Brexit: Support Theresa May. At Least for Now.

I argued earlier that a major flaw with the Brexit referendum was lack of any positive program in case of leave wins. The current political spectacle in London is an attempt to define such a program, and the withdrawal deal that Theresa May has negotiated is one related proposal. It satisfies no-one. But it is the only realistic compromise we are now left with.

The central problem with Brexit

The central problem with Brexit now, 2.5 years after the referendum, is still the same: Britons cannot agree what "leave" means. The country is fairly equally split between leavers and remainers, and unfortunately these two opposite preferences are hard to reconciliate. The options in the middle, along the lines of the "Norway option", satisfy only a few.

I think the best way forward in summer 2016 had been simply to take time off. Theresa May could have started her prime ministership by asking: Well, voters. You want out? So let's see what kind of options we have here, and what do you think about these. And waited with triggering the article 50 until she had an answer to these question. Unfortunately, this was not the case. There were no attempts to start a serious discussion about what Brexit may mean, and what kind of compromises are possible.

I do not see such attempts now either. The prime minister's repeated claims that there will be no second referendum sounds like "I don't care about which Brexit you want." Moreover, accusing those who are worried with no-deal outcome for torpedoing the negotiators and being part of the "project fear" is neither an invitation to a serious dialogue. Instead of trying to build a consensus, at least a somewhat consensus, the leaders are pushing to implement their own favorite flavor of Brexit. This has not worked well, but mainly because there is no consensus in the Conservative party either, and not because of concerns regarding the "will of the people".

It is not just that Britons cannot agree on what does leave mean. A large number of people do not want to leave EU at all. Anti-Brexit march at Conservatives' conference, Oct 1st, 2017.

Take time off now

But I don't think the second referendum is a good idea. It would suffer from some of the same flaws as the first one. While we now can offer a positive program, for instance "no deal", "May's deal", and "remain", the majority of votes will probably go to both of the extreme options, and that will give a closely split vote again. Hence there will again be no clear mandate about how to proceed. But the political battle over the exact wording of the question, the pre-referendum campaign, and post-referendum interpretation will deepen the existing cleavages, increase resentment and undermine support for the democratic institutions in Britain.

I think what UK needs now instead is just time off. It cannot have time off as EU member any more, at least not without a rushy U-turn and without badly hurting the feelings of the large group of leave-minded people. I think we should have a second referendum. But not now. Let's the smoke clear and contours of the post-Brexit world appear. Let also one of the options garner clearly more support than the alternatives.

But so far, let's take Theresa May's deal. No one is happy with it, I know. I am not happy either. But it is a realistic deal, and it allows UK to stay in the EU-s "waiting room" while it attempts to understand if it wants to enter again or leave for good. Call this "transition period". But the transition is not about the trade negotiations, but about UK trying to transition into a country that can somewhat agree on it's future.

What is wrong with referendums vol 2: Brexit

In a previous post I discussed some of the problems with referendums. Brexit referendum had it's share of issues. I'll discuss here two of these.

Restricted categories of voters

First, it violated the principle that everyone who has large stakes in the process can have a say. Two groups that are most affected by British EU membership and it's potential termination are the EU citizens living in UK, and UK citizens living on the continent. Unfortunately, these two groups had limited voting opportunites. British expats can only vote up to 15 years after leaving the UK, and Non-British EU citizens (except Irish, Maltese, and Cypriots) were excluded by a political decision. Maybe exaggerating a bit, but one may say that only those who weren't using the EU provided free movement were deciding it's fate.

In a broader sense it is a common situation: migrants usually cannot vote (despite paying taxes) in their new host countries, and often find it hard or impossible to vote in their countries of origin as well, so migration-related policies are decided by people who are not moving. This is partly because of design, insiders are keen to keep their exclusive rights, but partly due to insiders' inherently better knowledge and better networks.

No positive question

Second, the referendum asked a "negative" question—there was little indication what will happen in case "leave" wins. If "stay" had won, the answer had been simple—more of the same. But leavers had no positive program, and one can argue that leave voters may have voted for very different and incompatible ideas.

One of the central issue with the Brexit referendum was lack of any positive program. Two years later, the UK government is still debating what does "Leave the European Union" mean.

If one disregards the slight margin, one can still argue that leaving the EU was "will of the people". However, one cannot extend this claim to any particular type of Brexit, or to any particular reason, such as immigration. These claims are either based on polls or some other kind of interpretation. But polls and interpretations are just that—polls and interpretation—and not the "will of the people".

