illness. Some studies have even found a correlation between youth unemployment and suicide, along with lower life expectancy.

Beyond these personal costs, society as a whole is affected negatively by youth unemployment at a fiscal and economic level. On the public rev-

EUROPEANBUSINESSREVIEW

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OPINION

enue side, no job implies no contribution to social security and no payment of income tax. As to the public expenditure side, when eligible, the young unemployed receive social assistance or unemployment insurance and benefit from labour market policies and special programmes.

The economy suffers from lost productivity and lower consumption, while indirect societal consequences like higher crime rates cannot be underestimated. Against a background of Europe’s falling demographic development, the deterioration of young people’s skills during periods of inactivity is equally problematic.

The most important consequences on a societal level are the decline of social cohesion as well as a dwindling of confidence in public institutions. This crisis of trust is often projected onto the EU-level, where both the crisis and the hardship caused by necessary adjustment measures are perceived to stem from. Unemployment creates an unequal society that divides generations to come between insiders and outsiders, winners and losers. Those on the losing side are more inclined to mistrust our political institutions currently in place, on both a national and European level. It’s a crucial challenge for the EU, because

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if Europe is to be more closely integrated both economically and politically, that will have to be based on the support of its citizens.

With this firmly in mind, we need to look forward to policies for the future. Europe has never seen as well-educated a generation as today’s. We must therefore develop a new discourse on how to make best use of their competences by providing young people with the balanced mix of freedom and support that will ensure they become a creative force.

The whole nature of the global economy has undergone major change due to new communications and other technologies and changing political power structures. Countries need to adapt their policies to this changing environment, for the aftermath of the worldwide economic crisis presents a window of opportunity for necessary structural reforms.

These reforms differ in each EU member state. For some, the priority should be to change labour legislation and fight the segmentation of the labour market that discriminates against young people.

Other countries should prioritise education and training reforms. In Germany, the dual system of vocational training has proven an effective instrument for education and training that also facilitates

OPINION

smooth labour market integration, inspiring the EU to launch the European Alliance for Apprenticeship.

Germany has shown its support by signing several Memoranda of Understanding with other EU countries most affected by the crisis, but it takes time to establish apprenticeship schemes. Internships can be an alternative source of practical experience, and the EU labour ministers have recently adopted the Quality Framework for Traineeships.

Many structural reforms rely on support from the social partners, yet in some EU countries the relationships between these partners is itself in serious need of reform. Historical reasons or labour market changes mean that collective bargaining might not be co-ordinated enough for social partners to fill their role and provide for an effective labour market and training system. The EU plans, therefore, to foster social dialogues at national and European level.

Using the EU Youth Guarantee that was adopted in February 2013, all structural reforms concerning youth unemployment could be brought together.

This offers an opportunity to think strategically about all the issues attached to youth unemployment, and to develop clear-sighted plans for sustainable employment policies that concentrate on the potential of the generation to come. And the EU’s Youth Employment Initiative support the implementation of these plans with €6bn.

The geographical disequilibrium of labour supply and demand is serious, yet mobility could also serve as a mechanism to encourage entry into the labour market of young people. Labour mobility can help overcome the skills shortages in thriving but ageing economies, and if it is to support mobility within the EU, the EURES network of European employment services should be made a more effective placement service.

When it comes to encouraging mobility amongst young people, another example from Germany that could benefit other European countries is the MobiPro-EU programme. It offers young Europeans logistical and financial assistance help for taking up an apprenticeship in Germany or seeking qualified employment in areas where Germany’s own market lacks an adequate supply. It’s a programme that’s been so successful that even after a tripling of its funding, no further applications can be received at present.

As well as its obvious economic advantages, mobility increases inter-cultural and language skills for migrants themselves and among their hosts. Mobility can foster the European identity by creating personal ties, for it is through small companies, schools and universities that Europeans come together.

Jobs aren’t created out of the blue, and the best matching system is useless without the job opportunities to be matched. Throughout the EU, two thirds of the non-financial business economy workforce is employed by small and medium enterprises, and in Germany four out of five apprentices are trained in them. Targeted support for SMEs through the European Investment Bank is highly valuable, and its “Skills and Jobs – Investing for Youth“ programme is now offering €6bn every year to businesses and public institutions that employ and train young people.

In these times of economic restructuring, it’s crucial that people should start new businesses. Today’s well-educated young generation is an immense source for new ideas and initiatives, and to help the starting of new businesses, the EU has several programmes for micro loans. That’s important, as is the EU’s resolve to encourage youth entrepreneurship. But most important of all is the need to overcome any discourse about Europe’s “lost generation”.

* Germany’s Permanent State Secretary at the Federal Ministry of Labour and Social Affairs. Former member of the executive board of the European Central Bank.

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OPINION

ECONOMIC CRISIS IN EUROZONE – THE CASE OF GREECE

by Dr. Zairis Antonios*

It is interesting to be mentioned that during the last quarter of the twentieth century, a significant and rapid growth has been noted in international trade and finance.

This trend also led to foreign exchange, the increasing lending from banks, increasing number of financial assets and governmental bonds.

T

aking into consideration all the above, it can be easily understood that the phenomenon and trend of globalization during the twentieth century led to the booming and development of world trade upon the involvement of aspects which were also significantly developed around the world.

Basic Reasons and Causes for Economic Crisis in Greece Major factors which affected Greece’s economy; they are those of lower figures of purchase of goods and services of different nature around the world as well as the decision making on behalf of all big

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organizations inside Greek economy for “freezing” of any future investment in the various fields that also operate as enforcement on behalf of Greek Government to impose financial measures to citizens and businesses in order to prevent from any possible future crash.

Concerning the aspect of the structure of the country’s, it could be said that this has been affected seriously and actually has been changed after the entrance of Greece in the E.C. The various producers had to find appropriate ways to improve the manufacturing and production of their goods.

It can be also understood that the volume of im-

OPINION

ports was increased and the volume of exports remained considerably low, so Greece is considered to be a country of imports rather than of exports.

As to the technological capacity produced and existed in the country, it is true that the various local firms in Greece had a clear chance to import goods and products of high technology and make the relevant research on their technological basis.

But things actually did not happen as most Greeks like to happen into the European Community and the Monetary Community. The emerging problems were concerned to the cause of unemployment in the sectors of agriculture and industry for the first semester of 2009 and until now.

Another major group, which was also affected since 2009 in Greece, it was that of raw materials and the “time to market”. Those activities were closely concerned with the aspects of transport, warehousing, logistics and supply chain, where the time and quality are considered to be essential dimensions of competition.

Consequently, as those exports were not increased, Greece did not have the power to make considerable imports of technological goods and increase the number of trade and the capacity of such products.

Moreover, it is a fact that since 2005, many industries in Greece stopped their operation in local basis and started new ones in countries like Bulgaria and Romania.

Social, Trading and Financial Characteristics of Economic Crisis in Greece since 2008 and Onwards It is expected that the rate of unemployment decreased to 26.80% in March of 2014 from 26.90% in February 2014 and 27.20% in January fluctuating from 27.7% in December 2013. It’s worth noting that unemployment rate in Greece averaged 13,88% from 1998 until 2014,reaching an all-time high of 27.7% in September 2013 and a record low of 7.30% in May of 2008 .

The seasonally adjusted unemployment rate in November 2013 was 28.0% compared to 26.3% in November 2012 and 27.7% in October 2013. The number of employed amounted to 3.550.679 persons. The number of unemployed amounted to 1.382.062 while the number of inactive to 3.376.643.

Greece was facing an extreme form of crisis and very deep recession. This deep recession has actually forced government authorities in the country to proceed to some serious spending cuts such as the pensions and salaries of the employees in the public

sector, in combination with the imposed tax duties which have been hiked repeatedly over the last two years for the return of rescue loans by the I.M.F. and the rest countries of Europe (Greek Ministry of Economy and Finance, 2014).

Concerning the Greek citizens’ purchase power, it could be said that all the continuous salary cuts have actually imposed specific limits to households’ spending during the last four years.

Furthermore, the annual (average) income of citizens in Greece declined from 25,750 euros in 2012 to 15-16,000 euros in 2013. The pensioners’ income has been decreased by 4.2 billion euro in total within one year too (Greek Ministry of Economy and Finance, 2013).

To this problem, it has also to be added the increase of taxes by 15% since nowadays, meaning also a reduction to their annual income by 50%.

Except from that fact, it is also a reality that banks have made serious cuts in loans’ offering, either for private or professional reason.

Finally, except from the above, it has to be said that the level of trade balance in country of Greece, also tends to minimize.

In this context, it is important to mention that particular minimization of trade balance it could also lead to the decision for some multinational organizations in subject country, something that will have as a result the increase of unemployment rates, further minimization of consumers’ spending and by far minimization of GDP rates.

To conclude, it should be said that in case that country of Greece will not do enough so as to convince its creditors to continue any flow of funding, then this will be a great default. But most of economists in our days are not actually worried as this would not automatically mean euro exit. This is because most of the countries belonging to EU, appraise to have a steady economy and try to be protected against the “financial danger” spreading from Greece to rest countries in South Europe.

* Vice President of the Hellenic Retail Business Association.

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COVER STORY

China: An Economic Blip?

by Jens Erik Gould

Earlier this year, the country long-heralded as an engine of global growth quickly became a source of collective woe. China’s enormous economy grew at its slowest pace in 18 months in the first quarter, leading economists to reduce their growth forecasts and equities investors to shift to a bearish stance. The slowdown proved short-lived, though, and growth in the Middle Kingdom picked up again in the second quarter.

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COVER STORY

S

till, a large swath of the market remains unconvinced: did the economy actually turn a corner or is the upswing merely a temporary blip?

Chinese policymakers can claim some credit for helping the economy shake off the blues. Moderate policy measures the government instituted in a bid to help the economy seem to have worked, including accelerating investment in railways and lowering corporate tax rates for small and medium-sized businesses. And a handful of economic indicators are flashing green, including factory activity, which expanded in June for the first time in six months, according to the HSBC/Markit Flash Manufacturing Purchasing Managers’ Index. Particularly impressive was the sub-index for new orders, which hit a 15-month high. Economists also stopped lowering their growth expectations: the average forecast currently sits at 7.3 percent for the year, not far from the government’s target of 7.5 percent.

