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ISSUE 4-2016 / YEAR 20th - PRICE 10,00 € / $12,00

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Donald TRUMP A Challenging Era for US Politics Special Report

EU Affairs

Trends

TOO LATE TO SAVE THE EU?

JUNCKER PLAN AND FUNDING OPPORTUNITIES

SUCCESSFUL COMPANIES DON’T ADAPT

INDEX Founder

Konstantinos C. Trikoukis Chairman

Athanase Papandropoulos Publisher

Christos K. Trikoukis

08 EDITORIAL

12 OPINION

Brexit, Trump, what’s next?

Europe in the great new age of communication

16 EU AFFAIRS

18 EU AFFAIRS

Romanian-Moldovan reunification, between passion and realism

More effort needed to save Aral Sea from “environmental disaster”

26 SPECIAL REPORT

42 BUSINESS TRENDS

Editor in Chief

N. Peter Kramer Editorial Consultant

Anthi Louka Trikouki Issue Contributors

Diego Zuluaga, Judy Dempsey, Klaus Schwab, Radu Magdin, Martin Banks, Nikos Kostopoulos, Antonio W. Romero, Hans Izaak Kriek, Giles Merritt, Daniel Gueguen, Walter Russell Mead, Athanase Papandropoulos, Wout van Wijk, Aphrodite A. Bletas, Ying-Yuan Lee, Greg Satell, Alexandra Papaisidorou Correspondents

Brussels, London, New York, Paris, Berlin, Istanbul, Athens, Helsinki, Rome, Prague Public Relations

Margarita Mertiri Financial Consultant

Theodoros Vlassopoulos Published by:

EMG STRATEGIC CONSULTING LTD. 19 Leyden Street, E1 7LE London, United Kingdom www.emgcommunications.co.uk

Too late to save the EU?

ISSUE 4 / NOVEMBER-DECEMBER 2016, YEAR 20th Published bimonthly under the license of Christos K. Trikoukis. European Business Review trademark is a property of Christos K. Trikoukis. European Business Review is strictly copyrighted and all rights are reserved.

48 TRENDS

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Successful companies don’t adapt, they prepare

Artist Nelly Rapti expands her palette globally

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EDITORIAL EUROPEAN BUSINESS REVIEW

Brexit, Trump, what’s next? By N. Peter Kramer

Donald Trump’s election and Britain’s rejection of the EU surprised everyone and in similar ways. Hillary Clinton campaigned with the message ‘Stronger Together’ while the Remain campaign promoted a ‘Britain Stronger In Europe’. Bookmakers put long odds on both a vote for Brexit and a win for Donald Trump. Even on the day of the respective votes, polls, media and investors anticipated a win for the status quo. How was that possible? As with UK Leave voters, Trump supporters were consistently underestimated by polls as was the extent to which they would turn out. Opinion polls, forecasters and the mainstream media in the US have collectively failed to identify the frustration and anger among mainly white and less-well educated people, who feel threatened by globalisation, by growing ethnic minorities and ignored by the ‘elite’. Anti-immigration, anti-globalisation and anti-establishment were the three factors that caused Brexit. The same factors split the US during the race for the White House in Washington DC. Daniel Henninger wrote on the opinion page of the Wall Street Journal, ‘What we learned on Nov. 18, 2016, was that voters looked past or through all the atmospheric debris of the campaign and focused on what mattered – the direction of their country. Its economy, its politics and the state of the culture’. He gives ‘one stunning example. White evangelical Christians voted by 81% for the nation’s leading proponent of the Playboy philosophy’… Trump, initially derided as an outsider, actually led an anti-establishment movement. He made a hostile takeover of the Republican platform and then hatched a burglary of the Democratic electorate, especially in the Rust Belt with states like Ohio and Michigan. Democrats are for immigration. Result: low wages. Democrats are for free trade. Result: in the US industry employment dropped by 33% since 2000; nearly 6 million jobs gone. Senator Bernie Sanders understood this better than Hillary Clinton, an eminent representative of the establishment. But she became the party’s choice. Sanders bowed his head. Brexit, Trump, what is next? France? The French sentiment against immigration is immense. Globalisation is a public enemy. Paris, the center of power, is distrusted by the common French people. Marine Le Pen’s party, the National Front, is strong in the north, the south and the east, with Strasbourg as a stronghold. What will happen if Le Pen makes it to the second round of the Presidential elections. Le Pen vs. Sarkozy? Will the outnumbered left in the first-round vote for ‘Sarko’ or stay at home this time? Brexit, Trump, France? I heard somebody say that we live in times of revolution, the revolution of ordinary people.

OPINION EUROPEAN BUSINESS REVIEW

Europe in the great new age of communication by Diego Zuluaga*

Regulation can improve the competitive environment and give consumers a better deal, but the EU’s proposal to enforce “neutrality” on internet platforms does the opposite, argues Diego Zuluaga. Every period of economic transformation in modern history has been underpinned by dramatic improvements in communication. The second half of the 19th century, which saw a doubling of income per capita across Western Europe and North America, was marked by the spread of railways and the invention of the telegraph. When a telegraph cable was laid across the Atlantic Ocean, it shortened the time it took to communicate information between the Old and New Worlds from ten days to a matter of hours and, soon afterwards, minutes. The importance of communication is explained by two economic factors which are sometimes neglected by economists: imperfect information and transaction costs. In order to make decisions about work, investment and consumption, people require adequate information about the options available to them and the relative costs and benefits of each. If the costs of obtaining information or coming into contact with other people are high, fewer transactions will take place.

There is thus great value in innovations which reduce transaction costs, and when successful solutions are developed, the prospects for economic development improve dramatically. This is as true for the Internet in the 21st century as it was for trains in the 19th. PCs and smartphones have spread and broadband speeds have increased beyond most people’s expectations. As of 2015, 70% of mobile subscriptions in the EU were smartphone subscriptions and 80% of households had a broadband connection. Europe is today a connected continent. The possibilities opened up by the spread of the Internet are myriad and touch every aspect of our lives. People now conduct a large part of their social lives online. The web offers a range of cultural and entertainment choices – news, music, videos, films – which not even the Library of Alexandria could have equalled in its time. Individuals can purchase and rent goods and services online with a trust and transparency similar to that available in their local shop. Increasingly, the Internet-

EUROPEAN BUSINESS REVIEW OPINION

based sharing economy is also helping people make better use of their assets, increasing incomes and reducing waste. Discussions of the digital economy in the EU tend however to present it more as a threat to living standards than an opportunity for greater prosperity. It is believed that extensive regulation can offer the right answer to these new developments, with a particular focus on large platforms such as Google and Amazon. The argument is that, because of their large market share, these players are in a position to affect competition and prevent individuals and businesses from being active on the Internet. The European Commission, in the two cases it is currently pursuing against Google with regard to its search engine and its mobile software Android, has expressed these concerns. It is right for policymakers to study online platforms, as they are a relatively recent phenomenon which underpins much innovation on the Internet. In short, platforms bring together distinct types of users with different objectives in such a way that transactions on both sides are made easier. Offline, newspapers are a platform: they bring together advertisers and news readers. Online, Google – which connects advertisers and those browsing for content, among others – also operates as a platform. However, those advocating regulation have failed to answer some crucial questions. Firstly, is it true that platforms are preventing some users from effectively taking part in exchange? The massive growth of websites, blogs and specialist search engines catering to a variety of consumer needs suggests otherwise. Proponents

regulation

argue

that

Google

“manipulates” its ranking and is therefore not neutral when listing results on its search engine. But such “search neutrality” is an impossibility. Indeed, competition between Google and other search engines such as Yahoo! and Baidu comes precisely from the different ways in which they respond to customer queries. Secondly, how will regulation improve the competitive environment? Proposals to enforce “neutrality” on large platforms will lead to greater standardisation, not greater variety, online. Similarly, efforts by the European Commission to change the ways in which Android interacts with mobile-phone manufacturers and app developers may well lead Google to pursue a closed model where it makes the phones, controls the apps and develops the software all by itself. This is the model pursued by Apple, which is more profitable but has restricted Apple’s market share in mobile software. While innovation reduces transaction costs, regulation tends to increase them by mandating certain behaviours and restricting the scope for change. This does not mean that regulation is always and everywhere undesirable. It does mean, however, that regulation must undertaken only in those instances where it reasonably assured that intervention will improve the existing situation. That is simply not the case the Internet today.

be is on on

* Diego Zuluaga is a researcher at the Institutéconomique Molinari (France), the Institute of Economic Affairs (UK) and Epicenter (Brussels). ** First published at EurActiv.com

OPINION EUROPEAN BUSINESS REVIEW

The Last Thing Europe Needs Right Now Is an Army by Judy Dempsey*

Donald Trump is right about one thing.The European members of the NATO alliance have long taken it for granted that the United States would always be their security umbrella. Because of this, the Europeans, with few exceptions, have ignored repeated calls by successive U.S. administrations to share more of the burden for their collective security and defence. 12

EUROPEAN BUSINESS REVIEW OPINION

That said, the Republican presidential nominee’s idea that the United States should wash its hands of NATO horrifies the Pentagon, the State Department and America’s European allies. Without America, NATO would become toothless. The United States would lose valuable allies, and Europe would become highly vulnerable. The transatlantic alliance would be dealt a nail in the coffin. However, instead of focusing on strengthening NATO, several European leaders now say it’s time for the European Union to have its own army. But with Europe weakened and divided over a debt crisis, a refugee crisis and the rise of populist movements across the bloc, the last thing Europe needs is its own army. Jean-Claude Juncker, the president of the European Commission, supports the idea of a European force. Juncker’s hope is that such a stronger defense component for Europe would give the Commission – not the member states – more power over defense issues. Europe can no longer afford to piggy-back on the military might of others,” Juncker said in his recent annual State of the Union address. “We have to take responsibility for protecting our interests and the European way of life. … Without a permanent structure, we cannot act effectively.” But it is hard to imagine that member-states would cede sovereignty over such highly important issues to the commission. France, which has become much closer to NATO in recent years, supports a European army but has yet to spell out how it would work and how it could be commanded. It is also hard to see, for example, the Dutch or German parliaments ceding the right to veto or agree to military missions. Then there is the question of paying for a military force. How would ministers agree to finance a European army at a time when NATO members are supposed to be be increasing their defense spending to 2 percent of gross domestic product? Not all member-states want a European army, which increases the risk of dividing even further an already fractured bloc. The Nordic countries, such as Denmark, Sweden and Finland have not joined this debate, nor have Spain and Portugal. The latter would certainly not be prepared to duplicate spending on NATO and an E.U. army.