It looks like Britons have currently at least two incompatible "wills". Because of the slight margin and blurred options, the referendum gave a mandate not for leaving the EU, but to bring the UK and EU relationship back to the drawing board. This may mean leaving the EU but that should be a different decision, taken years later, and including a positive program for what will happen in that case.

What is Wrong with Referendums? A Reply to Geert Wilders

Recently (2015-11-19) Geert Wilders published an article in New York Times arguing that Europe should hold national referendums on immigration policy. But referendums are not necessarily fair, nor are they the ultimate form of democracy. Referendums have two problems: first, only insiders can vote, even on questions that largely concerns outsiders. Second, everyone has a single vote of equal weight, even in case where the importance of the outcome differs widely.

Who Can Vote?

Current "universal" voting is limited to "insiders", those who are either confined to a certain territory, or possess a certain legal status. In case of national referendums, these are typically citizens of the country; in local referendums these may be residents of a city. Outsiders cannot participate, even when voting over issues that have major consequences for them. This violates a central pillar of democracy, the ability to influence decisions that affect you.

A referendum over immigration policies is just such an example. Unless potential immigrants also participate, we cannot talk about universal democratic decision. Similar issues arise when neighborhood residents vote for restrictive zoning laws. The potential "immigrants" to the neighborhood who are adversely affected cannot participate because they are not residents. The Greek referendum of 2015 shared similar traits: only Greek citizens were voting over a decision that involved most of the EU.

Greek 2015 referendum ballot. The referendum had several problems, only Greek citizens voting over a pan-European decision was perhaps it's most serious flaw.

How Big Is the Vote?

Another problem with referendums is the "size" of vote. Traditionally, everyone has a single vote. This is true even if different people have very different stakes in the question. In this way the majority can always outvote a minority. For instance, in many places the majority may outlaw homosexuality. The Swiss minaret law is an outcome of a referendum that was flawed in this way. I don't know how many Muslims and non-Muslims actually care about minarets, but I can imagine it is a far less important issue for non-Muslims. But they could easily muster a majority. As an extreme example, imagine that Hitler put Nuremberg Laws, the Nazi laws that robbed Jews of their rights, on a national referendum. Would we consider the outcome democratic? Analogously, potential migrants may outvote the whole EU if given an equal weight.

Solutions

Unfortunately, these two problems cannot easily be corrected. Although it is not fair to exclude outsiders from decision–making, and give equal say for those with unequal stakes, we cannot calculate the fair vote size. Referendum is justified when the electorate has roughly equal stakes and outsiders are little affected. If this is not the case, one should not call for a referendum.

Instead, we may strive toward inclusive representative bodies that also involve outsiders. In case of the current refugee crisis it should include representatives from both EU, and refugee origin and transition countries. Such conferences, potentially meeting regularly, would ensure that insiders have more rights but outsiders will also have a say.

Britain in EU: More Powers to National Parliaments?

More power to national parliaments is a democracy–enhancing move only if the national decision-making occurs in areas that have little impact on the others. If the opposite is true, it diminishes the control we have over the important decisions.

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David Cameroon has announced his requests to the EU. One of them is a larger role for national parliaments in shaping EU regulations. Although national parliaments may be the most democratic institutions we have, the areas where such a "repatriation of powers" occurs must be chosen carefully. Otherwise it may weaken the democracy instead. There are two main reasons.

Just a common market—or an "ever closer union"?

Interdependence

First, and most importantly, only some decisions can be made by national parliaments. Many decisions can not, such as international treaties, trade agreements and international law. Almost by definition this type of legislation is not made by individual states. Analogously, parliaments do not vote on what the other countries do, be it introduction of incompatible regulations, or conducting irresponsible fiscal policy in the hope that we will bail them out later. Neither have we much room to vote about technical standards, such as Apple's new operating system or airport security procedures.

A number of major problems EU currently faces cannot be solved at national level. For instance, the refugee inflow must either be received, or stopped, at the EU border. The current country-based decision making essentially allows Hungarian parliament to decide over number of refugees in Serbia and Croatia, and, if German "national parliament" decides to close it's borders, it has severe impact on Greece and Italy. Analogously, the "single market", one of the pillars of EU, is a form of extended free-trade agreement, a large number of common standards for product labeling, food safety, and labor treatment. By definition, agreement is something we cannot do alone.