But lurking beneath this apparent progress are persistent structural problems, according to Andrew Garthwaite, an equity strategist in Credit Suisse’s Investment Banking Division. His main source of concern is China’s property market. Real estate prices, which were on a constant upswing for nearly two years, finally reached untenable levels, and the average prices of new homes in 70 major cities fell 0.2 percent in May and then 0.5 percent in June. And the boom could easily turn into bust, as headlong construction threatens to create a marked excess in supply. Housing starts are 22 percent higher than the number of homes sold, while vacancy rates are at least 15 percent in urban areas, according to Credit Suisse. And China won’t be able to brush off a housing decline: real estate investment accounts for onefifth of China’s gross domestic product and one-third of local government revenue.

There are other indicators that don’t sit well with economists either. The job offer to applications ratio, for example, has hit a new high. That points to a shortage of manual labor, which could hamper any

renewed growth. Iron ore prices have fallen as well, suggesting a slowdown in steel production and infrastructure investment. And the portion of GDP accounted for by investment-currently at 46 percent-is the highest it’s ever been. That’s worrisome, Credit Suisse says, because investment-driven growth (as opposed to consumer-led) is causing excess capacity in sectors like automotive, as well as deflation in the producer price index, which measures the average change in the selling prices received by domestic producers.

And this all points to an inescapable reality for China: it can’t be Superman forever. It’s unlikely that even the long-term reforms the government is undertaking-from land reform to allowing markets a greater role in setting prices-can stop the law of large numbers from bringing the country’s growth rate down sooner or later. China could continue to defy traditional theories about how long developing economies can grow at a high rate; so far, it’s done just that. But China’s economy will be 80 percent larger in 2014 than it was in 2008, and the larger it becomes, the harder it will be to maintain a high rate of growth.

Also, as the middle class grows and wages increase, China won’t have as much cheap manufacturing labor to prop up high growth rates.

Garthwaite believes that growth would have to dip below 5 percent for the slowdown to have a seriously negative impact on equities and global GDP. Since that’s not going to happen tomorrow, Credit Suisse still recommends a benchmark weighting to institutional investors despite concern about the real estate imbalance. In part, that’s because China has huge fiscal flexibility: while official figures show government debt to GDP at 56 percent of GDP, the country could conceivably finance a debt to GDP ratio of 170 percent. But things are only going to get more challenging from here. “The big problem in China is when growth really slows down meaningfully,” Garthwaite says. “Our view is optimistic, but in the medium term we’re nervous.”

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COVER STORY

B

Ingeborg Graessle: “ Chinese Economic Power an Opportunity for Europe”

by Martin Banks

A senior member of the European Parliament’s China Delegation says that growing Chinese economic power is “first and foremost” an opportunity for the Chinese people and also for Europe.

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ut Ingeborg Graessle, a German Member of the European Parliament, insists that a “carefully initiated, problem-oriented dialogue” is needed between the two sides.

The centre right politician says this is vital to develop a “mutual understanding” and “common solution.”

“That is what can help to overcome the inefficiencies of the EUChina partnership,” she said.

In an exclusive interview with EBR, Graessle, said that as a member of Parliament’s delegation for relations with the People’s Republic of China she is “eager to better understand this large and diverse country and to foster the relations to China.”

“As I see it, the wish for a European-Chinese Partnership is mutual.

Both partners are longing for a better cooperation. However, for Europe, foreign policy is both, about values and interests. This is what makes the functioning of the EU-China partnership at times ineffective and reciprocally provoking.”

Graessle says that next to good economic relations and flourishing trade, peace in the region is of “vital importance.”

As an example, she cites the peaceful coexistence between Taiwan and China, saying this is “as important” as good relations between China and Japan.

Graessle, who chairs the Parliament’s influential budgetary control committee, describes the current Chinese economic policy is “impressive.”

“Within only a few decades, China has succeeded to set its economy on a sustainable growth path and has lead millions of its citizens out of poverty.”

From a German perspective with the Wirtschaftswunder-experience and the concept of ‘Sozialer Marktwirtschaft (social market economy), she believes that besides efforts to establish a “free, output-oriented, competitive” market economy in China, other issues need “constant” attention.

These include social security, social justice, social peace and ecological sustainability.

“In my opinion,” she says, “a functioning rule of law with clear property regulation and the adherence to democratic values and human rights are critical pillars for long-term success.”

The MEP asserts that corruption and nepotism are “paralysing venoms” for economic and social development.

“Tackling these issues will be challenging, but eventually beneficial for China.”

On the economic front, Graessle is not sure whether the Chinese input factor driven growth has come to an end, yet.

“However,” she adds, “in the long-term, the reallocation of capital and labour will only provide for growth to a certain point. At this point, input factor efficiency and innovation driven economic growth will need to be pushed into the centre of economic policy.”

She goes on, “Anyway, there is still an enormous growth potential for China.”

COVER STORY

Graessle is tipped to lead the China delegation, which was established following the first direct elections in 1979. Inter-parliamentary meetings have being taking place since 1980.

EU relations with China were established in 1975 and are governed by the 1985 EU-China Trade and Cooperation Agreement. The EU is China’s biggest trading partner, while China is the EU’s largest source of imports and second largest two-way trading partner.

Annual summits and regular political, trade and economic dialogues are held, including over fifty thematic dialogues and agreements.

The delegation’s main task is to maintain relations with the National People’s Congress (NPC) through regular inter-parliamentary meetings. It is also the focal point for relations with the Legislative Councils of the Special Administrative Regions (SAR) of Hong Kong and Macao.

The Heidenheim-born deputy believes the current problem of slower growth in China has two causes: On the one hand, the ongoing “flight to safety” in capital markets has lowered the influx of foreign investments in the Chinese economy, thus reducing GDP growth.

“At the same time the beginning of the end to a glut of money – both in the United States and in China – has unfolded with depressive effect. The availability of cheap money has led in the last few years to a very high credit growth in the Chinese economy. Emptyapartment buildings and overcapacities in a lot of industries are signs of a debt dependent and highly risky development in China.”

China’s total debt load grew within 5 years from 150% to over 250% of Chinese GDP and Graessle believes “that is enormous for an emerging country.”

The risks associated with this big Chinese credit volume “need to be addressed” and, she predicts, the effects of the adjustments may be “harsh especially since all the highly indebted undertakings and banks are held by the Chinese government.

“China will need to proof to the world that it takes sustainable development serious.”

But Graessle, a member of the Christlich Demokratische Union Deutschland, still asserts that the growing Chinese economic power is “first and foremost an opportunity” for the Chinese people and for Europe.

However, there are certain risks attached to this development.

“The sheer size of the Chinese economy and the current political system has its natural downsides. The scale of external effects – may they be of economic or eco-

logical nature – and the inter-dependencies with such a huge Chinese economy should not to be underestimated. With a growing economic power, there will also be a growing global responsibility of Chinese leadership.”

On China’s recent generational change in political leaders, she says, “I am a realist. In the end, the current Chinese leadership will need to be measured by their track record. Until then, I would always recommend real reforms – towards a broader social and economic participation of the Chinese people.”

Moving to China’s position in the world, Graessle, who, after May’s European elections, is just starting her third term as an MEP (having first been elected in 2004), said, “Already today, China has an important role in the architecture of the ‘global governance’ order. It is a real European interest of developing reliable relations to China and foster those of China towards the United States.”

But, despite being largely positive about EU-China relations, she also has some real criticisms of China, adding, “Corruption and nepotism are paralysing venoms for economic and social development. To encounter both is a challenging but necessary and at the same time a highly beneficial undertaking for the Chinese economy and society – as it still is in Europe. Human rights and the rule of law, however, are not subjected and should not be sacrificed for the fight against fraud and corruption.

“They are rather preconditions for a true success. Interlinked to this issue is also the fight against contraband and counterfeit. There is still a lot that needs to be done.”

Graessle, who is well known within the EU as an strong proponent of increased transparency and accountability for the institutions, said that EU-China relations can be improved by better working together, “not only politically but also by tackling global issues like organized crime.”

As rapporteur for OlAF, the European Anti-Fraud Office, she found it “unfortunate” that there is no longer a liaison officer of the Brussels-based agency to the Chinese authorities.

The OLAF liaison officer in China was dealing with smuggling of contraband and counterfeit of tobacco products until 2012.

This prompts the 53-year-old to declare, “I think we need to cooperate with China in mutual respect wherever it is beneficial and possible to both the European and the Chinese people.”

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COVER STORY

China’s Interest in Central and Eastern Europe

by Valbona Zeneli*

The Middle Kingdom sets its eyes on Europe’s eastern half, to get a beachhead into Western Europe.

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hina is a magnet for European companies. With a trade volume of almost $600 billion, and a trade deficit with China at about $150 billion, the European Union is China’s largest trading partner.

The EU and China are seeking to bring trade to $1 trillion by the end of this decade, in line with the EU-China 2020 Strategic Agenda for Cooperation.

However, the benefits of this trade relationship are unevenly distributed in Europe, with more advantages for countries in the continent’s North.

China is seen as using Europe as a hedge against the United States. That is one reason why China already stepped up purchases of eurozone sovereign bonds. China has also invested across strategic industries in Europe and infused a lot of capital into property markets.

What about China and the countries of Central and Eastern Europe? While China’s interests in the region are manifold, Chinese companies so far have only invested in the low billions there.

To bolster financial cooperation, a credit line stretching up to €10 billion was one of the proposals put forward at last year’s China-CEE leaders’ summit. It also allowed for the establishment of branches of Chinese financial institutions in Eastern Europe.

China searches for new markets China looks at the CEE countries primarily as a market for its own strategic industries, exports, and as a large window into Western European markets.

As Beijing continued to look for new markets, it made a pledge to double trade, although increasing imports of Central and Eastern European products to China seems relatively challenging.

Central and Eastern Europe-made products can-

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not compete on price with the lower-cost products made in China, nor do the region’s companies innovate enough to compete on quality in the Chinese market.

China also offered to satisfy the urgent needs for infrastructure in CEE (such as in high-speed and freight railways, nuclear and other forms of power, roads, ports and telecommunications).

Through investments in central Europe’s infrastructure, Beijing wants to accelerate the creation of a network of ports, logistics centers and railways to distribute Chinese products and bolster East-West trade.

Finding more energy abroad Another important pillar of China’s expansion policy concerns securing its present and future demand for commodities, mainly by investing in countries rich in natural resources.

Especially attractive is the Balkan energy sector. Major western utility companies are unwilling to make risky investments, which gives China some options.

Countries such as Albania, Montenegro and Bosnia-Herzegovina are attractive for their hydropower capacities. Macedonia, Serbia and Croatia attract investment for their wind energy potentials.

