FEMISE annual Conference 2016 on: “Two Decades after Barcelona: Rethinking the EU-Med Partnership”

Summary-reports of the Plenary Sessions

Do we need to re-think the Euro-Mediterranean Partnership?

Twenty years after the Barcelona Process outlining Euro-Mediterranean cooperation, the results seem rather disappointing. Moving towards closer ties between the two shores of the Mediterranean is being hampered by instability in the Maghreb and the Middle East. From illusion to disillusionment …

The Arab Spring shattered the limited progress made since 1995 in support of closer relations between northern and southern shores of the Mediterranean.

“Up until then, the European Union dealt with the states’ governments. It had no option but to negotiate with dictators who did not represent the people,” says Ahmed Galal, president and coordinator of the FEMISE and managing director of ERF. He states that the superficial nature of the association agreements meant the peoples’ expectations could not be fulfilled, the emphasis having been put on industrial activity without any regard to growth in services.

“The results are poor. Time has come to re-think the neighbourhood policy and to adopt concrete measures in favour of trade as well as for the movement of capital and labour,” insists Galal.

Europe between optimism and naivety

The Barcelona Process echoed a real sense of optimism on Europe’s part. The fall of the Berlin Wall marked the end of an era, the Europeans saw themselves living in a world at peace. “We have gone from idealism to realism,” suggests Sergio Alessandrini, professor at the University of Modena, who recommends not one but several European Neighbourhood Policies (ENPs). (Read more in his powerpoint presentation: Rethinking the Euromed Partnership: Fine-Tuning or Reinvention? (Pr. Sergio Alessandrini) ).

The economic and migrant crises have shattered member-state cohesion. The priority has been given to stabilising migratory flows at a time when the €15bn budget earmarked for cooperation has been frozen. “Financial perspectives are static until 2020. Yet Europe has just given €3bn to Turkey to stem the flow of migrants. We were naïve to think we could apply the approach taken when setting up the European Single Market to the Mediterranean countries,” admits  Senén Florensa, president of the executive committee of the European Institute of the Mediterranean (IEMed). “Over the past 20 years, Morocco’s economy has grown on average between 5 and 6% each year. Over the same period, the Tunisian economy stagnated and Libya and Syria rejected the convergence process with Europe.”

Former French President Nicolas Sarkozy’s brainchild UfM was limited to concrete projects, leaving aside the political aspect. Yet it was at the very moment populations were taking to the streets to demand democracy. “How can one satisfy governments and realize people’s aspirations?” ponders Elisabeth Johansson-Nogués, economics researcher at the Barcelona Institute of International Studies.

She believes the ENP must take this parameter into account or else it risks making these countries more vulnerable in the long term.

New paradigm needed for Europe-Mediterranean partnership to be mutually beneficial

Bringing the Arab countries into the globalized and global value chain would bring the two sides of the Mediterranean closer together. The new paradigm for Euro-Mediterranean relations to prosper hinges upon political innovation, accelerating customs reforms and a multilateral approach.

“Twenty years after Barcelona, certain objectives are still unmet. We must work to improve the sharing of wealth based on north-south and south-south relations. Europe remains the Mediterranean countries’ main trading partner with €314bn exchanged in 2014 against €279bn a decade earlier. The Arab Spring has increased the need to work together to attain sustainable economic growth,” decalres Peter Young, deputy head of the European Commission’s E3 Trade Unit. According to Young, the lack of political stability and security could have an impact on trade.

He recommends an acceleration of customs reforms to help support businesses. “Trade policy must take into account the global value chain that is emerging,” he adds, taking Morocco as an example. The country has managed to insert itself in the value chain in the automotive and aeronautics industries. In Tunisia, he points to the country’s performance in the mechanical engineering and electrical sectors.

“The southern states haven’t done their jobs”

Incidentally, these are the only two countries with whom the European Commission, in 2015, managed to start talks aimed at establishing a free trade agreement (DCFTA).

With European policy on neighbouring countries in the process of being revised, Scientific Committee president and FEMISE coordinator Patricia Augier deplores the lack of research studies on the impact of non-tariff measures. “If the Mediterranean countries adopt a harmonisation based on European criteria regarding non-tariff barriers, we must seriously look at the issue of increased production costs. Are Mediterranean countries prepared to abandon certain markets?” asks the economist. “Are we talking about integration or convergence? This vagueness has been maintained for years, since Europe was using tools meant for integration. European policy towards neighbouring countries tends to lead to bilateral relations, when we really need to breathe new life into the regional aspect.”