minister, said that only “E.U.-wide armed forces will allow us to defend our interests on our own.” He added that such a force would become a “more actionable and reliable partner” – as if NATO weren’t anything but that. Viktor Orban, Hungary’s prime minister, supported the idea. “We must prioritize security, and let’s start building a common European army,” he said recently in Warsaw during talks with leaders from the Czech Republic, Hungary, Poland, Slovakia, as well as Chancellor Angela Merkel of Germany. Central European countries want a European army to protect E.U. external borders. They do not see a potential European army as an instrument of hard power in trouble spots outside the bloc or intelligence-sharing or combating cybersecurity. Poland’s former Civic Platform government wanted the E.U. to strengthen its defense and security policy when it was in power between 2007 and 2015. The E.U. had to be ready for a weakened U.S. focus on Europe as a result of America’s shift to Asia. To be on the safe side, the E.U. would have to have its own independent military headquarters to plan and develop strategic planning. But those efforts didn’t get far. Britain opposed the idea of an independent military headquarters for the E.U. In its view, it was unnecessary. The E.U. already had access to NATO military planning facilities — creating a new headquarters would lead to duplication and competition. NATO is needed more than ever today, especially given Russia’s occupation of parts of eastern Ukraine and the massive instability along Europe’s southern neighborhood. A European army would instead be welcomed by Russian president Vladimir Putin because the United States wouldn’t have a say in the affairs of such a force. In short, calls for a European army are ill-thought-out and strategically shortsighted. This is not the time to weaken or distract from NATO. Instead it’s time to challenge Trump’s views – and debunk Putin’s hopes – that the NATO alliance has run its course.

Central European countries have indicated a desire for a European army for their own particular reasons. Traditionally, the Visegrad countries of the Czech Republic, Hungary, Poland and Slovakia have been staunch members of NATO. BohuslavSobotka, the Czech prime

OPINION EUROPEAN BUSINESS REVIEW

Four leadership principles for the Fourth Industrial Revolution by Klaus Schwab*

Every day we see the emergence of new technologies. And every day we see a widening gap between progress and societyâ&#x20AC;&#x2122;s ability to cope with its consequences. Whether it is an impending shift in the nature of work as technology changes production systems, or the ethical implications of reengineering what it means to be human, the changes we see around us threaten to overwhelm us if we cannot collaborate to understand and direct them. Unprecedented and simultaneous advances in artificial intelligence (AI), robotics, the internet of things, autonomous vehicles, 3D printing, nanotechnology, biotechnology, materials science, energy storage, quan14

tum computing and others are redefining industries, blurring traditional boundaries, and creating new opportunities. We have dubbed this the Fourth Industrial Revolution, and it is fundamentally changing the way we live, work and relate to one another. This revolution is arriving on the back of a slew of transformative technologies. But it is much more than the sum of these technologies. The first industrial revolution came in on the back of a wave of innovation â&#x20AC;&#x201C; the invention of the steam engine and the cotton mill,

EUROPEAN BUSINESS REVIEW OPINION

for instance – and represented a history-altering wave of systemic change such as urbanization, mass education and industrialization of agriculture. The second industrial revolution, with electrification and mass production, saw the advent of entirely new social models and ways of working, and the third industrial revolution – the digital revolution – provided the electronic and computing foundations for the radical shrinking of the world we have seen over the past five decades. The same will be true this time – individual technologies will be influential, but the real change will be in the social and economic systems that shape our lives and how we live them. The Fourth Industrial Revolution metaphor is most useful as a mental model to help business, government and society navigate the radical shifts that will occur as these technologies become embedded in our lives. We are encountering new business models as well as ethical, safety and social issues as emerging technologies come to life. But we have yet to collectively solve some of the most basic questions on critical issues such as the ownership of personal data, security of social infrastructure and systems, and the rights and responsibilities of the new leaders of our business landscape. For a prosperous future, we must ask how all of us, and the technological systems we design and build, can serve the proper ends and not be confined to the means. Our efforts must focus on the impact of the Fourth Industrial Revolution on human beings, society and the environment, and not just focus on technological progress or economic productivity. I see four principles which should guide our policy and practice as we progress further into this revolution. Firstly, we must focus on systems rather than technologies, because the important considerations will be on the wide-reaching changes to business, society and politics rather than technologies for their own sake.

transformative technologies. Otherwise, our future will be delivered by default. And lastly, we must focus on key values as a feature of new technologies, rather than as a bug. Technologies used in a way that increase disparity, poverty, discrimination and environmental damage work against the future we seek. For the investment in these technologies to be justifiable, they must bring us a better world, not one of increased insecurity and dislocation. The social and economic challenges posed by the Fourth Industrial Revolution are too much for any stakeholder to tackle alone. Business has an enormous amount at stake, as creating the conditions for safe and socially prosperous technology development and deployment is critical. Active government engagement is crucial, but without engagement and collaboration with those leading the revolution, governance will always be a step behind. And without an informed civil society understanding and engagement around the issues, we are likely to miss complex interactions on humanity, society and the environment. The Fourth Industrial Revolution and the systemic changes it will usher in emphasize more than ever the critical need for collaborative engagement around increasingly complex and fast-moving issues. We need new ways of working together to tackle issues that arise faster than ever, provide clarity of operating environment for business, and provide society with confidence that it is moving forward into a technological future where the opportunities and benefits outweigh risks and unknowns. Leadership in these complex times requires nothing less than a wholesale shift of our mental models, a step change in collaborative engagement, and the ability to collectively envisage the futures that we want to create, and manage ourselves away from the dystopias which technological progress can conjure.

Secondly, we must empower our societies to master technologies and act to counter a fatalistic and deterministic view of progress. Otherwise, there is no room for optimism and positive transformation, and society’s agency is nullified. Thirdly, we need to prioritize futures by design rather than default. Collaboration between all stakeholders must play a central role in how we integrate these

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Romanian-Moldovan Reunification, between passion and realism by Radu Magdin*

Romanian-Moldova Unification is an idea periodically brought to the fore by those passionate for this project

While still a minority, even a vibrant one, they manage, in the context of parliamentary elections this December in Romania and presidential ones in November in Moldova, to insert this topic on the radar of stakeholders in Bucharest and Chisinau, as recent emotional public meetings in Romania’s capital showed. The leaders of “Action 2012” made, in October, public appeals to the Romanian President, the Prime Minister, as well as the leaders of the main parties, to take into 16

consideration stronger leadership on Moldova, including the official statement of reunifications plans: they argue that “Basarabia is Romania”, current Moldova being part of larger Romania (1918-1940), before forcefully becoming part of USSR. The idea has more traction in Romania than Moldova, including in the polls: polling numbers vary in the two countries on the reunification topic, but typically the number is higher in Romania than in Moldova; iron-

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ically, in Romanian public perception, the Moldovans seem more likely to want to unite, and this mismatch should be addressed in the future, since strong mutual awareness is key to take any project forward on a realistic basis. Another perception mismatch has to do Moldova’s diversity and its large Russian speaking minority, as well as recognition of the fact that informational sources matter, since they shape public opinion: while Romania has become, in an accelerated way, more Europeanized and more Americanized during the past 26 years, Moldovans still watch mostly Russian TV stations. One man’s Bono is another woman’s Kirkorov, one Romanian may say something is “cool” as in bravo, while his Moldovan friend may call this “maladet”. The realistic path for the two countries to get together in the future is through concrete projects, concrete victories inspire trust and willingness to deepen relations: this has in fact happened during the past few years, with more to come, whether talking about cultural exchanges, aid or bilateral loans, or energy security. In time, with mutual knowledge and increased friendship and trust, Romanians and Moldovans will come to cherish both their common features and distinct traits and be able to manage their relationship maturely. This does not exclude passion, but one should be aware of the dangers of redirected passion. In the absence of strategic planning in between the two States, there is a risk that misunderstandings harm the relationship. For example, for a Moldovan tv viewer of Russian-speaking channels, any declaration from Romania about “Basarabia” and “reunification” will be spinned in a way that makes the average Moldovan prefer his current identity rather than favour a new one, particularly since Romania is depicted by Russian propaganda as a failed case of EU integration. At the same time, symmetrically, Romanians will not appreciate public declarations from Moldovan stars or average Joes saying they want a Romanian passport not because of personal or country affinity but because it is an EU passport and an opportunity to work and travel. Also disappointing is the idea that some unionist Moldovans have, that a failed Moldova, with a degrading economy, is riper for reunification: what everyone should focus on is Chisinau’s success, otherwise its population will become more frustrated as regards its immediate future. The Romanian diaspora is big, but the Moldovan one is even higher compared to its population, so Moldova’s focus should be to reform in

AFFAIRS

order to bring part of its people back and convert into a successful story. At the same time, Bucharest is right not to appreciate comments like the ones from Moldovan Presidential candidate Dodon about the “Romanian policeman”, basically renewing the main mantra of the Russian propaganda that “imperialist Romania is trying to grab poor, defenseless, Moldova”. Dodon should be careful on how he treats Romania(ns), his first round advantage does not instantly make him a winner on November 13th elections, Maia Sandu’s chances may prove better than expected, she has momentum and is trending upwards. Anyway, those fearing “Romanian imperialism” can relax: we, Romanians, have plenty on our table for the moment, like preparations for our EU Presidency in 2019, when Brexit will be sealed. 2018 is a year of historic significance since it marks a century since “Larger Romania” happened, but things cannot fundamentally change in between two countries in a bit more than a year. No matter how much unionists flag their case, and no matter how sympathetic one may be to their cause - I personally know and respect lots of them - , it’s untenable for Statesmen in the two countries to encourage or force referendums on the topic. The project has to be strategic and long term in order to be successful. Realities favour this approach: the truth is the level of development of the two countries is different, Romania is an EU and NATO member, whereas Moldova aspires for EU membership while being wary about any NATO connection (its Constitution has a “neutrality status”). Moldova has territorial issues as regards its provinceTransnistria, a frozen conflict since the 90s, currently being, slowly, under warmer negotiations. Romania started cleaning up its act for the past few years and turned from corruption as country brand, to anticorruption as distinctive feature in its region. Moldova is only starting now to clean up its act, under EU and IMF pressure. This does not mean that the two countries should not strategically decide to commit to a common future, and a common diplomatic mantra is “being together in the EU”; but it does mean like-minded Romanians and Moldovans should coordinate more on what is best for the two countries both in terms of merits and perception.