More generally, China is keen to proceed with projects in nuclear, wind power, telecommunications

COVER STORY

and high-speed railway sectors. It has agreed to build a high-speed rail line linking Hungary to Serbia and pledged to help Romania connect with Hungary.

Where to from here?

For Beijing, trade relations with Southeast Europe mainly focus on exchanges with the largest and newest EU countries. The still transitional economies of the Southeast Europe allow China to circumvent some of the EU’s anti-dumping regulations and export products directly to a market of 800 million people thanks to FTAs with EU. In November 2013, during his meetings in Bucharest with 16 prime ministers from the Central and Eastern European countries, Chinese Premier Li Keqiang called for wide-ranging, multi-tier cooperation aimed at doubling trade and investment in five years. However, China is not exactly an easy partner for the EU. Controversial issues include intellectual property rights, price distortions due to subsidize dumping, unequal conditions for market access, as well as discrimination against EU companies in Chinese government tenders.

And within Europe, although China and the EU signed a strategic partnership in 2004, there is a lack of common understanding in Europe about strategic policies towards China.

* Valbona Zeneli is a professor of national security studies at the George C. Marshall European Center for Security Studies.

Fusing Chinese industry and European technology One of the most significant strategic objectives of China’s investment in Europe is to engage more closely with the continent’s research and development networks.

To some extent, China continues to depend on technology from Europe and the United States. China is not yet an innovation powerhouse, although its spending on R&D is rising very rapidly.

China still spends less than half as much as the EU as a whole and only one-third of what the United States spends on R&D. Chinese companies are good at incremental innovation, but they lag behind advanced countries when it comes to disruptive innovation.

Less than 6% of Chinese patents are protected by global patents, compared to 49% of U.S. patents.

Fifty percent of total exports and more than 90% of China’s high-tech exports are produced by foreign companies operating there.

For Europe, China represents a huge economic opportunity. Chinese labor and capital working alongside European rules and technology - carefully managed - could create significant opportunities for both economies going forward.

Editor’s note: This article reflects the views of the author and is not necessarily the official policy of the U.S. or German governments.

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COVER STORY

President Ma: Taiwan’s future is up to its people

by N. Peter Kramer

Recently Ma Ying-jeou, President of the Republic of China (Taiwan), reaffirmed that Taiwan’s future is in the hands of its 23 million people, an apparent response to Beijing’s statement that the fate of Taiwan is up to “all Chinese people.”

D

uring his visit to mainland China, a member of the Taiwanese opposition party DD, Lai Ching-te said that Taiwan’s future is in its own hands. In a remarkable reaction, mainland China’s Taiwan Affairs Office spokeswoman, Fan Liqing, told reporters that Beijing’s stance on Taiwan has not changed: ‘Taiwan and mainland China are not separate countries, but are two parts of the same nation that have not yet reunited’.

A spokesperson of the Taiwanese Presidential Office said in a statement that President Ma has always insisted, that the future of Taiwan rests with its people and the Constitution of the Republic of China. The Mainland Affairs Council, the Taiwanese overnment body in charge of cross-Strait relations, also issued a statement supporting the right of the people of Taiwan to determine their own future.

APEC best venue for meeting of both Chinese leaders ROC President Ma Ying-jeou said also that, since mainland China’s leader Xi Jinping assumed the presidency last year, he has been very active in developing relations with Taiwan and a suitable occasion for a meeting between him and Xi would

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be the Asia-Pacific Economic Cooperation (APEC) leaders’ summit. Ma said the venue would be acceptable to the Taiwan public, but added that there seems to be some difficulties for Beijing to agree on such a proposal. This year’s APEC meeting will be held in Beijing from 10 to 11 November and will be attended by leaders of the 21 APEC members. Since 1991, Taiwan has been a full member of this organisation which pursues free trade and economic cooperation.

When Xi met with Taiwan’s former Vice President Vincent Siew at the APEC Summit last year, he said that in the “long term”, political differences between the two sides must be resolved and not be passed on from generation to generation.

Ma calls for unity Recently ROC President Ma Ying-jeou urged the Taiwanese opposition to set aside partisanship and work together to pass a bill to monitor crossStrait negotiations. He also underlined the need to ratify the trade-in-services agreement with mainland China, warning that Taiwan risks being isolated by delaying it. Ma stressed that maintaining barriers to trade with mainland China will only weaken Taiwan’s economy, as mainland China is an integral part of the global supply chain. Considering the fact that mainland China and South Korea are about to sign a free trade agreement by the end of 2014, 2 to 5% of Taiwan’s exports could be replaced by South Korean products, so trade liberalisation and cooperation with mainland China is unavoidable.

PEAN & AMERICAN EDUCATION

EUROPEAN & AMERICAN EDUCATION

Ο ΜΕΤΑΛΥΚΕΙΑΚΗΣ ΕΚΠΑΙ∆ΕΥΣΗΣ

ΚΕΝΤΡΟ ΜΕΤΑΛΥΚΕΙΑΚΗΣ ΕΚΠΑΙ∆ΕΥΣΗΣ

ΤO NYC EINAI ΠΙΣΤΟΠΟΙΗΜΕΝΟ KAI ΑΝΑΓΝΩΡΙΣΜΕΝΟ ΑΠΟ ΤΟ ΒΡΕΤΑΝΙΚΟ ΣΥΜΒΟΥΛΙΟ ΠΙΣΤΟΠΟΙΗΣΗΣ (BAC) ΩΣ ΙΔΡΥΜΑ ΠΟΥ ΠΑΡΕΧΕΙ ΑΝΩΤΑΤΗ ΕΚΠΑΙΔΕΥΣΗ

EUROPEAN & AMERICAN EDUCATION

EUROP

ΚΕΝΤΡΟ ΜΕΤΑΛΥΚΕΙΑΚΗΣ ΕΚΠΑΙ∆ΕΥΣΗΣ

ΚΕΝΤΡΟ

EU AFFAIRS

How important is maritime security? «Ask the Greeks», we read in the official webpage of the U.S. Department of States.

«They faced odds of about three to one at the Battle of Artemisium, the sea side of the Battle of Thermopylae. They survived, due partly to good luck, and lived to fight another day at the Battle of Salamis, where they defeated the invading Persians for good.

The Greek ability to secure their maritime domain may have saved western civilization as we know it today.»1

Maritime Security Strategy for Europe A new strategy adopted at the June 2014 Summit

by Dr Ioannis Parisis*

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he EU has vital maritime interests: security of global maritime flows, safety of maritime transport, fishery, energy resources etc. Protecting the world’s maritime routes and lines of communication is an essential dimension of the EU’s security. Some 90% of the EU’s external trade and 40% of its internal trade is transported by sea. Open and safe seas and oceans secure free trade, transport,

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tourism, ecological diversity and economic development. Failing to protect against a wide array of maritime threats and risks may result in the seas and oceans becoming arenas for international conflicts, terrorism or organized crime.

The Mediterranean Sea, the Black Sea and the Red Sea with the Gulf of Aden constitute the main priority geographical areas for the EU, in terms of maritime

EU AFFAIRS

The adoption of the text of the European Maritime Security Strategy, a requirement set by the European Council of December 2013, was among the main issues encountered during the Greek Presidency of the Union, in the first semester of 2014. Maritime security is an issue of fundamental importance for economic growth around the world, at local, regional and international level. security. In principle, they constitute the areas through which Europe contact and communicate with the other two vicinity continents – Africa and Asia.

In December 2013, the European Council called for “a European maritime Security Strategy until June 2014, on the basis of a Joint Communication prepared by the European Commission and the High Representative for Foreign Affairs & Security Policy taking into account the views of Member States”. On 6 March 2014, the Commission and the High Representative issued the Joint Communication entitled “For an open and secure global maritimedomain: elements for a European Union maritime security strategy”.

Based on the elements proposed by the Joint Communication, a European Maritime Security Strategy (EMSS) was endorsed by the European Council of June 2014. The purpose of this strategy is to facilitate a cross-sectoral approach to maritime security, including actions and cooperation among different marine or maritime functions. This would be achieved by pursuing the following four strategic objectives: a. Make best use of existing capabilities at national and European level b. Promote effective and credible partnerships in the global maritime domain c. Promote cost efficiency d. Enhance solidarity among Member States The strategic objectives of the EMSS are the protection of the marine tourism, illegal oil bunkering/ crude oil theft, environmental crimes advance maritime safety of navigation, the protection and sustainable use of the marine environment, piracy and armed robbery at sea, maritime terrorism, human trafficking, human smuggling and asylum seekers travelling by sea, to prevent, defend against and respond to cyber threat, protect populations, assets and critical infrastructure from maritime pollution and dumping of toxic and nuclear waste, ensure security and safety of maritime transportation systems, minimize environmental damage and expedite recovery from catastrophic events

There is also a direct link between maritime security and energy security. A key element of energy infrastructure that needs protection is the means of transportation. Ensuring the vital lanes of communication contribute to enhancing the security of energy shipments.

With EU NAVFOR Somalia, the EU has demonstrated its ability to conduct a maritime operation far away from its borders. Furthermore, NATO and EU are progressively moving closer in the type of tasks and activities they seek to undertake.

The improved maritime surveillance through the use of space and satellite applications, as the Copernicus program, can act as a disincentive for illegal actions and contribute to the reduction of the economic impact of illegal activities and human losses caused by maritime accidents and illegal immigration, while at the same time improves the planning of conventional patrol operations.

The EMSS was adopted in order to ensure an integrated and comprehensive approach, with particular emphasis on threats, risks, challenges and opportunities that exist in the sea. In addition, this strategy aimed at identifying the specific resources and skills required to tackle all challenges, including intelligence, surveillance and patrols, and searching and rescuing maritime transport, European citizens evacuation and other crisis zones, the imposition of the embargo and providing aid to each mission and EU operation conducted within the framework of the Common Security and Defence Policy (CSDP). * Dr Ioannis Parisis is a Major General (ret), International Relations PhD, University of Crete, strategic analyst and author on CSDP and Mediterranean geosrtategy issues. He is founder and president of the Academy for Strategic Analyses (ASA), based in Athens.

