INDIA & EU
- Economic
- Post Brexit importance
- Trade at 100 billion $
- EU is India’s largest trade partner
- Largest export destination and source of FDI
- Challenges in implementing FTA
- Officially called BTIA
- Broad based Trade and Investment agreement
- Talks started in 2008 . Stalled since 2013
- EU demand
- Cut protection in the automobile sector
- Officially called BTIA
As high as 100%
India’s stand- Cutting duties will mean dumping from the heavily subsidised agriculture in Europe
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- TRIPS +
- Greater FDI in banking & insurance sector
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Done
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- Dispute resolution settlement wherein a private party ca drag the Indian state to an International Tribunal
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New BIT
ISDSS
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- Indian Demand
- Reduce unnecessary Sanitary and Phytosanitary SPS & Technical Barriers to Trade measures against Indian food exports
- Remove India from “data insecure” list
- Indian Demand
Would help India IT, BPO industry
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- More access to Indian labour
- Greater access for generic drugs
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Recently, EU banned generic drugs from GVK
- Political
- India more inclined with the power blocs of Britain, France and Germany than the mainland
- European Investment Bank (EIB) loan for Lucknow metro
- Security
- India, EUROPOL possible information exchange
- Individual countries – France, Germany
- Portugal – Abu Salem
- Tech
- ARIES
- India, Belgium, Russia joint telescope
- Asia’s largest telescope
- In Nainital
- Clean energy partnership
- ARIES
- Space Diplomacy
- Nuclear Diplomacy
- Defence Deals
- Social
- Dutch – LOTUS – urban sewage
The European Union
History
Current status
Historical Pros of the European Union
- Stabilised the bitter rivalry between France & Germany, and saved the world from another world war
- After the end of the cold war, EU provided financial support to the erstwhile communist countries, also offered them membership
- Economic integration
- Formation of Euro
- Common market
- Gave a boost to the European Economy , and subsequently, an export driven world economy
- Thus, EU received the Nobel peace prize in 2012.
- in recognition of EU’s normative role and influence for spread of democratic values, rule of law, respect for human rights and rights of the minorities in its neighbourhood.
- Political status of EU
- Very complex
- Has jurisdiction over issues like Competition Policies
- Joint jurisdiction involving coordination with sovvereign states over issues like defence
- No jursdiction over others
General problems the EU is currently facing
- Economic
- Economy still down
- Deep Recession in the PIGS (Poland, Italy, Greece, Spain) countries
- All but Britain are facing negative or 0 growth
- With huge uncertainty over fate of Greece, and the chances of a default, investors worried and taking their money back to US
- Euro at a 12 year low
- Political
- Challenge in Greece
- The ruling party Syriza is adamant not to follow Europe imposed austerity
- Elaboration required
- Britain
- Referendum over being a memeber of EU or not in 2017
- Emergence of right wing parties like UKIP
- Ukraine
- Challenge from Russia
- Democracy down
- Elaboration required
- Challenge in Greece
- Social
- Immigration problem in the south
- Racial Divide
- Immigrants drowning
- Elaboration required
- Immigration problem in the south
- Elaboration required
GREECE Problem
- Troika of IMF, ECB & EU extended a loan
- Thrice
- 2nd bailout of 240 billion Euro
- Conditions-
- Austerity – low public spending on social security, pension , govt jobs
- However, austerity is only expanding the problem
- According to Paul Krugman, the money is passing on from the traoika to the German banks via Greece
- Out of the 240 billion euros, 220 was used to settle past debt
- Hence, money actually injected into the economy to stimulate demand is absymally low given that austerity is reducing Public Consumption
- Its GDP has declined by 25% in the last 5 years
- According to Paul Krugman, the money is passing on from the traoika to the German banks via Greece
- Greece on brink of default
- Could lead to a Grexit
- Pros
- Greece in Euro is unable to devalue the currency and stimulate exports
- Greece out, can help do this
- Greece out will also likely have gas deals with Russia
- Europe too will not have to face the burden of bailing out and inducing risks
- Elaboration Required
- Greece in Euro is unable to devalue the currency and stimulate exports
- Cons
- Will deeply hurt the tourism industry, the main sector, which benefits from European association
- Portfolio and direct investments will fall deeply – Already happening
- Free movement of labour stops, employment crisis
- Europe
- Taking money back to safer havens- US, UK
- European banks tend to loose as the banks lending at risk
- Elaboration required
- Pros
- Political
- Right wing Syriza party elected to power, which promised on reductions in austerity
- Looking for an option to tie up with Russia & act as a medium to export Russian oil & gas
- India & Greece
- Repurcussions due to a Grexit
- In short term,
- investors will panick & take back the hot money to US, UK,…
- Indian ruppe will be hit, making imports expensive
- Euro will be down, making exports to Europe expensive
- Euro loans will become cheaper- yet such loans are only a small %
- Greece -> depreciation -> Exports up, tourism industry will get a boost
- Long term
- As, the largest debt ridden country of the Eurozone leaves, EU will be in a better position
- Problem – Could set a ripple effect
- In short term,
- Repurcussions due to a Grexit
- Elaboration Required
Netherlands
- 2nd Largest horticulture exporting country
- Has a seed valley just like the silicon valley
- Teaming up with the Indian govt to start 10 centres of excellence in India wher information about seeds can be passed on to the farmers
- Subsequently, the Dutch seed providers will benefit
EUROPE Migrant Crisis
- Worst since WW2
- Mostly from Syria
- Most affected border nations – Greece, Italy
- Agreement
- New relocation scheme
- About 1, 60, 000 will be relocated to ease the pressure in Greece and Italy
- Dublin agreement – Those nations in which the refugees first arrive will be responsible
- Mainly 3 – Greece, Hungary and somewhat Italy
- Greece- economically down
- Hungary- has fenced its borders
- In fact, is spending more on border fencing than relief and resettlement of asylum seekers
- Schengen agreement – free visa less movement of normal people across the continent
- Just for info – Maastricht agreement – made Euro into a monetary union
- New relocation scheme
- Need for other states to follow
- Turkey, Lebanon- Refugees now making 25% of the population
- Europe only has 0.1%
- Each nation needs to have a quota system to accept people, so that no single country suffers
- More importantly, this needs to be followed
- Till now only Germany seems to have done its bit
- 3 pillars
- Weeded out economic immigrants out who are deported back
- Germany’s immigration policy that focusses on Integration
- Also municipal plan to disperse Immigrants instead of making Ghettos
- May be one reason why No terror attack on German soil
- 3 pillars
- Similarly, American quota of 10k is too little, too less
- Turkey, Lebanon- Refugees now making 25% of the population
- The magic of numbers
- 3 lakh this year expected
- Around 3k have died in the process
- Similarlities to Rohingya crisis