*Radu Magdin Analyst & Consultant

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More effort needed to save Aral Sea from “environmental disaster” by Martin Banks

The EU has a “key role” to play in ensuring that all efforts are made to save the Aral Sea from an “environmental disaster” That was the message from former German Greens MEP Frank Schwalba-Hoth who was speaking at an event in Brussels about the threat still facing the Sea which in the past 30 years has dwindled to just 10 of its former size. The briefing, at PressClub Brussels-Europe, heard that the degradation of the Aral Sea is one of the worst environmental crises that our world has faced, on a par with deforestation of the Amazon. The salt from the dried seabed is leaking problems not only within the region, but also throughout the world. The retreat of the sea began with ill-conceived Soviet irrigation schemes far upstream, which cut off the vital supplies of water that were needed to replenish the lake. Continued mismanagement, pollution and increased temperatures due to global warming have all taken a terrible toll on the size and health of the Aral Sea. 18

Schwalba-Hoth, a founding father of Green politics, told EBR that the EU and member states have an important role to play in efforts to revive the Sea. He said, “Despite being thousands of kilometres from the Aral Sea, the EU can play a key role because those countries directly connected to the Sea, including Kazakhstan, do not currently work well together on common activities. The EU, with its experience of cross border policy, can bring these countries together so they can be more successful in reviving the Aral Sea.” The event heard that in 1993, the International Fund for saving the Aral Sea (IFAS) was established. The main objectives of IFAS are to finance programs to save the sea, and to bring about the ecological rehabilitation of the region and the Aral Sea Basin as a whole taking into account the interests of all states. In recent years, huge efforts have been put into reversing this disaster. In 2003, with the cooperation with the World Bank,

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work on the First phase of the North Aral restoration project, which required an investment of $85 million, began. This includes the eight-mile Kokaral dam, completed in 2005, which allows water of the Syr Darya to accumulate thus helping to restore delta and riverine wetland ecosystems in the Northern Sea. Today, the Aral Sea is actually divided into two parts - Large (South) and Small (North). The Large is located on the territory of Uzbekistan and fed by the waters of one of the largest rivers in the Amu Darya region. The Smaller body of water lies on the territory of Kazakhstan, this latter part of the sea is the first to show tangible signs of revival. Water levels increased from a low 38m to a more desirable level of 42m. The water surface increased by 20% and today salinity is at 13 grams per litre, not far from 1960 levels. In 2015 the Aral sea approached the Aralsk harbor by 17 km compared to 95 km in 2001. Fish catches from the region increased from 52 tons in 2004 to 11 thousand tons in 2015. Life is slowly reviving. Local residents report better health and well-being after the micro-climate around the water body has improved. Now, many rural people and fishermen are resettling the north Aral region, and the ecosystem is slowly recovering.Zander fish, closely related to Perch, are being exported, and have indeed been on sale in Brussels.But at this time, only in the smaller part of is the recovery evident. More work is clearly needed.Fresh water flow from the Amu Darya into the larger southern Aral Sea continues to decline. Experts fears that the shallow eastern basin of the South Aral, which has shrunk drastically since it detached several years ago from the Amu Darya, may finally dry up completely in the coming years. Unlike in Kazakhstan, which has introduced drip irrigation and other water-saving technologies in agriculture, Uzbekistan or Turkmenistan have yet to make any significant steps in this direction. Experts say that modernisation of the entire irrigation system would help save about 12 cubic km of water annually. In addition, Uzbekistan and Turkmenistan are actually increasing the volume of farmland occupied by water-intensive cotton for export, the briefing heard. Cotton is Uzbekistan’s most valuable cash crop. Accounting for 3.3% of global production, the country is the world’s sixth largest producer and fifth largest exporter of cotton. Kyrgyzstan has frozen its participation in the activities of International Fund for Saving the Aral Sea, whilst Tajikistan and Turkmenistan have distanced themselves from the problems of the region.

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However, full recovery of the North Sea requires not only the flow of water, but also expansion of the Kokaral dam, it was said. It is necessary to increase the capacity in order to prevent water losses due to runoff in its southern part. Now must come the second phase of the project to restore the Northern Aral Sea. But for the implementation this plan the assistance of the global community is vital: Initially, from the World Bank, for the necessary investment in the superstructure of the dam. If the second phase is completed, the water will return to Aralsk, and the city will be a seaport once again. The lake systems will be restored and environmental and economic recovery of the northern part of the Aral Sea will be our gift to future generations. More comment came from former MEP Tom Wise who, during the 2004- 2009 legislature, sat on the European Parliament’s Fisheries Committee. He said, “During that time I became very much aware of the problems associated with the devastation of fish-stocks, whether the problem stems from simple over fishing, as is the case with EU waters, especially British waters, or, as in the case of the Aral Sea through an environmental disaster. “Fishing is not only a means of sustaining life, it is also one of the oldest forms of economic activity. When fish stocks collapse, unemployment, poverty, displacement of communities, and in the worst cases, hunger, ensue. “As with any environmental problem, it is always the most vulnerable member of society - those on the lowest rungs of the economic ladder - who suffer the most. The people who are least able to help themselves. Recovery of fish stocks does not happen overnight.” Wise added, “Recovery requires political will, economic support, and long term international strategy. “From my perspective, although I am not an expert on the region in question, the recovery of fish stocks in the northern Aral Sea that we have seen so far is little short of astonishing. To go from a state of virtual devastation to a situation where catch from the Aral Sea is actually being exported is an extraordinary achievement.” He said, “But this is just the beginning. To continue the recovery requires political will and long term commitment from all the countries in the region, as well as economic and technical support from the international community. Without that support the progress we have seen will stall. “I would urge the international institutions, especially the World Bank, to keep up the momentum. People’s livelihoods depend on it.”

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The Juncker Plan and funding opportunities for public works by Nikos Kostopoulos*

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The announcement of the Juncker Plan in 2014 and the consequent creation of funding tools have already-from the previous funding period- established a new framework for investments in the public sector in Europe.

We are gradually making the transition from a period of subsidies to a period where guarantees tend to prevail. Public money no longer constitutes direct funding but guarantee, either in the form of low-interest or interest-free loans or in the form of guarantees for high risk projects. This is a fundamental shift which is building its roots deeper and deeper both in the public and private sector. Thus, it is no surprise that strengthening the role of the financial tools is at the heart of the European Commission’s plans for the next funding period.For Greece and for the less privileged regions of Europe in general, this means that funds that until today were “reserved” for each country separately, will become “contestable” in the near future for Member States that are better prepared to attract them, having properly laid ahead the ground for investors.

for regional convergence, through the transfer of funds and resources, support of the least privileged regions and aid for the socially disadvantaged with actions aiming at social welfare. So, will this model, which made Europe the most attractive migration destination worldwide, be overturned? My guess is that it won’t. Both the European Investment Bank- which bears most of the implementation burden of this new policy- and the European Commission have realized that funding tools are not a panacea. They cannot efficiently tackle every challenge along the way. The issue now is for everyone to understand that a policy framework is necessary to guide investments and secure regional balance. The failed example of the Agenda 2020, which was never implemented, dragging to failure a series of ECB programs should not be repeated. Similarly, we should avoid mistakes of the past that made Cohesion Policy cumbersome and unpopular: bureaucracy, formalism and excessive costs gave the (wrong) impression that funds in European Regions are wasted to no avail. The first EFSI assessments, however, also indicate the same conclusions: labyrinth procedures, complex bank mechanisms and difficulties in participation from the administrative mechanisms of the Member States. This leaves one to wonder whether Europe has stopped being effective for good.

Tax stability, exemptions for large investments and elimination of bureaucracy are the major issues of concern for potential investors and key points on which all European governments and authorities are focusing. However, full implementation of this model which would replace the EU’s Cohesion Policy would threaten to destroy what was built with great efforts and even greater funds over the past decades: an effort

ENERGY EUROPEAN BUSINESS REVIEW

TECHNOLOGY-DRIVEN EFFICIENCY IN THE OIL&GAS SECTOR: CASE STUDY by Antonio Romero

oday’s oil and gas markets are presenting market players with a new set of challenges. Although a sustainable development strategy and expansion of the portfolio of projects remain key to long-term success, factors such as costs- optimization and improvement in overall business efficiencies, coupled with a strive to minimize adverse environmental impacts are gaining vital importance to companies, where technological innovation offers essential solutions and provides a competitive edge. In this context, few can carry on with business as usual and the most effective companies use this opportunity to overhaul their approach to doing business. Special attention is paid to those companies that are not only able to withstand current uncertainties, but to successfully grow. LUKOIL is one of these companies. LUKOIL isa privately owned and publicly traded company, with its shares and securities traded worldwide. With an over a 2% share in global oil production and about 1% of hydrocarbon reserves, LUKOIL is among thelargest vertically integrated oil and gas companies in the world. It employs around 106 200 people. With headquarters in Russia, the company operates in 35 countries on four continents, participating in projects across the globe - from Siberia to Mexico, from Norway to Iraq. LUKOIL is at the point of completion of its latest largescale investment cycle that has prepared and adapted it to the current low oil price period. In 2015 alone, for example, over $3 billion worth of fixed assets were put into operation in oil refining business, including the commissioning of the new technologically advanced hydrocracking complex in Burgas, Bulgaria. In the same year, LUKOIL reduced its overall emissions by nearly 18%, with the utilization of associated gas emissions at the upstream now at 92% and effective measures in place to cut emissions further. Similarly,

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waste water discharge was further cut by 5.9%, with both cuts in consumption and waste of water to progress in the years to come. LUKOIL’s ambitious plans and investments in the area of environmental protection and climate can be perceived as a competitive edge in international tenders for hydrocarbon development. When considered in conjunction with its efficiency in exploration and production, its high environmental standards are welcomed by the authorities. The latest recognition of LUKOIL’s standards was noted by the Norwegian Ministry of Petroleum and Energy when issuing the company with an offshore field development license. LUKOIL was among the first to introduce the so called “zero discharge” principle at all its projects. The principle obligates that all waste and other contaminants from an offshore platform are collected and transportedon shore for recycling. This includes both industrial and domestic waste. The company also receives recognition of its innovation and technological expertise from the professional community. One of the latest examples isLUKOIL becoming a winner in the “Technical Innovation” category at the annual SeaTrade Maritime Awards. SeaTrade experts noted the company’s contribution to the development of lubricants for marine navigation. In particular, LUKOIL has developed a new line of biodegradable synthetic oils, meeting the most stringent requirements and modern standards of safety, as well as intellectual iCOlube cylinder lubrication system. LUKOIL’s constant drive to improve every aspect of its value chain through cost-effective implementation of technological solutions is the cornerstone of its current resilience on the market. A pioneer among its peers throughout its history, the company fully reflects its slogan “Always moving forward”.