1. “Maritime Security, Sea Power and Trade”, U.S. Department of States, by Tom Kelly, Acting Assistant Secretary, Bureau of Political-Military Affairs, U.S. Naval War College, March 25, 2014 (http://www. state.gov/t/pm/rls/rm/2014/223921.htm)

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ENERGY

New economic incentives for the natural gas use New economic incentives are offered by the government, the EU as well as the natural gas market for the use of the socalled “green gas” in transportations, companies and buildings aiming at the combination of saving energy with two different axes, both important for the environmental protection and an economic restart. These initiatives have as a goal to set a clear legal/financial context led to the enlargement of natural gas use by vehicles drivers, industrial and domestic consumers. Furthermore, the main purpose is to be in compliance with EU Regulations concerning the subsidization through an innovative performance and a smart development.

Exemption of taxes for cars fueled by natural gas The government promotes some special measures so as to let consumers take advantage of the natural gas benefits through the following. These are: the exemption of license-paying for natural gas powered cars. So, the tax of 75 euros would not be obligatory for vehicles under CNG system (as it was first considered by the consumers) as it is about an eco-friendly conversion of saving money.

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The above-mentioned decision has been recently taken and signed by the Deputy Minister of Infrastructure, Transport and networks, Mr. Papadopoulos, so as to make clear the misconception of license-paying in cases of a change in exclusive car characteristics. According to Minister: “The natural gas or liquefied petroleum gas (LPG) do not consist a fuel change but it gives the alternative possibility of transportation by being bi-fuel (adding the second type of fuel) and as a result, it can be considered as a change of the exclusive car characteristics. Apart from that, it is also a further burden for citizens who save money during their mobilization and protect the environment at the same time through the use of bi-fuel”, states the Deputy Minister.

It must be kept in mind that the original decision provided taxation charges for drivers that have installed LPG/gas mode fuelling system. This decision emerged reactions from the part of private and professional drivers that use natural gas. These were the ones who characterized this regulation as a pure “tax collection” and as a result the Ministry proceeds to the aforementioned measures.

DEPA contracted with GAZPROM achieving lower prices for natural gas consumers since spring 2014.

Subsidies on energy and innovation Energy, transportation and tourism are the key points for new NSRF which feeds the Greek economy with capitals of 3.6 billion of euro through the program “Entrepreneurship, Competitiveness and Innovation”.

This is the second largest NSFR program (following

ENERGY

the one of “Transport Infrastructures and Sustainable Development”), and it is estimated to multiply further resources if it is estimated the private participation of companies that will be subsidized during 2014-2020.

- ICT infrastructure projects that contribute into the amelioration of business environmental.

- Complete intervention for the support of female employment through the reinforcement of entrepreneurship - Tourism infrastructures for the provision of high quality public services and customer service in cultural places areas of natural beauty.

- Projects that contribute to the modernization of transport and energy distribution system as well as the more effective managing of electricity distribution through smart systems.

The companies that will be subsidized in the context of this program, belong to energetic, environmental, touristic, infrastructural, IT, industrial, food sector etc. Also, the basic points of this program are the extroversion, innovation, creativity, the existence of an exact size for turnover and the sufficient variety of products so as to face the global competition through focus on specialized parts in the worldwide market, sound economic results, multiplied benefits for the economy, start-up activity, limited environmental damage, companies’ cooperation and production of high-added value products.

Saving energy projects are provided by the new NSFR for Municipalities and Domestic Consumers The achievement of these goals is compatible with all the new dimensions based on the Regulations of the European Commission that impose the combination of subsidization with innovation and smart development, as it is defined in “Europe 2020” strategic plan.

This plan has already sent in the European Commission to enter into consultation and it is expected to be approved in autumn in order to be specialized and then implemented.

The actions along with the existing NSFR are: - Strengthening of research and the innovative extroverted entrepreneurship - Saving energy projects for Municipalities and domestic consumers - Strengthening security of energy supply and stability of National System of Natural Gas - Reinforcing competitiveness projects for shopping centers in cities and market’s pop up - Actions for supporting companies’ media (both existing ones and those under establishment) as for the implementation of investments in areas of interests of regions and the stimulation of entrepreneurial skills during crisis.

Further discounts for natural gas consumers Since spring 2014 DEPA contracted with GAZPROM and achieved lower prices for natural gas consumers. After all, the reduction of the price for natural gas supply achieved while a series of other appropriate provisions make the use of natural gas especially profitable for both domestic and industrial consumers.

According to this deal, (that was completed with the contribution of Greek Government and especially the Ministry of Environment, Energy and Climate Change), the supply price of natural gas was decreased to 15%, by approaching the average price of natural gas supply which GAZPROM EXPORT provides to the countries of continental Europe through long-term contracts.

Except of the constitutional changes on the natural gas pricing policy, other DEPA programs offer essential discounts to consumers. An example consists the financing of heating installations that make natural gas use affordable to domestic consumers. In this way, without any banking intervention, both in big block of apartments equipped with central heating as well as single flats with individual heating, which tend to join into the natural gas network, the cost of gas central heating construction is also financed.

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SPECIAL REPORT

SPECIAL REPORT: Overcoming the recession: a challenge for EU regions!

by N. Peter Kramer, Editor-in-chief, European Business Review

The role of regional and local authorities in solving the economic crisis should be improved.

In this special report you find some proof for this statement: successful practice from a Greek, a Dutch, an Italian and a Polish regional politician, all members of the EU Committee of the Regions. The reaction to the financial crisis has inevitably been managed at international and national level. Overcoming the economic recession can be often a regional challenge. The President of the Committee of the Regions, Michel Lebrun, shows it with facts and figures. Regions and cities are the engines to restart growth and creating jobs.

European Business Review thanks the Committee of the Regions for this brilliant eye opener!

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SPECIAL REPORT

International economic crisis, regional solutions

by Michel Lebrun*

The Committee of the Regions The Committee of the Regions is the EU’s assembly of regional and local representatives from all 28 Member States. Its mission is to involve regional and local authorities and the communities they represent in the EU’s decision-making process and to inform them about EU policies. The European Commission, the European Parliament and the Council are obliged to consult the Committee in policy areas affecting regions and cities. It can appeal to the EU Court of Justice if its rights are infringed or it believes that an EU law infringes the subsidiarity principle or fails to respect regional or local powers.

Rue Belliard, 101, 1040 Brussels Tel. +32 22822211 www.cor.europa.eu Follow us: @EU_CoR

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SPECIAL REPORT

T

he reaction to the financial crisis has inevitably been managed at international and national level. But overcoming the economic recession has proved to be mostly a regional challenge. At least, this could explain the shortcomings that have been recently highlighted by a number of reports on the weaknesses of the ongoing recovery. From Eurostat figures to the last European Commission cohesion report to the new OECD regional trends analysis, there is evidence that after a decade of decreasing disparity in Europe, the gap between and within several EU member states are again on the rise. Of course the crisis has had an asymmetric impact: it has further weakened the weakest economies and widened their distance from those that have proved most competitive. The (asymmetric) significant reduction in public investment driven by an overwhelming focus on austerity measures has made the situation worse. The European Committee of the Regions, as the EU’s assembly of regional and local authorities, has demonstrated that this EU-wide problem has regional solutions as in most cases regions and cities are the only engines that are capable of restarting growth and creating jobs, boosting innovation and recovering competitiveness by mobilising local energies and assets on place-specific priorities. Their key role is linked both to investment capacity and to the knowledge needed to better address financial support for growth.

Local and regional authorities are responsible for a substantial share of public expenditure in Europe: in 2011 subnational public sector expenditure accounted for 16.7% of GDP and 34% of all public spending in Europe. Cohesion policy is an important EU tool that has proved its worth in delivering local and regional economic growth. The allocations for the phase 2007-2013 was €347bn, 35.7% of the total EU budget for that period.

According to the European Commission’s sixth cohesion report from 2008 and 2013 public investment declined in the EU by an average of 20% and as much as 60% in countries such as Greece, Ireland and Spain.

Without cohesion policy for those member states who suffered the most from the crisis the fall of public investment would have been 50% stronger.

Furthermore in the case of larger economies where the financial impact of EU cohesion policy is more limited in terms of its share of GDP growth the challenge is to use this money to boost innovation by supporting high-quality projects in areas such as research and development, business internationalisation, renewable energies, sustainable mobility, ICT, modernise public administration etc. In all countries the success of these efforts depends largely on the capacity of the different stake-holders to coordinate, share priorities and

jointly implement investment programmes. This bottomup approach makes cohesion policy one of the most complex but effective development tools available to EU national, regional and local governments. Between 2007 and 2012, the European Regional Development Fund – whose governance sees a key role for regions delivered around 600 000 jobs, supported 200 000 SMEs projects and 80 000 start-ups. Over the same period the European Social Funds supported 5.7 million unemployed people giving rise to 400 000 new enterprises or self-employment initiatives.

Despite these achievements the planning and implementation of the EU’s cohesion policy programmes need to be improved and in the next phase a number of new opportunities and tools will be available for regions and cities. From 2014-2020 the European Union’s regional policy will invest some €450 billion – including national and regional co-financing – on priorities such as supporting SMEs, innovation, education, low carbon economy, infrastructure. A stronger focus on a limited number of objectives will allow for a stronger and more immediate impact in policy areas where EU funding can bring the highest added value.

From a first analysis of the 2014-2020 investment plans presented by EU member states, “Investment for growth and jobs” will count on €336bn Euros. The resources specifically allocated to research and development, innovation, SMEs, low carbon economy will reach €124bn, 22% more that between 2007-2013. A change that is even more relevant considering the overall budget for EU Cohesion Policy has decreased in real terms compared to the last programming period. Nonetheless, to mobilise more resources on boosting the on-going fragile recovery, new provisions have been introduced to allow a stronger integration of cohesion policy instruments with other financial tools in all areas and funds, with new opportunities for financing projects through public-private partnerships. The European Investment Bank (EIB) has a critical role to play given that it currently loans up to €79bn annually and is set to increase this number even more thanks to the 2012 capital increase. Regions and cities are working hard to fully exploit these opportunities but, as we can see from the complex implementation of the youth employment initiatives launched in the recent months, only a real and effective cooperation among all involved levels - from Brussels to local administrations - can put these at the service of the real needs of our economies and make a difference both on timing and quality of EU co-funded growth policies.

Michel Lebrun is the President of the European Committee of the Regions.

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SPECIAL REPORT

Catiuscia Marini:

“EU should loosen the constraints of the Stability and Growth Pact” 30

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SPECIAL REPORT

What are the main challenges facing your region and what impact have EU funds in resolving these issues?