More powerful national parliaments in this type of decisions will weaken EU without strengthening the member–states. We will notice more small inconveniences, such that you cannot use certain mobile services in another EU country, or your business has to hassle with incompatible regulations across the border. Negotiations among 28 sovereign states are far more slow and costly than central decisionmaking, and there is little incentive to overcome even small special interests in the name of a common good. National politicians are elected to stand for "national interests", and all 28 national interests are seldom aligned with the common one. The underlying problem is interdependency, our decisions may influence others even if the others do not belong to our "nation". Such decisions should be done by inclusive higher level bodies, such as European Parliament.

Enfranchisement of EU Migrants

The other, and currently less important reason, is enfranchisement of EU migrants. This is a large group of people who cannot vote in national elections but is subject to the corresponding national legislation. This is simply not fair. I think the first-best solution would be to give EU migrants voting rights rather soon after moving to another country (say, in 2 years). But until it happens, decision–making by EU institutions offers this group more say about their lives.

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Finally, even EU is too small for many important decisions. Many contemporary problems, such as global trade agreements, climate change, or the puzzle of Middle–East, cannot be solved at EU level either. We need global governance more than ever before. How to achieve this in a democratic way is one of the big challenges of our time.

Common Arguments Against Hosting Refugees Do Not Justify Strict Immigration Policy: Help some if you cannot help them all

Three everyday arguments against granting asylum for refugees are "we cannot help everyone", "refugees should be hosted in their neighboring countries", and "we don't want economic migrants". All these claims make a point, but none of these can be used to justify a strict asylum policy. Below, I mainly take the European view but the arguments also apply for other developed economis like the Australia and Israel, and for the middle-income countries, such as Brazil or Dubai as well.

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A common argument against granting asylum is that there is a too large number of potential immigrants outside the European borders. As we "we cannot help everyone out there", we should keep our borders firmly closed. Otherwise, the rising human flood will flush away both us and our culture. But this argument is fighting a strawman. Accepting some asylum seekers does not imply we have to open borders for all the potential immigrants. We should think about doing our "fair share", not that we have to help everyone. If EU accepts, say, a million refugees, that is a million humans whose lives are improved. And this is a good thing. One can draw a parallel with other calamities here, many survived holocaust exactly because there were people who were willing to help just a few. If you improve the life of someone, this is a life improved, however large is the number of those you cannot help. Another, more pragmatic reason is that by moving some people out of crowded refugee camps in poor regions we lower the pressure both on the camps and on the regions. Indirectly we help the others.

Water tank in al Zaatari refugee camp. Providing water and sanitation for thousands over extended period is a major logistical challenge and may need a substantial infrastructure put in place.

By Mustafa Bader (Own work) [CC BY-SA 4.0], via Wikimedia Commons

I agree that the preferred location for displaced people is close to their region of origin. From there it is easier to go back once the fighting is over, and cultural similarity helps too. But geographic and cultural proximity is just one piece in the enormous logistic challenge. There are many more variables that matter, in particular the availability of jobs and infrastructure to host a large number of people. Conflicts often occur in poor areas were neighbors can offer little besides a similar language. And countless examples show that cultural similarity is no obstacle for killing. Neighbors often do their fair share. Lebanon (4.5M inhabitants) hosts 1.2 million Syrian refugees. 500 million strong EU is far better able to provide the living necessities for a million newcomers. Poor neighbors' help is necessary. But without proper housing, sanitation, jobs and schools, and the conflict lasting for decades, the tent camps are not a solution.

The last major famine in Europe, the Irish Potato Famine, led to a substantial increase of emigration to the U.S.

By James Mahony [Public domain], via Wikimedia Commons

Finally, I don't see a clear difference between refugees and economic migrants. Sure, we have to spend our limited ressources on those who deserve it most. But often poverty is accompanied with fighting, and famine may be even more deadly than war. I would suggest to introduce an immigration lottery, similar to the US green card lottery where everyone may try their luck. Give those who are fleeing war and desperation a substantially better chance to be granted access, but give the others an opportunity too. In this way we avoid drawing too strict lines between humans, and too much desperation among those who were left out.

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We can do things the poor regions cannot. We should help some even if we cannot help everyone.

Mediterranean Migration Crisis: Do Not Blame the Smugglers...