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President Trump sells America as a brand? by Hans Izaak Kriek*

Against all odds Donald Trump has been elected as President of the United States. Voter scorn for status quo propels upset of Clinton. The American people choose Donald. He talked presidential in his victory speech: ‘Now it’s time for America to bind the wounds of division,” he said. It is time for us to come together as one united people. It is so important to me.’ The Donald offered unusually warm words for Mrs. Clinton, who he before suggested should be in jail, saying she was owed ‘a major debt of gratitude for her service to our country.’ In my opinion the American political-media establishment does not understand the depth of anger in its own country. That is one of the most significant lessons of the 2016 presidential election, in which Donald Trump overcame the doubts of many reporters, 24

pollsters and political scientists who strong believed Hillary Clinton was headed for a decisive victory. Instead, white rural voters turned out in numbers that few so-called political experts expected, delivering that decisive victory to Trump. Trump’s win -- stretching across the battleground states of Florida, North Carolina, Ohio and Pennsylvania – seemed likely to set of financial jitters and immediate unease among international allies, many of which were startled when Trump in his campaign cast doubt on the necessity of America’s military commitments

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abroad and its allegiance to international partnerships. Donald Trump’s surprise victory sent shock waves through the global markets. Dow futures plunged overnight, but Russia’s market is up. President Putin said Trump’s victory was an opportunity to build ‘a constructive dialogue between Moscow and Washington’. Hillary Clinton How Hillary Clinton managed to lose an election to a candidate as divisive and unpopular as Donald Trump will baffle observers and agonise Democrats for years to come. Once the shockwave passes, some glimpses of rational explanation may become visible. It also did not help that what Clinton was selling was mainly herself. The campaign’s strongest message was that she was uniquely qualified to become president. This was largely true, especially when compared with the grotesquely inexperienced Donald Trump, but big ideas took a backstage role. Campaign slogans are notoriously vacuous. Obama’s “hope and change” turned out to be more of the former than the latter. Yet Clinton’s ‘stronger together’ only began to take shape in response to Trump’s divisiveness. It was attractive to many Democrats as a symbol of what they felt the campaign was about but it ensured the battle was fought on Trump’s terms. The political career of Hillary is ended now and she’ll never be the first female president of America. Europe Most in Europe were expecting to wake up with President-elect Hillary Clinton. But now that Trump has won, many political leaders in Germany and the EU are in no mood to celebrate -- with some exceptions. France’s President Hollande says Donald Trumps win ‘opens a period of uncertainty’, In Brussels, President of European Martin Schulz said: ‘I’m not happy about it. But on the other hand, I also believe that the political system in the US is strong enough to be able to deal with a president like Trump.’ The prime Minister of the UK: ‘Britain and the United States have an enduring and special relationship based on the values of freedom, democracy and enterprise. We are, and will remain, strong and close partners on trade, security and defence.’ A few months ago, I interviewed Donald Trump as the first European journalist and I asked him about his plans about the NATO. I think it is interesting to (re-)read his answers.

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‘You have doubts about the future of NATO, right?’ Trump directly: ‘The hallowed North Atlantic alliance is obsolete; we have to rebuild this institution. NATO is ill suited to combating international terrorism, which is the world’s single biggest threat’. He especially objected the US paying so much of the NATO bill, saying that the allies should “pay up or get out”; he refuses to see the US as the “world’s policeman”. In a town hall meeting in Wisconsin Trump said: “maybe NATO will dissolve and that’s OK for me, not at all the worst thing in the world.” In casting doubt on the future of NATO, Trump has challenged an establishment consensus that goes far beyond Washington DC. Both Trump’s Republican rivals have denounced his view. Hillary Clinton, the Democratic presidential nominee, accused him of “putting at risk the coalition of nations we need to defeat Islamic State”. I asked him: ‘Mister Trump, as President, what will happen with the Transatlantic Trade and Investment Partnership, TTIP, the free trade deal with the European Union. Trump: “The deal is bad because it doesn’t cover currency manipulation. It’s the number-one weapon used by foreign countries to hurt the United States and take away jobs. The deal is insane; it should not be supported and not be allowed to happen. We are giving away what ultimately is going to be a backdoor for China.’ The first months of the Trump presidency What are his plans during his first 100 days in office: “Appoint judges who will uphold our Constitution – this is so important; stand up to the many, many countries that are ripping us off on trade; change federal immigration rules to give our people the opportunity to fill good-paying jobs, and cancel regulations that send our jobs overseas; lift the job-killing Obama restrictions on energy production; repeal and replace Obamacare – it’s been an absolute DISASTER for families.’ We will wait and see. But as the Nobel Prize winner Bob Dylan sings: The times they are a changin’...

* Hans Izaak Kriek is political commentator for European Business Review and editor-in-chief of Kriek Media

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Special Report:

Too late to save the EU? This summer Brexit brought an enormous excitement in the discussion about the future of the EU. The unexpected election of Donald Trump as President of the US another one. The Pavlov reaction by many of the European leaders was twicethe same old song: we need more Europe, more budget, more buildings, more staff, more member states. There was hardly any attention for analyses and ideas of experienced people, pro-Europe but with a critical approach of the current EU. That seems too much for Europhiles pur-sang as the liberal Verhofstadt, the socialistPittella, etcetera. Their firm rigid and short-sighted attitude is: who doesn’t agree with me, is against me. ‘The EU’s achievements in 60 years of progressive integration far outweigh its present shortcomings’, writes Giles Merritt, Founder of Friends of Europe, a distinguished Brussels based think tank. Daniel Guéguen, another pro-

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European veteran, blames the so-called Big Bang, the expansion from 15 to 28 member states in the beginning of this century, for the current problems. This nearly doubling of the number of member states in a very short periodcaused, in his opinion, the â&#x20AC;&#x2DC;totally unmanageableâ&#x20AC;&#x2122; situation the EU is in. Maybe we have also to listen to two Americans authorities, sympathising with the European integration process but in criticalway: Nobel Prize winner Stiglitz and Walter Russel Mead. In their analyses of the disarray the EU is in, the euro is the cause. Both advise to deal with this cause of the problem, the euro, instead of having to struggle with the consequences of it. Or as the Germans call it: nichtkurieren am Symptom. The well-known Greek journalist (and chairman of this magazine), Athanase Papandropoulos, approaches the EU problems more philosophical. You can find the 5 articles in this special EBR report. We sincerely hope they offer you some perspective for the future of the EU.

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

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Making the most of Europe’s “saving graces” by Giles Merritt*

No one would deny that these are difficult times for the European Union. Sometimes deservedly, but often not, it is assailed by political disagreements among its members, policy differences over governance of the eurozone, and popular discontent (now intensified by the Brexit vote). But the EU’s achievements in sixty years of progressive integration far outweigh its present shortcomings. The Union can point to a wide range of activities where European solidarity and cooperation deliver benefits that no single member state could envisage alone. The snag – as ever – is that the EU fails to get the message across. Five areas stand out. Each needs to be trumpeted. Each

contributes substantially to a better quality of life in Europe while also helping to ensure that European countries maintain a competitive edge in the age of globalisation. These “saving graces” encompass trade, technology, cultural identity, security and environmental

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leadership. The key question is how they can be further strengthened and more effectively communicated. Although Europe’s share of accelerating global GDP is shrinking, the EU’s collective clout as the world’s top trading bloc remains an unparalleled asset. Asia’s emerging economic giants are understandably eager to revise the post-World War 2 Bretton Woods arrangements that still favour the West, and the EU has a crucially important role to play. Europe’s credibility in this process is reinforced by decades of global leadership in development assistance, with two billion people raised out of poverty over the past quarter-century. Europe’s researchers notch up half of all scientific breakthroughs around the world, and EU-wide funding and collaboration is an increasingly vital part of this achievement. Europeans are notoriously poor at turning their inventions into commercially successful innovations. The EU and its member states must raise their game in this area. Slowly but surely, the EU is directing more funding from its own and national budgets into high-technology sectors – those that will dominate the international economy and determine the winners and losers in the 21st century.

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Russian assertiveness and American intentions, is pushing security up the EU agenda. Post-Cold War “peace dividends” sapped most EU countries’ defence capabilities, but now the consensus seems to be that collective security demands a common commitment to Europe’s own defence, and to the economic and political stability of its neighbours. Last but not least, the environment. One of the EU’s best-known achievements has been its leadership on confronting climate change. That determination yielded the COP-21 global deal in Paris last year, which – although insufficient – is an important milestone. Environmental protection, like the other four areas of activity, is a long-term strategy that the EU has successfully pursued. Now, Europe needs to underline all of its saving graces with greater vigour and clarity.

The days are long gone when Europeans’ national cultures were part of their colonialist armoury. Today the flow is if anything reversed, with Europe absorbing strong cultural influences from Asia, Africa and the Arab world. But the EU’s growing focus on the cultural affinities of its member countries is becoming vitally important. The awareness and emulation of each other’s cultures marks an essential next step in Europe’s integration process, and in the information age the EU is wellequipped to promote this. EU-level policies should be the framework for a shared European culture – one that is capable of being strengthened by the arrival of migrants. Ideas for an EU “Security Union” and even the creation of a “European army” are controversial. The European project eschewed a military dimension for almost half a century after the signature of the Treaty of Rome.