The low growth and stagnation which is affecting the global, European and Italian economy has also hit my own region, Umbria. At a time when national, regional and local administrations face widespread cuts in resources, the EU’s Structural Funds are the only instrument available to support local and regional development. The challenges facing the Umbria region for the 2014-2020 period include the need to specialise and innovate the region’s production system, by means of multi-sectoral, integrated strategies based on local specialisation and upgrading skills, with new cooperation between research and business systems. We need to boost the region’s human capital by facilitating access to education and training opportunities throughout working life, in particular by improving key skills and thus creating conditions that will enable the whole system to become more highly skilled and productive. We need to actively safeguard the region’s resources, so that our economy produces fewer CO2 emissions and is able to exploit its energy resources efficiently while protecting the environment and biodiversity. Amongst other things, this means the use of new technologies and green production methods, with smart and efficient electricity networks; it means promoting inclusive polities for Umbria’s residents, by boosting employment among the active population and achieving a welfare system that focuses on the individual and on support for families, on the quality and flexibility of services, and on harnessing and networking local resources.

Give a concrete example of how EU funds have made to a specific project in creating jobs - what were the challenges and outcomes?

As part of European Social Fund programming, the Umbria Region has been promoting a “research projects” initiative. This scheme has given and continues to give young unemployed graduates living in Umbria the chance to carry out research projects in businesses, universities, public and private research centres and in Umbria’s innovation centres for a period of 6 to 18 months, receiving a monthly payment of EUR 1 200. The project is now in its fifth period; resources for the first two periods (2004-2006) came from the ESF regional operational programme for 2000-2006, and provided 572 beneficiaries with overall funding of EUR 7 518 091.99.

Over the next three periods (2008, 2010, 2012), resources from the 2007-2013 ESF regional OP enabled 1 341 beneficiaries to receive a total of EUR 15 292 613.15. In 2008 the “research projects” initiative had 359 participants and produced good employment outcomes for 34.2% of the individuals observed. The 2012 scheme is still in progress, but an initial analysis suggests an em-

ployment rate of 45.5% after 12 months. Although this figure is not definitive, it shows that performance is improving. These positive outcomes show that our graduates are ready - if assisted by appropriate intervention - to repeat the experience through active policies to help them find stable employment. Research allowances can thus clearly help to create employment or, where this is not possible, at least to create conditions for continuing steps towards labour market integration through participation in active policies.

Within the new programming period 2014-2020 what do you think should be the priorities of EU regional funding in your region?

In 2013 we undertook some preparatory steps for the 2014-2020 programming period in Umbria directly involving local stakeholders, true to the spirit and letter of the guidelines set out in the European code of conduct on partnership. This structured dialogue has been operating in Umbria for 14 years now, under the banner “Alliance for Umbria”. In this context, four macro areas for action under the Structural Funds’ 2014-2020 programming were identified for the region. The first macro area covers research, innovation and the competitiveness of the production system, and is designed to make Umbria’s production system more specialised and innovative. The second macro area, covering the environment and culture, aims to actively safeguard the region’s resources. The third area, covering work, quality of life and social inclusion, seeks to promote inclusive policies for Umbria’s residents. The fourth and last area, spanning education, training and skills, aims to boost the region’s human capital.

What changes, if any, must the EU make to support local and regional authorities boost the economy locally?

The most important thing the EU could do to help local and regional authorities boost economic development would definitely be to loosen the constraints of the Stability and Growth Pact: more especially, by removing all levels of Structural Fund co financing (national, regional, provincial and local) from Pact calculations. Such a step could “unblock” infrastructure projects and public works schemes which are progressing very slowly and are being pursued by regional and local authorities. In addition to this, administrative simplification is needed to make the monitoring system as smooth as possible, for example by digitising administrative procedures and by offering the public and businesses fully interoperable digital services for administrative matters.

Catiuscia Marini is President of the Umbria Region in Italy and First Vice-President of the European Committee of the Regions.

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SPECIAL REPORT

Sir Albert Bore: “An EU urban agenda needs to strengthen dialogue between the EU, member states and cities, engaging the different levels of government” 32

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What are the main challenges facing your city and what impact have EU funds in resolving these issues?

The ability to mobilise and prioritise resources during a period of radical austerity and crisis is the most pressing challenge for cities in recent years. Despite the severity of the crisis, it is Europe’s cities that are best placed to deliver smart, sustainable and inclusive growth set out in the EU’s growth strategy - EU2020.

A second priority must be climate and resilience. We need smarter ways to address adaptation, buildings, energy and resources, transport and mobility and catalyse green growth and behaviour. This is why in 2012 I set up the first Birmingham Green Commission and launched the Birmingham’s Green City Road Map. A third priority must be youth unemployment, an issue which must be at the forefront of the EU’s agenda to prevent us from sleepwalking into an irretrievable crisis where the future workforce does not have the skills to drive the EU from recession to growth. We need to mitigate driving our young people into pov-

SPECIAL REPORT

erty and social exclusion. We need to assess whether EU initiatives such as the youth guarantee and youth employment initiatives make a difference. If not, why not? The EU has invested billions of Euros into employment initiatives but are we making headway into tackling this crisis or merely treading water?

A final priority is social cohesion. More than 40% of Birmingham’s population come from many minority ethnic backgrounds and my city is proud to call itself a truly multi-racial and multi-faith city. Yet our communities’ ability to engage, contribute and prosper is endangered by increased racism in Europe, which has portrayed social mobility and migration negatively.

Evidence demonstrates their importance for Europe, particularly with regards to skills and competitiveness.

Yet the recent European elections saw the rise of extreme-right political parties and anti-Europe campaigners undermining inclusion and cohesion.

EU funds have remained a critical tool for overcoming these challenges. Over the past 25 years my city and its surrounding area have benefitted from almost €1billion of EU resources supporting growth, regeneration, employment and skills. The new 2014-2020 perspective will see a further €275million to be invested from 2014-2020. These funds will enable us to innovate, develop a research based approach to business growth, develop a low carbon economy and a new approach to employment and skills.

Give a concrete example of how EU funds have made to a specific project in creating jobs - what were the challenges and outcomes?

Multi-level governance and developing leadership locally remains a priority in implementing the new EU structural funds. An illustration of how this can reap success can be taken from the role my local authority played in the 2000-2006 programming period when it operated as an ‘ESF Co-Financing Organisation (CFO)’.

In England ESF has been a national programme delivered primarily through two national employment and skills agencies which provide both match funding and ESF. Birmingham became the first local authority to secure a CFO role and deliver an ESF programme for the area. It pooled together local resources, matched this against ESF and developed a programme that targeted the city’s most deprived, offering 100% funding to local organisations to deliver projects in their areas. This initiative saw 65% of resources go to local

voluntary and community organisations, supporting almost 29,000 local people, moving 6,000 into direct employment, as well as 3,380 into further education or training. These results were remarkable, given the initiative targeted people considered ‘most excluded’ and ‘difficult to reach’.

Within the new programming period 20142020 what do you think should be the priorities of EU regional funding in your region?

The European Structural and Investment Funds Strategy for the Greater Birmingham Area has identified six priorities; 1) Innovation and R&D 2) Stimulating Business and Enterprise 3) Developing Low Carbon Communities 4) Promoting Employment and Mobility (including Youth Employment) 5) Promoting Social Inclusion and Employability 6) Skills for Growth and Entrepreneurship.

What changes, if any, must the EU make to support local and regional authorities boost the economy locally?

In February 2014 the European Commission set out ambitions for a new Urban Agenda which must now move from rhetoric to reality and recognise the strengths and challenges of cities and regions, including their role in delivering smart, sustainable and inclusive growth. An urban agenda must empower our cities to better perform as drivers of growth, as frontline managers of social inclusion, and as key players in climate action, supporting Europe’s overall competitiveness and strengthening territorial cohesion.

An EU urban agenda needs to strengthen dialogue between the EU, member states and cities, engaging the different levels of government. In the new regulations, tools such as ITI’s have been introduced to facilitate local territorial leadership and management of EU funds. Whilst this is a positive development, it is disappointing some Member States, including the UK, chose not to allow its cities to use them. This example illustrates what can be achieved should cities be given tools to allow them to provide local leadership.

Sir Albert Bore is Leader of Birmingham City Council in the UK and member of the European Committee of the Regions.

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SPECIAL REPORT

Marek Wozniak:

“The development of economic growth and employment should primarily take place at local and regional level” What are the main challenges facing your region and what impact have EU funds in resolving these issues?

EU funding plays a key role in the region; it is therefore used in a very well-thought out manner, acting as a lever for economic development. Within cohesion policy there has been a move towards supporting the real economy, innovation and lasting growth. That is why the Wielkopolska regional development programme reflects its principal objectives, which include focusing resources on key sectors for economic growth and achieving results. If the region is to function effectively and to develop, it is vital to stimulate innovation by supporting action in the area of research and technological development, which should help unleash the potential of the academic world and strengthen its ties with the economy and boost SMEs’ capacity for growth on regional, national and international markets. Knowledge transfer and the use of information technology will make it possible to develop an information society. Areas of regional specialisation in the food, creative, energy and environment sectors will also be supported. Measures promoting integration and social inclusion are also important. The support of EU funding will make it possible to address the challenges facing the Wielkopolska region.

Give a concrete example of how EU funds have made to a specific project in creating jobs - what were the challenges and outcomes?

One of our flagship projects involved the roll out of an innovative technological production line for manufacturing module components for sewage pumping stations. A team of specialists from the company Hydro-Marko devised a new type of manufacturing technology; the project involved the purchase of a number of machines and appliances, the adaptation of a production hall and the integration of an integrated IT system. An increase in the company’s competitiveness and innovativeness and the creation of 30 new jobs were among the project’s principal achievements.

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Within the new programming period 2014-2020 what do you think should be the priorities of EU regional funding in your region?

Improving the region’s competitiveness and cohesion is the main objective of the 2014 + Wielkopolska Regional Operational Programme. In addition to the above-mentioned action in the area of research, innovation, entrepreneurship, ITC development and environmental protection, its priorities also include improving infrastructure and measures to increase employment, motivate people who are out of work or at risk of losing their jobs, improving education, including through lifelong learning. We are striving to curb the process of environmental degradation and to maintain the environmental equilibrium of the most valuable natural areas, particularly given that Wielkopolska lies in the drainage basin of the Baltic Sea, which means that appropriate water and sewage management as well as waste management processes are of key importance.