Is Europe responsible for the failure of the Barcelona Process? Former deputy director of the OECD’s Trade and Agriculture Directorate Raed Safadi points the finger at the Arab countries who, over the past two decades, have failed to fully insert themselves in the global value chain. “Exports from Arab countries to Europe are flat. The southern states haven’t done their jobs.”

For his part, Vassilis Monastiriotis, associate professor and director of the research unit on South-Eastern Europe at the London School of Economics (LSE) suggests political innovation can be the new paradigm for the Euro-Mediterranean partnership. (Read more in the powerpoint presenation:  On the “new EU paradigm” The transformative power of the EU re-loaded? (Vassilis Monastiriotis)

The European Union’s challenges in the short term

The refugee crisis has put Euro-Mediterranean economic construction on the back burner. The short-term policy put in place to provide aid to migrants has truncated the budgets allocated to economic development in Mediterranean countries.

The sheer size of the migrant issue Europe is facing is far greater than the displacement of populations seen during WW2. “The first sinking of a refugee boat off Lampedusa in October 2013 was quickly forgotten,” points out Frédérica Zardo, researcher at the department of cultures, politics and society at the University of Turin. The awakening only came in April 2015 when a trawler capsized off the Libyan coast with 800 migrants on board.

“Out of the 300,000 refugees accounted for in the first eight months of 2015, 200,000 made it to Greece. The trend has continued, with 67,000 migrants registered in January 2016 alone,” explains Panayotis J. Tsakonas, professor of international relations, security studies and foreign policy analysis at the University of the Aegean. He deplores the refusal of some countries to take in migrants. To date, only 500 have qualified for relocation. (Read more in his powerpoint presentation: The Migration/Refugee Crisis  in the Mediterranean: EU Perspectives and Strategies (Pr. Panayotis Tsakonas))

A divided Europe is witnessing a rise of far right movements. “The new neighbourhood policy is the consecration of a shortfall of collective ambition and a narrowing of regional vision. The Mediterranean has fallen of the radar screen. The Euro-Mediterranean is no longer part of governments’ dreams. The corrosive effect of the crisis is forcing us to arbitrate, manage fears in the short term,” observes Henry Marty-Gauquié, France director for the European Investment Bank.

No donations, no aid for refugee camps; the EIB’s margins are tight. “It has committed itself to short-term measures, for example the construction of a hospital in Turkey, on the Syrian border at Gaziantep, and a loan to Amman to promote entrepreneurship among the refugees,” points out Marty-Gauquié. He says the 5 to 12 billion Euros set aside to cope with the emergency “will be taken out of the budgets financing established policies aiding Mediterranean countries“. In fact, the Mediterranean countries will be obliged to make certain choices. “Together, they will have to find a common denominator, negotiate priorities,” points out Javier Albarracin, Director of Socio-Economic Development in the IEMed.

Europe is giving up on the “1995 myth” and adopting a more pragmatic approach. “Now, we deal with each country according to its state of progress. The Arab countries need to make some societal choices (water, energy and food resource management, security…) to converge towards a globalized economy and build a regional value chain,” explains the bank representative, holding up Morocco and Tunisia as examples.

The FEMISE Coordinators thank the participants and hope to see you in 2017 for the next Annual Conference.

For the photo album of the Conference click on this link.

The Powerpoint Presentations can be found below.

Thematic Sessions

FEM41-08 Corporate performance in transition in the MENA region (Inma Martínez- Zarzoso)

FEM41-09 Spatial proximity and firm performances. Empirical evidence from Turkey, Tunisia and Italy (Anna Ferragina) 

FEM41-12 Determinants of Export Performance of Firms in Selected MENA Countries (Yan Michalek – Forthcoming)

FEM41-04 Winners and losers in the Tourism Industry along the transition process: Evidence from South and North MED countries (Doaa Salman)

FEM41-07 FDI in MENA: Impact of political and trade liberalisation process (Juliette Milgram)

FEM41-13 THE ROLE OF VICINITY LINKAGES IN THE EU- MED REGION FOR TRADE GROWTH: FOCUS ON MIGRATION, LEVEL OF EDUCATION, AND SOCIAL INTEGRATION (Andrés Artal-Tur)

FEM41-01 Inequality, Intergenerational Mobility of Women Educational Attainment and Inclusive Policies in Arab Countries (Cristina Boboç)

This conference is organised with financial support from the European Union through the FEMISE project on “Support to Economic Research, studies and dialogues of the Euro-Mediterranean Partnership”.