*Giles Merritt is Founder and Chairman of Friends of Europe, and the author of Slippery Slope – Europe’s Troubled Future (Oxford University Press) which is shortlisted for the 2016 European Book Prize

Now, a sense of vulnerability on its eastern and southern flanks, coupled with uncertainties over

**first published in http://www.friendsofeurope.org

The European Union: 20 years in the wrong direction by Daniel Guéguen* 20 years ago I published “L’Europe à contresens”. This small book made a big impact in the press. Its key message was simple. Starting from the premise that the accession of Sweden, Finland and Austria in 1995 planted the seeds of the European Union’s dilution, I argued that the enlargement process should be put on hold in order to achieve the unified Common Market built by Delors. In short, remain at 15 Member States for as long as possible, encourage the new democracies of eastern Europe to organise themselves, make the single currency conditional on a prior harmonisation of tax, welfare systems and budgets, and prioritise the Community preference over a globalised free-trade approach. The opposite has happened, and today we are paying

the price. I never believed a “yes” to Brexit would happen, since it seemed to me unthinkable that voters across the Channel would decide not only to leave the European Union, where they enjoy a comfortable position (including budget-wise), but also to start a chain reaction leading to a pro-EU Scotland demanding its independence and even to Northern Ireland reunifying with the rest of Ireland. And let’s not forget the pressure that will come from people all over Europe to have a similar vote on their country’s EU membership. Reckless initiatives organised by discredited leaders For 20 years, the European Union has rushed into everything. First, there was the acceleration of

enlargement. Already finding it hard to deal with 15, the EU expanded to 28 Member States, becoming totally unmanageable. But to make things worse, this careless expansion was accompanied by the creation of a single currency poorly conceived and poorly managed, making it an inevitable failure in the long term. After all how can you sustain a single currency without tax, budgetary and welfare harmonisation; where growing gaps in competitiveness persist between the good students (Germany and the former ‘Mark Zone’) and the bad students (the southern countries and France)? These two priorities, inadvisable and selfdestructive, have themselves been accompanied – for 20 years – by an obsession with free-trade, from which our agriculture has not recovered; by a hijacking of science via the precautionary principle, making the EU an island where any technological or genetic advance in the agri-food sector is rejected; and by an endless slide from a political vision of the EU towards a bureaucracy without soul or direction. All this against the backdrop of leaders poorly selected, sometimes incompetent, always powerless. Once a great mobilising project, the European Union – even for federalists like myself – has become something people are rejecting in its current form. For glyphosate or endocrine disruptors, nothing is working, but swift reform is possible The Commission has proposed not one, but two texts, because there are two legislative acts. This is only the first problem: even worse, the first text takes the form of a delegated act (a post-Lisbon procedure), while the other – with more or less identical content – comes under the Regulatory Procedure with Scrutiny (a preLisbon procedure still in force!). How can anybody understand it, and how can such a bureaucratic mess function properly? The system urgently needs reform. It can be done without great difficulty, as long as the will is there. First of all, simplify by getting rid of the margins of interpretation civil servants have given themselves and by introducing total transparency. As for us, we intend to take the initiative of proposing an efficient and democratic comitology framework. We will have the chance to go into more detail on this later.

The post-Delors years have gotten worse and worse, with Commission Presidents poorly chosen or rather well chosen to do badly or do nothing at all. The list is long: Santer, Prodi, Barroso I and II, and now Juncker. The Juncker Commission, now in place for nearly two years, has got everything wrong. Whether on Grexit or Brexit, a proactive approach on these issues was required, to see them as an opportunity and not a threat. Making Greece leave the Euro while cancelling the country’s debt and assisting its recovery would have been the right EU solution for sustaining the single currency. Instead, the Greek crisis goes on, still unsolved. The same goes for Brexit. Rather than engage, convince and reform as he should have done, Mr. Juncker did not take any initiative, to avoid antagonising Mr. Cameron and British voters. Already slowed down, several dossiers were put on hold. The UK referendum should have been used as an excellent opportunity for debate about re-structuring the European Union around a twocircle system: the federally-minded Member States in the first circle, and a second circle for countries content with a trading relationship. Far from being a problem, the referendum campaign could have been a chance to re-define and re-organise the EU. Instead… On the morning of 24 June 2016, I didn’t feel bitter like the citizens of Europe in May 1940 when they saw the German panzers bypassing the Maginot Line! France was caught unprepared. This day also, the EU has been caught unprepared and hopefully the leaders who have failed will – like in 1940 – be thrown out by a wave of resentment. Let us remember that 24 June is only one week away from the spirit of resistance of 18 June (1940). Nothing is ever lost. This crisis is an asset. We pro-Europeans have a duty not to give up, not to be discouraged. But we also have a duty to revolt against this EU indecision we have been battling for 20 years. It is up to us to organise, communicate, persuade and join forces. Everyone has their role to play.

* Daniel Guéguen President of PACT EUROPEAN AFFAIRS, Professor at the College of Europe

Just like in 1940: defeat, but with a spirit of resistance!

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How a Common Currency Threatens the Future of Europe by N. Peter Kramer* The Euro started 17 years ago, and was supposed to enhance commercial ties, erode borders and foster a spirit of collective interest, furthering the evolution of former wartime combatants into fellow nations of a united Europe, the European Union. But since the common currency came into existence, it has instead

reinvigorated conflicts, yielding new crises, fresh grievances and a spirit of distrust. According to the Nobel laureate economist Joseph E. Stiglitz, in his new book â&#x20AC;&#x2DC;The Euro: How a Common Currency Threatens the Future of Europeâ&#x20AC;&#x2122;. Mr Stiglitz is University Professor at Columbia University, New York City and a former

Vice-President and Chief Economist of the World Bank. Stiglitz: the euro is a tragic mistake

In an interview with The New York Times, prof. Stiglitz described the euro as a tragic mistake, a currency begun without the necessary political integration or clear thinking about its fundamental flaws. The euro was compromised by an ill-conceived structure, and its troubles have been amplified by wrongheaded economic policies imposed by the most powerful European countries as conditions for bailing out those worst ensnared by crisis, he stated. By prof. Stiglitz’s reckoning the common currency has made having the countries of the Eurozone share common currency. They looked across the Atlantic and said: the US, big economy, very successful, single currency. We should imitate! But the problem was that they didn’t have a political integration. They didn’t have the conditions that would make a single currency work. For the euro to work was the idea was, the countries had to converge. The converge criteria were that countries had to keep their deficits and debts relative to their GDP down. That was viewed as the necessary and almost sufficient conditions for making the euro work. Several of the countries that went into crisis, Spain and Portugal for instance, actually had a surplus before the crisis and a very low debt-to-GDP ratio. But they still had a crisis. That tells us an important lesson: what the people who were behind the creation of the euro thought was going to be a critical condition was not!

the Euro was at fault, and the policies they enacted amplified the structural deficiencies. The result was that the countries diverged. The divisiveness in the EU is enormous; flinging of accusations between member states are also enormous. In Greece they are reliving the German horrors of WWII; the Germans say that Greeks are lazy; even though the number of hours that Greeks work per week is higher than the Germans do.

Stiglitz: you have to get rid of limits on government deficits Shocking was the response to Brexit of European Commission President Jean-Claude Juncker, who said: ’we are going to be very, very tough on the UK because we want to make sure that no other country leaves the EU’. You hope that people want to stay in the EU because it’s delivering benefits, because there’s a belief in European solidarity, the belief that it’s bringing prosperity. Juncker says, the only way we are going to keep the EU together is by threatening of what will happens if you think about leaving. On the question, what needs to happen to make the euro viable, prof. Stiglitz answers: a banking unions with deposit insurance; something like a euro bond. An ECB that doesn’t just focus on inflation – you want it to focus on employment; and… you have to get rid of limits on government deficits. *N. Peter Kramer is Editor-in-Chief of European Business Review and Honorary Secretary-General of the Association of European Journalists

In the NYT interview Prof. Stiglitz continues, saying that ‘the disappointing thing was that after the crisis, they didn’t learn a lesson. What they did was double down on the same recipe, austerity. The structure of

Europe Needs Its Realist Past by Walter Russell Mead*

As Europe’s troubles deepen and pose more of a threat to the vital interests of the U.S., Americans are recycling their tried and tested critiques of the European Union: It is too statist and bureaucratic. Its instincts are too protectionist. Its decision-making bodies are too slow and secretive. EU foreign policy is too naive, too feckless about defense and security. The problem with Europe, in a word, is that it is too European. But the EU isn’t in trouble today because its leaders are “too European.” The EU is in trouble because its leadership isn’t European enough. It is time for the continent to return to the tradition of realist politics that gave rise to its modern union in the first place. It is easy today to forget just how hard headed the original architects of Europe’s post war drive for integration actually were. Charles de Gaulle of France, Konrad Adenauer of West Germany and Alcide De Gasperi of Italy were conservative nationalists whose 34

vision for Europe reflected the bitter experiences of two world wars and a failed peace. In its origins, European unity was an unsentimental exercise in geopolitics. Germany and Italy saw it as a way to reintegrate into the world after the disaster of fascism. France saw a coalition with a defeated and partitioned Germany as a way to cement its power in Europe and to strengthen its global reach. All these governments saw European unity as a way to keep the Old World as independent as possible from

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both Moscow and Washington. “Europe will be your revenge,” Adenauer told de Gaulle after the humiliation of the Suez crisis in 1956, when the U.S. forced France and Britain to back down from a joint campaign with Israel against Egypt. These leaders did not think that submerging their national histories and identities in a cosmopolitan, post-national Europe was either possible or desirable. They supported Europe because it seemed to be the best way forward for the peoples they led. For its part, the U.S. backed the project because a united Western Europe offered the best hope to stop communism in the short term and to prevent the recurrence of major European wars farther down the road. It was a far seeing generation of European leaders, and their insights proved to be right. A stronger, more united Europe kept the Soviets at bay (and limited American power) while serving the national interests of the nations who founded it. But none of these leaders thought that they were building—or wanted to build—a cosmopolitan super state, the aspiration of many Europeans today. And each of them was deeply concerned about building up his own military forces (including, in de Gaulle’s case, nuclear weapons). The Soviet threat kept European minds concentrated on the hard facts of power. Even after the passing of post war Europe’s founding generation, hard power and hard thinking still played a role in the continent’s politics. West German Chancellor Willy Brandt’s embrace of Ostpolitik—that is, an “eastern policy”—in the 1970s was a classic example of subtle and visionary statesmanship. It entailed, among things, the opening of the Warsaw Pact and the U.S.S.R. to trade and exchanges with West Germany, thus helping to weaken Soviet power, undermine the East German Communist Party and shift Eastern European economies and societies toward the West. During the 1980s, two German chancellors— Helmut Schmidt and Helmut Kohl—resisted immense public pressure in order to back President Ronald Reagan on the deployment of short-range nuclear missiles to counter the Soviet build up. Europe’s distinctive history—of powerful, competitive states developing a common civilization—gave the continent a complex and subtle tradition of statecraft. That tradition provided de Gaulle, Adenauer and their peers with the political ideas and diplomatic skills to achieve their goals. European statesmen of this era scoffed at American optimists like Eleanor Roosevelt, with her post war