The use of an integrated approach will make it possible to adapt the programme’s interventions in line with the specific potential of the Wielkopolska region. The process of territorialisation is useful for addressing existing differences and for stimulating the internally diverse potential of given regions. Integrated Territorial Investments will be carried out as part of the programme in two cities and their surrounding areas. Areas of Strategic Intervention have also been identified, under which four financial envelopes will be made available for four subregional centres, together with a preference-based system for projects or beneficiaries of aid.

What changes, if any, must the EU make to support local and regional authorities boost the economy locally?

In answer to the question of what Europe can do for Europe’s regions and local authorities: it should above all provide them with as much room for manoeuvre as possible. Create conditions that allow them to make the best use of their own potential.

The development of economic growth and employment should primarily take place at local and regional level. In our opinion, the European Commission places too much emphasis on macro-scale solutions such as investments in transport corridors or the globalisation of the economy, ignoring the fact that the local and regional dimensions are just as important for competitiveness.

Marek Wozniak is Marshall of the Wielkopolska region in Poland and a member of the European Committee of the Regions.

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SPECIAL REPORT

Georgios Kaminis:

“We need to work to address a range of local development issues focused on social, economic and urban revitalisation” What are the main challenges facing your city/region and what impact have EU funds had in resolving these issues?

During recent years Athens was found at the vortex of the economic crisis. Economic activity shrunk, many businesses closed and jobs were lost, driving a number of citizens below the poverty line leaving the city faced with a period of continuous unrest.

We have to react. The goal has always been to make Athens an attractive modern Capital to live in, work or visit. The question was and still remains how to manage a city with a severely reduced budget, an administrative personnel cut almost by half and growing social challenges.

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In 2012 the Municipality became a pioneer at national level and managed to secure direct financing from EU structural funds for the implementation of an ambitious development programme, “The Athens Project”. Responsible for managing these funds, Athens does not have to tailor its investment to fit in with the programmes put forward by the region or the central government. The programme set goals to develop new productive and social structures, to support innovative economic activities, creativity, and to give the city a strongly extroverted and youthful character.

“The Athens Project”” includes a large number of projects and programmes which are divided into:

SPECIAL REPORT

1) Boosting competitiveness and entrepreneurship, with the goal of supporting the dynamic sectors of the local economy.

2) Improving and upgrading citizens’ quality of life.

3) Urban regeneration.

4) Managing the social crisis with the goal of combating unemployment, social inclusion and support for socially vulnerable groups.

“The Athens Project” finances 68 large projects with a budget of €120m euros from the 2007-2013 NSRF.

Give a concrete example of how EU funds have made to a specific project in creating jobs - what were the challenges and outcomes?

Boosting Competitiveness and Entrepreneurship of “The Athens Project” expects to create hundreds of new jobs and support over 800 new businesses and existing small and medium-sized businesses. Over €27m have been committed to strengthening sectors of the local economy that foster innovation and competitiveness, and tackle unemployment through job creation for young people.

It is divided into two basic categories: The first includes projects directly implemented by Municipal organisations and includes projects such as the Entrepreneurship Support Centre which play a key role in developing a strategy for the economic development of the capital through the creation of a new model of economic governance. The second category includes projects carried out in collaboration with organisations such as the Economic and Agricultural University of Athens, the Hellenic Federation of Enterprises (SEV) and the Hellenic Confederation of Professionals, Craftsmen & Merchants (GSEVEE).

It is the first time a Municipality has taken the initiative to coordinate all the entrepreneurship institutions in a joint programme to create synergies in an effort to stimulate entrepreneurship. The Municipality of Athens and the Athens Development and Destination Management Agency consulted with the local business community and stakeholders, carefully studying other examples of EU cities to track best practices of local government initiatives on entrepreneurship. This process showed that there is a significant need to develop access to finance especially for young entrepreneurs.

Unfortunately, it was not possible to use the EU funds towards the establishment of a microfinance mechanism due to eligibility constraints deriving mainly

from the national institutional framework. Another major challenge is the limited competencies of the Municipality of Athens to develop policies relevant to a number of urban development issues, ranging from public transport, electricity and water supply network to registering and monitoring the local business environment, which is a given for local governments in other EU member states.

Within the new programming period 2014-2020 what do you think should be the priorities of EU regional funding in your region?

The financial crisis have shown that locally we need to work to address a range of local development issues focused on social, economic and urban revitalisation.

The priorities of the new programming period should focus on policies to combat unemployment especially among young people; promote social innovation and social inclusion; and foster urban regeneration in the context of sustainable development. Access to finance and use of EU funds towards innovative financing schemes should also be considered.

What changes, if any, must the EU make to support local and regional authorities boost the economy locally?

Our cities are the drivers of the European economy, in climate action and social cohesion. The development of the EU Urban Agenda is of great importance since cities will be instrumental in achieving the objectives set in the EU’s 2020 strategy.

An EU urban agenda must deliver a number of tools to enable cities to play their part including: • a coherent framework for the urban dimension of EU policies, including the simplification of guidelines governing EU funding tools.

• improved ways of working together and for engaging cities in developing and delivering joint policies.

• enable local authorities to support initiatives aiming at greater access to finance through seed capital financing and microfinance guarantees.

An EU urban agenda is therefore an opportunity to support our cities in delivering smart, sustainable and inclusive growth for Europe.

Georgios Kaminis is the Mayor of Athens in Greece and a member of the European Committee of the Regions.

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SPECIAL REPORT

Bas Verkerk:

“It is important to reduce the administrative burden generated

by European rules and funds” 38

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What are the main challenges facing your city and what impact have EU funds in resolving these issues?

The social challenges that the European Commission set out in its Europe 2020 agenda also apply to my city of Delft. In the heavily urbanised Randstad region, issues such as the low-carbon economy, sustainable mobility, the sustainability of healthcare facilities, air and water quality and social inclusion are all high on the agenda. The Randstad, and particularly its “south wing” (the metropolitan areas of Rotterdam and The Hague as an entity), is the Netherlands’ primary economic force, with a number of valuable economic sectors. The numerous universities, knowledge institutions, businesses and local authorities all help in their own way to improve and solve problems. EU funds act as a “lubricant” and stimulus, accelerating the development of ideas and solutions and getting things moving where progress has stalled. They also ensure that the parties involved work together and focus on making the best possible use of scarce resources.

SPECIAL REPORT

Give a concrete example of how EU funds have made to a specific project in creating jobs - what were the challenges and outcomes?

Delft is a real university city. Delft University of Technology (DUT) is the largest and oldest such institution in the Netherlands, and has a global reputation for quality and ground-breaking research. Together with the DUT, the Netherlands Organisation for Applied Scientific Research (TNO) and other knowledge institutions, Delft has made it possible to develop an incubator for and with young entrepreneurs: YES!Delft.

This incubator was created in part with the assistance of the European Regional Development Fund. Businesses within the YES!Delft incubator primarily work in the low-carbon economy, sustainable energy and health care, developing a huge range of innovative technologies for these fields. The incubator has been a great success both nationally and internationally, and has inspired other cities and regions in Europe to reboot the economy and encourage enthusiastic students to become entrepreneurs.

Another good example of the use of EU funds is the Bioprocess Pilot Facility, a pilot plant for developing alternative environmental technologies for new nonfossil fuels. The DUT and the multinational company DSM operate the plant on the basis of open innovation. Without ERDF contributions from the region and neighbouring cities such as The Hague and Rotterdam, this pilot plant would never have been built.

These two examples have generated over a thousand jobs for the knowledge economy, with a further thousand being anticipated in the longer term.

Within the new programming period 20142020 what do you think should be the priorities of EU regional funding in your region?

The Randstad region comprises four provinces – South Holland, North Holland, Utrecht and Flevoland – and four cities – Amsterdam, Rotterdam, The Hague and Utrecht – working together. In consultation with other municipalities, universities, knowledge institutions, business, non-governmental organisations and ministers, they have produced a common Smart Specialisation Strategy, which has been further developed in the operational programme “Kansen voor West II” (Opportunities for the West II). This programme fits in with the “top sectors” established by the Ministry of Economic Affairs to gear the Dutch economy up for the

21st century. Not by chance, the Smart Specialisation Strategy, the Kansen voor West II programme, the top sector policy and the Europe 2020 agenda all dovetail together very well. The bulk of European funding goes towards boosting the knowledge economy, improving the sustainability of energy production and consumption (particularly in the existing housing stock), crossfertilisation between technologies, technology and social challenges, getting small and medium-sized enterprises more involved in innovation, and Living Labs.

For Delft and its immediate region in particular, the focus is on clean technologies (Clean Tech Cluster), medical technologies/healthy ageing (Medical Tech), security (Security Delta), horticulture, instrumentation and ICT.

What changes, if any, must the EU make to support local and regional authorities boost the economy locally?

The cooperation between the parties involved in the new Kansen voor West II operational programme provides a solid foundation for economic recovery. The Dutch government invests relatively little in research and development, though it is an important prerequisite for economic growth and competitiveness. The European Commission itself does take account of this, and European funding streams, financing instruments and the “smart cities” approach all contribute.

Another positive development is that greater attention is being paid to the role and importance of cities. There is an increasing awareness – supported by scientific evidence – that cities are steadily growing in importance. They are vitally important both to economic growth and to tackling future social challenges. Over 70% of Europe’s people live in towns and cities, most scientific research and innovation takes place there, and cities are large-scale users of European legislation and regulations. They are best placed to say which elements of this legislation are effective. Give cities the scope to do so; they need more and better integrated European policy. It is also important to reduce the administrative burden generated by European rules and funds, in order to avoid undermining support for Europe in society and local politics.

Bas Verkerk is the Mayor of Delft in the Netherlands and a member of the European Committee of the Regions.

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REGIONAL POLICY

Leadership needed for the Ionian Adriatic Strategy

by Nikos Lampropoulos*

On June 18th, the European Commission officially launched (June 18) the Strategy for the Adriatic and Ionian Region, “to promote economic and social prosperity and growth in the region by improving its attractiveness, competitiveness and connectivity. The Strategy should also play an important role in promoting the EU integration of Western Balkans”1

T

he Strategy covers eight countries: Four already member states of the EU (Italy, Greece, Croatia and Slovenia) and four non-EU countries (Serbia, Montenegro, Albania, Bosnia-Herzegovina.) But it will remain open for other countries to participate in at a later stage.