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confidence in the swift approach of a terrestrial utopia regulated by international law. They chided such naifs for their superficial approach to world politics—for neglecting the realities of hard power, on the one hand, and for dismissing the fateful and decisive influence of national culture, on the other. Since the end of the Cold War, these traditions of statesmanship have faded, and the continent that gave Machiavelli to the world has embraced instead the spirit of Woodrow Wilson. When Wilson proposed his Fourteen Points after World War I, the French Premier Georges Clémenceau mocked them, noting that “God himself had only 10.” Today, however, Wilson’s vision of a liberal world order regulated by global institutions has become the basis of European policy. It isn’t working, and the EU is in the midst of its most serious crisis in a half-century. Beset by enemies abroad and rivalries within, buffeted by economic and cultural forces that its feeble institutions cannot master, riven by clashes of interest and values that pit north against south, east against west, the EU is being tested as never before. To overcome these problems, Europe needs to return to its roots and recover the realistic statecraft for which it was once celebrated and esteemed. The recovery must begin with geopolitics. With the demise of the Soviet Union, Europe’s leaders no longer saw themselves as building fragile structures of order in a dangerous world of rival powers. To their minds, the age of universal peace had come. For reasons of democratic idealism and European solidarity, they promoted the expansion of the EU into former areas of the Warsaw Pact and the U.S.S.R. But in the excitement of building a larger EU, few of them considered how these policies would affect the continent’s relationship to Russia. De Gaulle or Adenauer would have known better. Since the time of Peter the Great, Russia has insisted on its right to influence key European decisions that affect its own economic and security interests. Any European leader of the last three centuries would have understood, without being told, that to attempt to exclude Russia from the most important economic and political questions in Europe was to invite war. For the clueless technocrats who made European policy in the 1990s, however, Russia was inconsequential— economically moribund, still stunned by the Soviet collapse and ruled by the increasingly pitiable (and often drunk) Boris Yeltsin. Russia, they assumed, could do little more than protest against EU and NATO expansion in the 1990s. But stunned isn’t dead, and the 35

inevitable Russian recovery began. Russia is not (yet) the kind of power that the Soviet Union was, but today’s EU lacks the political, economic and military wherewithal (to say nothing of the determination and will) to impose its European vision on Russia. This isn’t just about Vladimir Putin. No Russian leader could quietly accept the existing European architecture, which is a standing challenge to a range of Russia’s historic interests. During the Cold War, European leaders prided themselves on possessing a more sophisticated and nuanced reading of Soviet intentions than the Americans, but over the past decade, they have been as slow as President Barack Obama and Secretary of State John Kerry to grasp Russia’s intentions. On both sides of the Atlantic, leaders have been unable to understand that Mr. Putin sees the world through geopolitical, rather than liberal internationalist, spectacles. Mr. Putin has consistently out-maneuvered and outfoxed both the EU and the U.S. Even with its much weaker hand, Russia has forced NATO and the EU to conform to its movements and play the game on its terms. A more credible European response to Russia would proceed on two fronts. In the first place, Europe must offer stiff resistance (from sanctions to security assistance) to Russian attempts to expand its influence and also reduce its own dependence on Russian energy. At the same time, however, Europe should open talks with Russia, inviting deeper participation in European institutions if (and only if) Russia moves closer to European values. 36

Another critical piece of the European legacy that the EU has discarded is the idea of the nation-state, one of the continent’s greatest and most powerful political inventions. The nation-state emerged as a way to bind millions of people together into a moral and political community, based on bonds of culture; it was meant to create solidarities and loyalties that could transcend regional and class divides. The post-nationalist leaders of post-Cold War Europe thought that they would strengthen the continent by marginalizing nationalism and embracing the goal of a pan-European superstate. They were wrong, and the result of their error is visible today in the resurgence of nationalist tensions in reaction to the EU’s overreaching. The original architects of European integration did not think that the nation-state was outmoded. For de Gaulle, Adenauer and De Gasperi, the nationstate (whatever its faults and limits) remained the indispensable foundation for European and world order. No other political entity possessed the necessary democratic legitimacy or effectiveness in action. As de Gaulle would have predicted, a pan-European government conducted at a great remove from the peoples of Europe lacks the political support to be strong. Worse, it has lost sight of the importance of culture to policy-making, a failure that is visible, above all, in the single most disastrous European initiative since World War II: the euro. Centuries of European history counseled against this experiment, but the proponents of the euro were

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technocrats who could only see the abstract logic of a single currency. They scoffed at the idea that money might play different roles across the continent’s varied cultures—roles that, as we have seen, could not be easily eradicated. Germans tend to think of money as an objective measure of worth; they recoil at the notion that government would interfere with the value of money to achieve political or economic goals. For the Italians and the French, by contrast, monetary adjustment is the obvious way to handle economic problems and to redress social inequities. The euro ignored these (and many other) profound national differences. As a result, it has inflicted monumental economic pain on much of the continent. Administered by an unelected, transnational committee, it also has undermined public confidence in all of the EU’s institutions. On migration, Europe has fumbled as badly as it has in managing its money. This is a colossal failure, brought about by a synthesis of cultural blindness and geopolitical fantasy. Just as Europe’s leaders have discounted the geopolitical dimension of their relationship with Russia, so too they have ignored the gathering storms to their south and east. The combination of demographic explosion, authoritarianism and state failure in much of the Middle East, North Africa and sub-Saharan Africa ensures that wave after wave of desperate people will knock on Europe’s door for the foreseeable future. Syria is the tragedy of the moment, but developments in Turkey, Egypt, Pakistan and elsewhere could just as easily send new masses of refugees and migrants across the Mediterranean. With anti-immigrant feeling growing across the continent, even as the wave of migrants threatens to grow, the EU is unable either to manage the flow or address its causes. Europeans are deeply and bitterly divided today about how to handle this unprecedented flow of refugees and migrants, but the problem isn’t going away. Europe must regain control of its frontiers; its citizens must believe that their union can prevent an unending flow of migrants across the sea and over land. This means more naval power in the Mediterranean and expanded surveillance of Europe’s frontiers. It also means building up European hard-power capacities (including intelligence and military options) to better manage events in North Africa and the Middle East that affect vital European interests. Taken together, these many challenges are formidable indeed, but the postwar architects of the continent’s

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union faced worse. The European tradition of statecraft and diplomacy developed in a world of ideological strife and bloody warfare. An intelligent return to that tradition offers Europeans a way forward. But it won’t be easy. Much of the European project as developed since the revolutions of 1989 needs to be rethought, and some of it needs to be dismantled. In the first place, Europe must recover its traditional appreciation of hard power. No major European country spends anything like enough on defense. The bureaucratic-legalistic mind-set that now reigns in Brussels will have to be modified. In matters of diplomacy and security policy, today’s permanent European councils and parliaments will have to yield to more flexible arrangements based on the prerogatives of national governments. To recover its élan and continental identity, Europe needs to stop pretending that history is over—that the stark old realities of international politics have given way to irresistible liberal progress. Europe must instead embrace the national states and cultures at its historic heart and exploit their creative power; it must rebuild its military capacities; and it must proceed with a clear-eyed focus on European interests in a dangerous world. Such an EU—decentralized and outward-looking— might persuade British voters to reconsider Brexit. At a minimum, it would command Britain’s respect and draw it into deeper cooperation on military and political responses to the continuing crises to Europe’s east and south. None of this will tear Europe apart or make it less European. Europe will become stronger even as it becomes truer to its own roots. De Gaulle called it a “Europe of fatherlands” (Europe des patries), and it will be more capable, respected and durable than the papier-mache facade of power that the bureaucrats and jurists have labored so industriously, but so vainly, to build in Brussels.

*Walter Russell Mead is a distinguished fellow at the Hudson Institute in Washington, D.C., a professor of foreign affairs at Bard College and editor at large of the American Interest. **The article was first published at “The Wall Street Journal”.

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THE EU AND ITS ANCIENT ENEMIES by Athanase Papandropoulos*

Seventy years after the famous speech of Winston Churchill in Zurich the specter of nationalism is once again present in Europe. On September 18, remind us the Foreign Affairs Magazine, the Alternative for Germany, the Islam and anti-immigrant party won 14.2 % of the vote for the Berlinâ&#x20AC;&#x2122;s regional parliament. It was the first time the AFD had stood in the German capital. The party run a campaign focused entirely on its opposition to German chancellor Angela Merkelâ&#x20AC;&#x2122;s decision in 2015 to allow in hundreds of thousands of refugees. 38

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It clearly paid off. Merkel’s decision showed the strengths and weaknesses of Germany’s ability to cope with such an influx. It also exposed big divisions at home and especially inside the European Union over how to deal with refugees, security, and the everincreasing rise of populist parties that want strict controls over immigration.

Some months ago, in June especially, the Austrian presidential election showed a rising trend in European politics: voters rejected mainstream parties in favor of outsider candidates, resulting in the first Green head of state in Europe and nearly equal vote share for the second place far-right candidate. In several European countries including Finland, Hungary, Latvia, Lithuania, Norway and Switzerland, right-wing parties have taken the race of government. And everywhere right-wing populists haven’t gained power. Groups such as British UKIP, they played important role at the Brexit and they obtained gain de cause In crisis-ridden Southern Europe, meanwhile, leftwing populists have seen a renaissance. A Spain’s anti-austerity movement Podemos obtained a very good result in Spain’s last elections and in Greece Prime Minister Alexis Tsipras, left-wing SYRIZA party, is leading an unlikely coalition government with the right-wing Independent Greeks{ANEL] party. Two core issues lie at the root of today’s rising populism: The challenge of immigration and the lingering euro-crisis. Identifying the problem, however, is not the same as overcoming it. And here, Europe faces a dilemma. The continent’s problems can only be addressed through increased cooperation, but European electorates refuse to authorise any further transfer of sovereignty to Brussels. The populist surge is partly a rational

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response to the apparent political failures of the established parties. It is also an emotional backlash to a sense of disenfranchisement. Increasingly the European Union’s compromise machine is perceived as an institutionalised big coalition between the center-left and the center-right that routinely ignores opposing voices. In contrast to the U.S., where political differences between Republicans and Democrats have remained deep, European mainstream parties have in the last decade moved even closer toward the ideological center. In the case of many left-wing parties, like the marginal SYRIZA in Greece, the shift was explicit. Parties deprioritised this ideology and embraced what was presumed to be a post-partisan pragmatism. Tony Blair’s new labor and Schröder’s new center in Germany are cases in point. Both parties were rewarded with historic victories in the 1990’s. Thereafter, years of centrist economic policies generated growth, but also alienated large tanks of the center lefts traditional supporters. Disillusioned leftist voters became easy targets for populists. Although this process was gradual, the effects can be seen in the disappearance of time-honored center-left parties such as the Greek PASOK and the Polish Social Democrats. A similar pattern holds true for Europe’s centerright parties, which are paying the price for the shift toward more progressive positions, first and foremost on social-cultural matters. Nowhere has this process been more striking than in Germany. Chancellor Angela Merkel has shifted her conservative ChristianDemocratic Union to the left in a wide range of issues. According to these situations the EU is caught in the cross-fire between nationalist and internationalists, populists and liberals, and the extreme right and left. The Eurozone immigration crisis have dramatically accelerated pre-existing trends of polarization and segmentation. So, some long-established parties are disappearing and on the other side anti-establishment movements are gaining support in many countries also outside Europe, as democracies move away from representative politics toward new forms of political engagement. Under these circumstances, political change poses three particular challenges to the EU. One is the struggle for power between the old and the new. The constellation of power on Brussels is still that of the old establishment, drawing the anger of new forces. Indeed, there is a time lag between national and EU-level political change. New parties gain power at the EU level only once they enter national government while more establish the power basis first at the regional or local level or online. As a result, that may

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be very influential in setting a new political agenda in national politics but it is the old parties that still represent their countries in Brussels. This lag has a positive side. It ensures greater stability during times of turmoil at the national level and it protects EU policies and law from extremism. But it makes Brussels look like a defender of the old establishment. The second challenge is to the functioning of the EU. Rapid change makes the EU harder to govern because its political system depends on transnational cooperation and a minimum level of political stability. The EU works through negotiations that lead to different views and trust among the participants. Disruption of national politics can cause paralysis. Populists often have few detailed policy goals, as there is an identity orientation, so they are not motivated to use the EU system. In that sense, populists are unlike other fringe movements that have promoted new causes through the EU, such as animal rights, data protection and digital freedoms. So, if populism is shadow casted by democracy, to catch British political theorist Margaret Canovan, it is the dark side of the EU. Xenophobic populists oppose both the EU’s goals and its working methods. The claim that interdependence is dangerous and the national sovereignty should be absolute, supporting majority 40

rule and rejecting pluralism. So, we face a new landscape and at this level the task of politicians, of progressive politicians, of all sides are further challenged as we are entering a new era in democracy’s function. A function shaped by new stakes, different dividing lines and new narratives against background of globalisation, multiculturalism, security fears and emerging 21st technological advances. Democratic forces will be judged by the ability to set a new agenda and by the power to protect democracy’s core principles and values against the rise of populism. An absolutely vital task as populism has always been more than a threat, it has been an executioner of democracy, societal development, and of peace. Within this context, an EU that helps to restore democracy and prosperity to its members may also be able to rekindle its citizens’ enthusiasm for itself. The vital choice is between reform and revival or decline and decay.

*Athanase Papadropoulos is Honorary President of the Association of European Journalists (AEJ) and Chairman of the European Business Review

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CEO of Navigator, Mrs. Danae Bezantakou

Shipping decision makers meet in Greece by Alexandra Ktisti* The international forum organized by Navigator Shipping Consultants Ltd. was held for a 16th consecutive year and proved that it stills being one of the most popular events in the field of shipping.

& Market Analysis” was moderated by Mr. George Xiradakis, Managing Director – XRTC Business Consultants Ltd and President – The Propeller Club (Port of Piraeus).

The event took place on Friday, November 4th 2016 at the DivaniAppollon Palace, in Athens. The NAVIGATOR 2016 - “The Shipping Decision Makers Forum” was honored by the presence of more than 500 executives of shipping, ambassadors from 25 countries, and members of the banking sector, representatives of major maritime organizations, academics, students and press representatives.

A very special part of the event has been the open discussion organized for a 4th consecutive year under the initiative of Navigator among foreign ambassadors who serve in Greece and was moderated by Mr. Francois Lafond, President Blue Networks and Opportunities & Associate Professor Sciences Po Paris.

The CEO of Navigator, Mrs. Danae Bezantakou, welcomed the participants with an optimistic prompt to stop advertise the crisis and try to take advantage of the opportunities that arise through that situation. The President of the company, Capt. Dimitris Bezantakos, in his opening speech encouraged the actors of the Greek shipping to leave pessimism aside and fight to keep the Greek shipping strong and a world leading power. The first panel entitled “Ports as an Economic Aspect

Another panel on“Smart & Green maritime Technology: Where we are now, and what’s next?” was moderated by Mrs. Helena Athoussaki, Head of Maritime Sustainability Centre - PwC. The dialogue was on the topic of the last developments concerning the environmental regulations and their implementation. Moreover, panelists emphasized on the importance of the technological integration in shipping companies and analyzed ways in which the implementation of the “green model” in shipping can improve the safety performance of the crew and the logistics chain.

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Copyright: Guaranteeing the sustainability of news media in Europe by Wout van Wijk* The press publishing industry is often seen as an old-fashioned, analogue industry. Reality is quite different - while the industry is very competitive, with many different titles on different platforms published in different geographies and targeting different audiences, both offline and online, publishers need to continuously innovate and cater for the news consumption preferences of their reader-base. And these preferences are constantly shifting. Research suggests that over half of Europeans under 18 see social media platforms such as Facebook as their primary 42

source for news content. This new reality requires adaptation of the news publishing sector. Thereâ&#x20AC;&#x2122;s a need to innovate in terms of news products as well as in ways to monetise on these products. Because, and this is important, content may be free to access, it is not free to create. Adapting to these changing realities requires investments. However, as advertising revenues for press publishers are in decline, and have been for many years now, this is not evident.

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Currently, in a society that relies heavily on digital, including for the consumption of news, the need for a clearer legal copyright framework, recognising investments in content, is needed to guarantee the sustainability of the news media sector.

ing sector, but for virtually all sectors. The introduction of publishers rights, and thereby the recognition of publishers as rightsholders, provides legal certainty against which the sector can invest in, and build on a sustainable future.

Therefore, on 14 September the European Commission published its proposal for a review of Europe’s copyright legislation. It was warmly welcomed by the publishing sector in Europe, as it includes a so-called “publishers right”. Whereas in the music and the film industry a similar right has been in existence for years, press publishers were, till now, not recognised as rightsholders over the content they invested in. The move by the European Commission therefore seems a logical extension to another of Europe’s creative sectors, but it is met with great resistance from the tech industry.

This legal certainty doesn’t only help the news media industry, it also helps internet platforms, startups and anyone else who wants to build a business based on news media content in understanding where they stand. This is important if we want to build a bigger, better and more sustainable European news media ecosystem. A bigger pie altogether, not just a bigger piece for some.

In a digital world, a value chain can be very long and complex. Looking at some of the well known examples from other creative industries, like Spotify and Netflix, we see that some players in that value chain are dedicated to production, some are dedicated to making the content available and some are even finding better and smarter ways to provide content to the consumer. This ecosystem finally creates value for every single user and the content becomes available at reasonable prices. However, the sustainability of these environments shouldn’t be taken for granted. Their success depends on a common recognition of their role in the system but also the recognition of the value of every single player in the field. This is what this copyright reform is trying to address - enabling a workable and sustainable way to enforce copyright by rightsholders who are continuously investing in preserving quality journalism, content that is subject to editorial oversight, written by journalists that are granted the freedom to produce quality content. While heavily criticised by internet platforms like Facebook and Google, the introduction of publishers rights is about cooperation, and acknowledging the role of the publishers in this value-chain. While they have grown valuable businesses using publishers’ content, without investing in the content itself, the European Commission’s proposal now introduces a better balance in the asymmetric relationship between publishers and internet platforms to negotiate a fair remuneration for the use of publishers’ content. In order to make investments, attract resources to do so, and so on, one needs a stable and predictable environment. This doesn’t only hold true for the publish-

Enforcement is key. Publishers may decide to enforce their rights or not, either collectively or individually. This is a future-proof right, which - in its enforcement - is likely to lead to the conclusion of specific licensing agreements with those who currently discriminately exploit our content at a grand scale. These agreements are common practice in other creative sectors. Fair and sustainable agreements for the massive commercial use of journalistic content will ensure that the sector will keep having the resources it needs to grant journalists the economic and legal certainty they need to keep producing independent and high quality journalism. These agreements will be about restoring fairness and sustainability not only towards the press publishing industry but also towards consumers: with the fair remuneration of the industry in the digital age, Europeans will continue to be able to access quality press content allowing an informed democratic debate. Freedom of the press is more than simply a policy priority. It is the foundation on which European democracy, and European civilization, is built. It is the guardian of every other individual liberty we as European citizens take for granted – of thought, conscience and prayer, of the judiciary and the right to a fair trial, of free assembly. Where the press falters, either because of a direct attack on free speech or because of commercial failure, the quality of our democracy suffers.

*Wout van Wijk is Executive Director of News Media Europe (www. newsmediaeurope.eu)

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Brand protection in China by Aphrodite A. Bletas*

When you decide to begin a business venture in China either as a trade or a productive activity, you enter a long journey full of major business risks as well as major opportunities for growth. The Chinese market as challenging and complex it might be, it requires constant diligence and expertknow-how. IP protection in China today Many foreign brand owners are totally unaware of the risk and avoid to protect their brands prior to begin their Chinese venture, either to avoid the high cost or thinking such a step is completely unnecessary. Both approaches are wrong and must be avoided. International IP protection is required for all exporting companies, and they should include China, even if they do not intend to immediately approach its market. 44

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6. Dispute solving A dispute clause in the license agreement which not only provides for disputes to be dealt with in an alternative jurisdiction and/or method but also makes very clear that all other jurisdictions are excluded and incompetent is a must. Mediation proceedings might be a method of election, but then in-country enforcement measures must also be expressly referred to in the agreement. 7. Utilize available enforcement procedures

Brand protection in 7 Steps What we said so far proves thata brand protection strategy in China isnot only advisable but compulsory. A registered trade mark isalso a powerful tool in the fight against counterfeit goods. Seven considerations are therefore essential: 1. Early registration and prior research China operates its trade mark registration system on a first to file basis therefore early registration of business, brand names and logos as well as prior to registration research is essential and should be considered long before a business decides to enter the Chinese market or even enquire about business possibilities. Not to mention that any use of an unregistered brand may result in it being considered generic and therefore not subject to protection. 2. Territorial registration As China is not part of the WIPO,to get registered protectiona company must apply for trade mark rights in China through a local office. This will not cover overseas territories such as Hong Kong, Macau and Taiwan which require separate registrations.

If a brand infringement is found in China, there are two principal routes for enforcement: administrative and judicial.Theadministrative would be the route of election asit is cheaper, quickerand discrete although it does not solve the ownership issue nor does it provide for damages. Conclusion Brand protection is for diligent business people. This is true around the world; even more so in China. For brand protection in China, a pro-active approach is essential. Despite the dangers, research, careful preparation andacting upon infringementwill lay effective foundations for a businessâ&#x20AC;&#x2122;s intellectual property. The Chinese government is incessantly trying to expand and co-ordinate the IP tribunal system, in all parts of China, not only Beijing and Shanghai becoming your best partner to this effort. Finally as China remains a preferential business partner, despite its complexities, due to the numerous opportunities it offers, its huge size and a growing economy, to ignore China is not an option.