Four pillars are foreseen: Blue Growthcoordinated by Greece and Montenegro Connecting the Regioncoordinated by Italy and Serbia Environmental qualitycoordinated by Slovenia and Bosnia-Herzegovina Sustainable tourismcoordinated by Croatia and Albania

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European Commission claims all stakeholders of the Region will benefit from the Strategy at any political level. It also says that EUSAIR will –among others- ensure the sustainable use of sea and coasts and the coexistence of different economic activities, improve the sustainability of fisheries, increase safety and security at sea, protect biodiversity, facilitate nautical and cruise tourism and increase off-season arrivals by 50%.2 Is this dream real?

The EUSAIR Strategy sets a foursome of quite ambitious goals. But it is not clear who will take the lead to implement them. Two coordinators per pillar might sound a balanced proposal but it is more an effort to keep everyone happy and engaged.

REGIONAL POLICY

The leading force is still missing. Who will be setting the milestones, measuring the implementation and the results, branding the Communication? Which body is responsible to judge if a pillar needs to be strengthen or change?

Governance –an intergovernmental approach Taking into account what it is presented so far in the Communication to the other EU Institutions, Intergovernmental approach3 is supported: In only three paragraphs the paper vaguely refers to the role of the Commission as “independent facilitator” and calls for stronger political leadership not through new funds or bureaucracy, but based on the “line ministries and implementing bodies”.

In the supportive analytical document4 that accompanies the Communication, sets four options regarding the role of the Commission. But for the time being it seems that the scenario selected is not the one contemplating a permanent secretariat to administrate/facilitate the Strategy.

The Report for the governance of the macro-regional strategies5 is maybe more enlightening for the model the European Institutions seem to favorite, as in page 4 identifies the Adriatic-Ionian Council, at foreign minister level, as a key driver for the Strategy.

But within the same report one can already read the implications of this proposal: Ministerial meetings are neither systematic nor concrete and the gap between declarations and results remains huge.

What the Commission is not tackling at all is the low level of participation of all the other stakeholders in a governing system that is run by the Ministers and Coordinated by the Commission. Local and Regional level seem to be left out, together with the NGOs. There is a line in COM(2014) 357, that key stakeholders should be involved in implementation, but there is nothing related to the governance of the Strategy.

Once again he Regions and other local authorities are only involved in consultations and implementation, but not to the governance of strategies and funding related to their citizens and members.

Too many obligations, too little money As no extra budget is foreseen for the Strategy, each country will dedicate it from its own budget, for its own projects and its own beneficiaries. How productive can this be in long term? And how can one country have a say on another’s budget?

On the political site, the message is even vaguer: EUSAIR is supporting the regional cross-border cooperation (meaning cooperation at local and regional level, overcoming national borders) by it is actually enhancing the transnational/ministerial cooperation!

This quite unclear (yet) and not quite promising system has one more handicap to cover: the lack of any administration dedicated to the implementation of the Strategy. Besides the European Commission, maybe no other ministry or entity is willing to assign staff in a full time basis in EUSAIR policies.

The European Commission is trying somehow to fill this gap, pushing for INTERACT to play a more active role in coordinating with the Strategies of Danube and Alpine.

But INTERACT –keeping its track record in mind- will only manage to play a decisive role if a new Interact Point within the Ionian Adriatic area will be established.

Conclusion The new Strategy for Ionian Adriatic is a significant step forward for the broader Region of the South and the Balkans. It is a unique opportunity to finally engage stakeholders in the area in common projects with real, measurable, tangible results. And the European Commission managed to balance among member states and non-members in a way that everybody seems more or less satisfied.

But to manage implement the Strategy successfully –as the examples of the Danube and Baltic Sea managed so far- it is of outmost importance to decide on the leadership and make the system more inclusive in decision making, but at the same time more concrete in administration. The area has many “specialties” that should be taken into account. The Strategy for Adriatic Ionian Region should not remain “just another declaration”. * Editor of EurActiv.gr 1. INTERACT- EU Strategy for the Adriatic-Ionian Region http:// www.interact-eu.net/macro_regional_strategies/macro_regional_strategies/283/14370.

2. MEMO 14/429 Q&A on the EU Strategy for the Adriatic and Ionian Region (EUSAIR) 18-6-2014.

3. COM(2014) 357 p.10-11.

4. SWD(2014) 191.

5. COM(2014) 284.

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TRENDS

The International T Trademark Association takes it’s Annual Meeting to Asia

he International Trademark Association’s (INTA) Annual Meeting is the most widely attended intellectual property (IP) event of the year. Attendees travel from every corner of the globe to do business, expand their professional networks and participate in the educational programming. This past May 8,608 IP professionals from over 150 countries traveled to Hong Kong for INTA’s 136th Annual Meeting-it’s first in Asia. The fantastic turnout, which included a record 2,556 attendees from Europe, made this one of the largest Annual Meetings in recent years and the largest ever outside of North America.

Why Hong Kong? Why Now?

by Mei-lan Stark*

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All eyes are on Asia, its economies are booming and its markets are opening up. For attendees travelling from Europe and beyond, this Annual Meeting provided a truly unique opportunity to learn first-hand about the potential business opportunities in the booming Asian markets and to establish

TRENDS

a professional network in the region. Moreover, Hong Kong, the city often described as the place where “East meets West” is at the heart of Asia and is a transport hub for the region. This, underscored by its status as one of China’s “special administrative regions,” has transformed Hong Kong into one of the world’s leading international financial centers and a highly attractive location to conduct business. At the same time, Hong Kong has world-class convention and hotel facilities and could comfortably accommodate an additional 8,600 visitors.

Focus on Asia Given the rise of Asia in the global economy and opening up of new consumer markets including, for example, China; Indonesia and Myanmar, special attention was given to educational programming that focused on this dynamic region. A specialized track of eight sessions with a Focus on Asia was designed to help both Asian and international attendees (1) learn how to access Asia’s booming consumer markets, (2) acquire best practices for doing business in Asia, and (3) learn how to protect their brands in these markets. Several of these sessions were conducted in Mandarin and simultaneously translated into English, one of which featured a number of high-level Chinese government officials. Included on this panel was Judge Yin Shaoping, of the Intellectual Property Tribunal of China’s Supreme People’s Court. He noted that one of the

challenges for Chinese courts, as for many courts around the world, is a lack of understanding about IP. “We need to have more understanding in order to reach a consensus,” said Judge Shaoping. “One of the purposes of this session is to gain an in-depth understanding about IP and trademarks through exchanges such as this; such collaboration is something we must and need to continue.”

Recapturing the Power of Trademarks A key objective of INTA is to promote the positive role that IP, and trademarks in particular, play in society and in the global economy. During her Opening Ceremony welcome address INTA President Meilan Stark recounted her personal experience with trademarks growing up as a way to underscore the important role that trademarks play in the daily lives of consumers, “Trademarks have been integral in consumers’ lives for hundreds of years,” said Ms. Stark. “I firmly believe that trademarks are one of the most powerful, most efficient, and most effective forms of communication ever devised.” Ms. Stark went on to outline INTA’s recently implemented 2014-2017 Strategic Plan and called upon the global trademark community to join the Association in its mission to revive these sentiments in the public’s collective heart, “It’s time to recapture the public’s imagination about trademarks, and get them to invest in the value that trademarks bring to them personally and economically.”

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TRENDS

Engaging Governments and Associations A key measure of success for INTA at its Annual Meetings is government participation. With more than 40 IP offices, IP attachés, and public authorities traveling to Hong Kong, a record number of governments were represented at the 2014 Annual Meeting. The educational program also included a number of government-led sessions, where users had the unique opportunity to interact with the IP Offices. As it has done in previous years, the Office for Harmonization in the Internal Market (OHIM), which manages Community Trade Marks (CTMs) and Registered Community Designs (RCDs) within the European Union, held a Users’ Meeting to provide an update on the Office’s activities during the past year. OHIM representatives covered the Cooperation Fund, the Convergence Program and the EU Observatory. They also , discussed recent changes in practice and reviewed relevant decisions of the Court of Justice of the European Union. In a session entiled ‘Working with Customs in Europe’, officials from European Customs and the World Customs Organization (WCO) were joined by a number of practitioners to discuss transshipment and customs issues in Europe. They compared national approaches to EU Customs operating in a harmonized system, and shared practical advice for working with EU Customs.

The Annual Meeting was provides INTA leadership with an opportunity to meet government officials and leaders from other associations. The Association signed two separate agreements aimed at strengthening relationships with key organizations in Asia. On May 11, Ms. Stark signed a Cooperation Agreement with the Beijing-based Quality Brands Protection Committee (QBPC) that will serve to deepen collaboration between the two organizations. The following day, Ms. Stark met with the Hong Kong Intellectual Property Department’s (HKIPD’s) Director, Peter Kamfai Cheung, to sign a Memorandum of Understanding (MOU) with the office, which will also serve as a starting point for increased interaction and cooperation.

Where to next?

The 2014 Annual Meeting was INTA’s third outside North America, having previously held successful Annual Meetings in Amsterdam in 2003 and in Berlin in 2008. The next two meetings will take place in San Diego and Orlando before returning to Europe in 2017.

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* Mei-lan Stark is the 2014 INTA President and Chair of its Board of Directors. Ms. Stark is Senior Vice President, Intellectual Property for Fox Entertainment Group. In this role, she heads the IP legal group, which is responsible for all trademark, copyright, domain name and patent work for all of the Fox Entertainment Group entities worldwide. ** The International Trademark Association (INTA) is a global association of trademark owners and professionals dedicated to supporting trademarks and related intellectual property in order to protect consumers and to promote fair and effective commerce. Members include more than 6,500 trademark owners, professionals and academics from more than 190 countries, who benefit from the Association’s global trademark resources, policy development, education and training, and international network. Founded in 1878, INTA is headquartered in New York City, with offices in Brussels, Shanghai and Washington, D.C., and representatives in Geneva and Mumbai.