3. Register trademarksalso in Chinese It is advisable to develop a Chinese language mark in China. The Starbucks/Xingbake case highlights the importance of registering both the English name and its equivalent Chinese symbols as trade marks to avoid wasting time and money on litigation proceedings. 4. Vigilance Monitor trade mark and domain name registrations and search the internet for unauthorized brand usage is one of best practices in China. 45

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Taiwan Seeks to Join Fight against Global Warming by Ying-Yuan Lee*

Global warming and the El NiĂąo phenomenon have contributed to record-breaking temperatures and extreme weather events around the world. In July this year, the global average temperatures taken over land and ocean surfaces were the highest for any month in 137 years of record-keeping. 46

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In June, the temperature in Taipei reached 38.7 degrees Celsius, the highest in a century. Another recent anomaly is a marked decline in the frequency of steady rainfall. Instead, we were hit with a series of torrential downpours that caused many flash floods, significantly damaging our infrastructure, ecosystem, as well as crops. More and more evidence is showing that climate change is already happening. If we don’t take action to reduce greenhouse gas emissions now, we will end up paying much more later on.

emissions across government agencies. This approach is in line with the goals of the Paris Agreement which encourages all countries to strengthen their determination to reduce emissions with the aim to achieve the long-term goal by the year 2050.

Unbounded economic growth and excessive exhaust have led to climate change which threatens human survival. Governments around the world realize this, and that’s why the landmark Paris Agreement was adopted in December 2015, bringing all nations together under a common cause that drives global mitigation actions with long-term goals. Climate change is arguably the single most important issue that put the future of humanity at stake. As a member of the international community, Taiwan cannot be a mere spectator to this problem and must come up with feasible solutions to live up to the name of Formosa, “beautiful island.” We enacted the Greenhouse Gas Reduction and Management Act in July of last year, setting our longterm target to reduce our emissions by at least 50% below 2005 levels by the year 2050. Taiwan is among only a few countries in the world that have written into law a target for reducing greenhouse gas emissions. Additionally, we’ve come to realize the need to further increase our energy efficiency and promote energy conservation, transform our industrial structure, as well as diversify our energy supply by tapping into renewable energies, such as solar, wind, biogas production using pig farm waste based on the concept of circular economy. We anticipate that by 2025, 20% of our energy will come from renewable energy. We have also established under the Executive Yuan the Office of Energy and Carbon Reduction whose main task is to plan overall national energy policy and promote conversion to newer forms of energy as well as GHG reduction. The office coordinates efforts among government agencies and also establishes partnerships between the central and local governments to reduce carbon and develop clean energy. In her inaugural address earlier this May, President Tsai Ing-Wen made it clear that Taiwan will not be absent from the global efforts to mitigate climate change and that her government will regularly review goals to cut greenhouse gas emissions in accordance with the Paris Agreement. With this ambition, we enacted the Greenhouse Gas Reduction and Management Act, with periodic five-year regulatory goals that help enhance climate-change-response capacity building and promote efficient management in reducing greenhouse gas

We only have one Earth and there is only one Taiwan. Therefore, we cannot take the issue of climate change lightly as we proactively respond to and support global initiatives. Climate change is a global issue that transcends national boundaries. The actions we take today could have profound impacts on the lives of future generations. Climate change requires not only national but global solutions. That is why governments cannot do this alone. I sincerely urge the international community to recognize and support Taiwan’s determination to gain meaningful participation in the UNFCCC and become part of the global climate network. We are willing to share our environmental protection experiences and contribute to international efforts. Together with friendly nations, we will join hands to safeguard a sustainable earth.

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Successful Companies Don’t Adapt, They Prepare by Greg Satell* The press publishing industry is often seen as an In 1960, Harvard professor Theodore Levitt published a landmark paper in Harvard Business Review that urged executives to adapt by asking themselves, “What business are we really in?” He offered the both the railroad companies and Hollywood studios as examples of industries that failed to adapt because they defined their business incorrectly. Yet today, the railroads don’t seem to be doing too badly. Union Pacific, the leading railroad company has a market capitalization of over $80 billion, about 60% more than Ford or GM. Disney, the leading movie studio company, has a market capitalisation of about $150 billion. That doesn’t seem too shabby either. While nimble startups chasing the next trend are exciting, the truth is that companies rarely succeed by adapting to market events. Rather, successful firms prevail by shaping the future. That can’t be done through agility alone, but takes years of preparation to achieve. The truth is that once you find yourself in a position 48

where you need to adapt, it’s usually too late. Microsoft Consider the case of Microsoft, which failed horribly to adapt to mobile computing. In fact, when the iPhone came out, the company’s CEO Steve Ballmer dismissed it, saying, “There’s no chance that the iPhone is going to get any significant market share. No chance.” Other attempts to adapt to Apple’s innovations, such as the Zune mp3 player, didn’t gain traction either. You would think that by so totally misreading the market that Microsoft would be near bankruptcy, but actually the opposite happened. Over the past 10 years, the company has grown revenues at the impressive annual rate of about 10% and maintains margins of nearly 30%. Those are strong numbers. Take a look at Microsoft’s cloud business and you’ll understand why. The company recently reported that it’s growing at an annual rate of over 100%. This, howev-

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er, is not a new initiative, but a direct consequence of Microsoft’s old servers and tools business that it began building for more than a decade ago. Microsoft is not a nimble company. It doesn’t impress anybody with brilliant market forecasting or slick branding. What it has done has made substantial investments in the research division it set up in 1991. When you are building capacity in your business decades ahead of time, you really don’t need to be that fast. Google One company that’s become famous for its agility is Google. So when Facebook emerged as a serious rival, it was no surprise when the search giant jumped nimbly into the space. It launched Google Wave, Google Buzz and then Google+. None met with significant success. Customers don’t flock to you just because you move fast. Still, Google is thriving and recently passed Apple to become the world’s most valuable company. To understand how, take a look at the innovation ecosystem that it’s built. It invests heavily into research and allows promising projects to incubate at its Google X division. The company is also active in the research community, regularly publishing openly in scientific journals as well as on its own blog. It invites academics to spend sabbaticals at the company, giving them access to Google’s unparalleled data sets, while they add to the firm’s knowledge and understanding of cutting edge technologies. Some of this new knowledge goes to create completely new products, like self-driving cars. Yet most of it gets ploughed back into the core business. That may be boring, but it’s incredibly profitable. IBM

doubling down on bets it made decades ago. Take the company’s cognitive computing initiative, also known as Watson, which CEO Ginni Rometty sees as central to the company’s future. IBM has been working on the basic technology for decades. Other long term efforts, such as quantum computing and neuromorphic chips, are focused on powering the company long after we reach the limits of silicon chips. These new businesses aren’t likely to have a measurable impact until sometime around 2020, but when they do, most firms will be struggling to adapt. IBM won’t have to. Agility is overrated Agility is a very positive thing. Apple didn’t create the first digital music player, the first smartphone, or the first tablet computer, yet it came to dominate each category. Amazon wasn’t the first to sell books on the Internet, either. These companies succeeded not because they were faster, but because they developed products that were demonstrably better than their competitors. But truly great companies don’t scramble to adapt to the future, because they create the future. Take a look at any great business and it becomes clear that what made it great wasn’t the ability to pivot, but a dedication to creating, delivering, and capturing new value in the marketplace. The technology companies that endure are the ones who spend years — or even decades — to create the next generation of products. Which brings us to something else Theodore Levitt said, “People don’t want to buy a quarter-inch drill, they want a quarter-inch hole.” Clearly it is not a particular business category that defines a company, but its ability to solve problems for its customers. And you can’t solve really tough problems by simply moving faster. Great companies prepare the ground long before.

There has been probably no company that’s transcended as many technology cycles as IBM. It was a leader in punch card machines, then dominated mainframes and led the charge in the PC era. It then built a phenomenal business around consulting services that helped design, build and maintain sophisticated systems for enterprises.

And that’s really the point. Business that focus on solving big problems and are willing to invest in them for years —or even decades — can get a lot of other things wrong.

Today, as those installed systems are moving to the cloud, IBM’s business is reeling with revenue dropping for 17 straight quarters. Many would say that the company desperately needs to become more agile and adapt. Yet IBM seems to be doing just the opposite,

*Greg Satell Greg Satell is a popular speaker and consultant. His first book, Mapping Innovation: A Playbook for Navigating a Disruptive Age, is coming out in 2017.

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Artist Nelly Rapti expands her palette globally by Alexandra Papaisidorou

Painting with unique firm style makes Nelly Rapti one of the most upcoming Greek talented artists of our age An artist who has recently seduced the Chinese culture and spirit as well as many Europeans critics of art by numbering public exhibitions all around the five continents. Her exceptional harmony in shapes, colours, concepts, schemes and presentations let her be easily on top of the most preferential artists participating in numerous personal exhibitions gaining more and more popularity. The last one was on the occasion of an international medical conference in Athens, Greece where the Chinese professor, Mr. ?hou, Ping-Hong, MD, Prof. - Endoscopy CenterZhongshan Hospital, Fudan University, Shanghai, China - met Nelly Rapti’s work of arts and expressed his desire to create his own portrait in her special technique that appears to be so close to fine arts of Chinese aesthetics. Professor Zhou PingHong pointed out that the unique drawing skills of Nelly Rapti make her work of arts to stand out and her sensitiveness excites him. The same interest was also expressed by Mr. Zhen Su - Senior Vice President, Erbe China – who asked exclusively from the artist to create his portrait as well. Nelly Rapti was hosted by the best-known ChineseTV channel CCTV in an exclusive interview on her work and artistic talent concerning her latest exhibition and particular style - taken place in the luxurius downtown Hilton Athens Hotel which is also her gracious sponsor in each of her artistic venues annually. She explained that her painting style is highly characterized by love,

balance and her innermost impulses. The artist points out that she will never stop promoting her birthplace, Greece, directly influenced by its beauty, civilisation and mentality in a place where democracy, arts and science coexist and complete the perfect scenery of her inspiration. This is exactly the subject of her latest art exhibition: a collection of dreaming Greek landscapes which depict the typical authentic Hellenic nation. Lithographies were also one of her most distinguished exhibitions that attracted many positive comments and was the sequel of one of her first art collections, started back in 1998. Nelly Rapti never stops mentioning that the role of art nowadays consists a type of “cure” towards the difficulties and adversities during the period of a both financial and ethical crisis. Soul is the best colour in her palette, concludes Mrs. Rapti!