TRENDS

European e-commerce turnover booms by 16%

by Maarten Trautmann*

Europe 2013 Key B2C E-commerce Data of Goods and Services at a Gl ;

816 mi

100%

people live

69%

565 mi 32%

2.2% eGDP € 16.4 trn GDP 2013

2, , + jobs directly or indirectly via e-commerce 645,000+ estimated online businesses

3.7 billion+

number of parcels annually (f)

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264 mi people are

West € 177.7 bn +12.4% Central € 93.3 bn +22.7% South € 40.8 bn +18.9% North € 31.9 bn +12.7% East € 19.3 bn +47.3%

Europe € 363.1 bn 16.3% EU28 € 317.9 bn 14.7%

people use

2

1

3

Top 5 mature e-commerce countries in turnover (million) UK € 107,157 Germany € 63,400 France € 51,100 Austria € 10,970 Netherlands € 10,583 Top emerging countries Russia € 15,500 Spain € 14,414 Italy € 11,268 Poland € 5,225

5.7%

“

In cooperation wit Powered by:

TRENDS

The European online revenue of business-to-consumer goods and services grew by 16% to €363.1 billion in 2013, according to Ecommerce Europe, the association for web merchants in Europe. The Europe B2C Ecommerce Report 2014 published an in depth study on the revenues and growth in European e-commerce, and was released during the Global Ecommerce Summit 2014 in Barcelona on 17 June.

lance

illion

in Europe

illion

€ 363.1 bn

Turnover E-commerce Goods & Services

the Internet

illion

e-shoppers 46% Services

54% Goods

Estimated share of online goods in total retail of goods

“443 million social media users”

ith:

© Ecommerce Europe June 2014 www.ecommerce-europe.eu info: info@ecommerce-europe.eu for reports: research@ecommerce-europe.eu

Rue de Trèves 59-61|B-1000 Brussels |Belgium Tel: +32 (0) 2 502 31 34 Twitter: @Ecommerce_eu

Free download at: https://www.ecommerce-europe.eu/ facts-figures/free-downloads

T

he EU28 accounts for the major share of the revenues: € 276.5 billion, or 87.6%. This entailed a growth of 15% in comparison to 2012. The countries with the largest turnover remained unchanged from the year before: the list was topped by the United Kingdom (€107.1 billion), Germany (€63.4 billion) and France (€51.1 billion). This adds up to €221.6 billion, or 61% of the EU28. Europe’s e-commerce turnover ranks second in the world, after the AsiaPacific region (€406.1 billion, 16.7% increase compared to 2012) and ahead of North America (€333.5 billion, with a 6% growth compared to 2012). Although the Middle East and North Africa have a significant smaller turnover compared to other regions (€11.9 billion), the growth was by far the largest, with an impressive 32.6% increase compared to 2012.

Wijnand Jongen, Chairman of Ecommerce Europe’s Executive Committee commented: “We expect and online revenue of €425.5 billion in 2014. And towards the end of 2016, we believe that the European B2C e-commerce turnover will have increased to around €625 billion. The growth forecast is enabled through the higher spending per e-shopper in mature countries as well as through an increase in the number of e-consumers in emerging countries.”

Ecommerce Europe estimates that the share of the European B2C Internet economy, also known as the eGDP index, is at 2.2%. Based on Wijnand Jongen’s quote, stated above, this percentage is set to double in 2016 and even to triple in 2020.

E-commerce’s share in the Euro-

pean economy is growing, and is labeled to be a key driver for the European economy in the years to come. The number of websites has grown to 650.000 at the end of 2013, resulting in 2 million jobs in the same year. With the e-commerce industry growing, a major surge in the number of direct and indirect – think of parcel delivery, ICT jobs – is also expected.

No wonder that European policy makers are speaking out. During the pre-conferences of the Global Ecommerce Summit 2014, Digital Agenda Commissioner Neelie Kroes addressed the participants through video message as she called for tearing down the remaining obstacles in the Digital Single Market: “I would see the Digital Single Market as one of the top priorities for the next Commission; this is what I fought for as a Commissioner… It’s time for the EU to focus on what it does best. The Single Market is the EU’s grown jewel, and online is its natural new home. So let’s bring down those barriers. I hope we can work together to build that Digital Single Market.”

The pre-conferences of the Global Ecommerce Summit 2014 were dedicated to analysing the remaining barriers by giving a voice to European web shops.

The e-retailers indicated that differences in interpretation of national legislation, lack of transparency in the market, and lack of pan-European services solutions are hindrances in reaching the full potential of the European e-commerce industry. * Maarten Trautman is communication officer at Ecommerce Europe.

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LEADERSHIP

STRATEGIC THINKING: Creating an integrated perspective of the enterprise

by Elizabeth Rudd*

Many of you are familiar with the Einstein expression, “We cannot solve our problems with the same thinking we used when we created them.” Yet one of the things missing today is time and space to think strategically. Strategic thinking, defined by management guru Henry Mintzberg, is a process utilizing intuition and creativity to create “an integrated perspective of the enterprise.” He makes a distinction between the process of strategic planning, a logical, analytical process, and strategic thinking.

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hink for a moment about your strategic planning process. Do you look forward to it? Is it an opportunity to think creatively? Or is it an analytical process? Chances are it is the latter.

Most people are more comfortable with analysis focusing on facts and figures. It provides a feeling of control in complex situations and many of the

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challenges today’s organisations face are complex- taking into account multiple stakeholders, competing interests, and limited resources. In order to process all this information, it is helpful to break things down into smaller parts. This type of thinking is referred to as reductionist. Lean manufacturing, six sigma, and business process re-engineering are examples of reductionist thinking in management.

The focus is optimising existing processes often seeking cost reductions and quality improvement.

While worthy organisational goals they don’t create the future, they optimise the present.

From an early age our education system provides numerous opportunities to hone our reductionist and analytical thinking skills. Universities today offer ever more specialised degrees. A liberal arts education, once valued for creating well rounded graduates with the ability to think, has dropped in popularity across the world. The ability to think critically, write well, solve problems and other creative skills involving the mind and imagination are less valued in the rush to meet next quarter’s targets.

LEADERSHIP

Reductionist thinking, isolating aspects of the organisation from the context in which it operates, has a downside. And often this is an expensive, if not fatal, downside for an organisation. Many of today’s actions and decisions only ensure the same inefficient, inadequate systems perpetuate. Too few leaders today have strategic thinking abilities. Strategic thinking requires the abilities to think critically, understand complex systems, and to synthesise new possibilities.

Organisations have choices, if you can’t think critically it is difficult to evaluate which option might be the best alternative not only in the present but also into the future. Critical thinking is the ability to reason, to construct an argument (or point of view), and to question the information presented. It requires considering not only your own perspective (and reflecting why you have that perspective) but also to consider alternative perspectives.

Both the world and the organisation’s operating environment have become more interconnected in recent years through globalisation and the use of technology. This interconnectedness means the operating environment is more complex. To understand this complexity requires understanding how a system works- its components, their interactions and the ramifications of intervention. If you don’t understand the impact of your decisions on those around youother departments, competitors, or the market, it is difficult to make good decisions. Lacking this understanding increases the chances of being “surprised” by the consequences of decisions and often by the speed with which these consequences happen.

Systems thinking can assist to understand these interactions, the consequences of various courses of actions and identify leverage points. All of which are essential to create robust organisational strategy.

Synthesing new possibilities is another element of strategic thinking. Synthesis requires the ability to take known information and combine it into new and useful combinations. This is essential to envision the future and the future implications of decisions. This is much broader than forecasting, it is the exploration of what is possible in the future and what might have to happen in order to create these conditions. One tool for this is strategic scenarios. These are not analytical forecasts of the best, middle and worst possible outcomes of a decision, but rather a creative and intuitive imagining of what might be and the associated opportunities and risks. They are qualitative as well as quantitative.

Organisations utilise strategic scenarios to develop several views of what the future might be in 10-30 years, then utilise it in the strategic planning process.

Focusing on factors relevant to the organisation, scenarios are detailed enough to be useful- Who will your customers be? What will they be doing? What will be important to them? Where will they live? What will the economy be like? These and many other questions help shape views of what might be possible. From this you can determine what might be a preferred course of action for the organisation, as well as “stress test” your current strategy for resilience in these possible scenarios.

Yet many organisations in their rush to strategic planning skip this strategic thinking step. Unfortunately the cost of skipping it can be very high- with the organisation blindsided by competitors, market conditions or changing consumer habits they never imagined let alone anticipated, discussed and prepared for. For some organisations this proves fatal, and for many others it proves difficult to recover and they never return to their former glory.

In the future, leaders with strategic thinking skills will be in demand. Rather than be overwhelmed by complex challenges and issues those leaders able to work with a number of stakeholders to envision and work together on solutions will be successful.

Perhaps the easiest place to start to develop the skills is just to create the time and space within your organisation to think about the future. Practice some strategic thinking before you start your planning, you might be amazed how it changes your perspective of what is possible in the future and the focus of your strategic initiatives.

* Director of Melbourne-based FutureNous, a strategic foresight and strategy consultancy.

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15 Ways To Increase Your Productivity And Effectiveness As An Entrepreneur In today’s busy world, if you’re trying to figure out how to become the most productive and effective Person. Here are few crucial productivity and effectiveness tips you can implement today. How do you make sure every day is productive?

Becoming productive is the very first step in the process for developing your brand identity, company’s reputation, and becoming successful entrepreneur.

1. Priority on tasks - It is critical to determine and prioritize the most Urgent/Important and Urgent/ Not Important tasks.

2.

Delegate task - There is only a limited amount that you can do, however hard you work. If you are able to delegate chunks of tasks to other people. And if you do this well, you can quickly build a strong and successful team of people.

3. The seven for the day: Every morning, make a list of seven goals to accomplish. Tell yourself that if you can’t complete those seven tasks within workday, you’re using your time in the wrong way.

I try to include five professional goals and two personal ones from my “ideal day” list.

4. You should absolutely learn to take a break when you are not being productive anymore. Go for a walk outside the building, do something else. etc... then get back to work! Don’t think about pending tasks. Take deep breaths. Clears the brain, helps perspective. Observe nature (if available).

5.

Email is one of the biggest time wasters. Stay away unless it is absolutely critical to your previously set objectives. Remember that the more emails you send throughout the day, the more you receive. It’s a vicious cycle.

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6. When you have a new idea - write it down and put it into a queue.

7. No cluttering - You should try to keep our desks as well as our desktops clear.

8. Eat the good stuff – adequate nutrition can raise your productivity by 30%. You need the proper amount of glucose in your blood stream.

9. L isten to music.

10. Use the mobile phone as little as possible.

11. Send action-only emails: Don’t send out emails without a clear direction or call to action.

12.

Procrastination - Try to tackle the things you have been putting off early in the day: it gets a load off your mind and improves your outlook.

13. Try to be exceptionally careful in your task planning, and exceptionally aggressive in pursuing their completion.

14. To-do list – Make a habit of identifying the most important item on your to-do list and immediately starting your work day with that task.

15. More and more employees are using the alarms on their phones. When you do that, the first thing you do is check your email, respond to a text, or browse Facebook. Suddenly, the focus has been wrenched from your day – Buy an alarm clock.