The recent disasters in the Mediterranean have brought immigration and human trafficking to the top of European agenda. EU has responded with a predictable face–lifting proposals—promising to
triple the maritime patrols and tackle the issue "at its root", by attacking human traffickers, and by improving the border policing of the African states (in particular Libya).

But this is not the root of the problem. The main underlying problem is the world inequality, both in humanitarian and economic sense. Too many people are living in a desperate situation, be it because of threat to their lives, or lack of opportunities in the place where they happen to live. And for these people, the smugglers are simply the least bad of the available options.

I stress this again---the traffickers are the best available option for hundreds of thousands of migrants. All these people hope that the traffickers help them to escape death and poverty, and to fulfill their dreams of a better life. They are willing to pay an amount, comparable to the price of Europe-US return flight in business class. What they get for it is a 90-percent chance to cross 200km of sea in a crowded wreckage. Remember also that these people cannot just save this money from their paycheck over a few months, for many of them it amounts to years' of savings. This should remind us what scale of human suffering is out there behind our borders, how desperate are refugees, and what is the role of the smugglers.

This is not to say that the smugglers should not be blamed at all. They still must treat their "customers" in a humane manner. They should inform the migrants about the dangers and opportunities of the trip. They must keep their promises. Slaughtering selected people because of religion or other reasons is plainly criminal. Smugglers should also follow minimal safety and navigation standards. But these problems can be addressed by training, regulation and oversight of the smuggling industry, not by airstrikes. Or even better—by opening a regular ferry line that adheres to the accepted safety rules.

The initiative to improve the border patrolling and crack down the human trafficking in African countries is more like outsourcing the border guarding jobs further away to forces with more dubious human rights record than the European ones. It will not help with the underlying problems, and it will increase human suffering by leaving hundreds of thousands in a desperate situation without the best option to escape they have had up to now. To really address the root cause would mean to ameliorate world inequality, and to pacify Middle-East. This is far beyond what EU (or anyone else) can realistically hope. Unfortunately, the simple and realistic alternative—open the borders to substantially more refugees—will enjoy very little popular support.

So, dear politicians, I understand very well that tackling the root of the problem is simply a fantasy. I also know that the voters do not let you to take any available steps either. But you still can use the right words: Our response will be to build a stronger fence. Because suffering further from our borders is not our problem.

Allowing EU parliament to set and collect taxes would strengthen democracy

Despite its many laudable achievements, EU is moving from one crisis to another. Currently, a fight is continuing over the federal budget. In many ways it looks like a true democracy in action—there are only a limited number of democracies that are able to pass such a bill without complex and costly negotiations. Unfortunately, another side of story looks less normal. The main issues cannot be solved between political forces inside of the structure (i.e. EU) itself but between EU central structures and the member states. In particular, the countries re-negotiated the budget which was already passed by the EU parliament. I have several concerns about such a process.

First, it is not exactly enhancing European democracy. EU is often accused of suffering from a democracy deficit as most of the important decisions are done by bodies that are not directly accountable to the public. Here we observe an example where a decision by the only directly elected political body in EU must be approved by the Council (governments of member states), a body which is not elected.

Second, the version of the budget, approved by the member states, is smaller. I am not arguing for a big government here, but many weaknesses in Europe today are related to too little federal decision-making. The examples include common foreign and defense policy, immigration policy, ESM and Eurozone banking regulations, and areas such as cellular networks, pensions systems, education systems, etc, which suffer from little coordination and too many incompatible regulations. These are areas where more centralized decision-making has a potential to offer substantial efficiency gains even in the medium run, including lower member-state budgets.

Third, reacting to financial crises, like the bailouts of Greece and Cyprus, proceed in a slow and inflexible way because the consensus of all member states is needed. Such decisions should be made by a central EU body (and potentially approved by EP). That would lead to a lot faster decision-making. However, EU can decide over money only if it is able to collect it.

The only feasible long-run solution I can envision is to introduce real federal taxes (currently, only custom tariffs are determined by EU). By federal taxes I mean taxes levied not to member states but to individuals and businesses across the EU. These should be based on income, value-added or wealth, exactly as most of the
current taxes. In this way the EU would be more a project of "individuals" and less that of the "countries". Obviously, if we want to avoid tax hikes, the member states should lower their contributions accordingly.


Currently, most of the EU budget is payed by the member states. Dark red states pay the most and the blue ones receive the most of EU money per capita. Europe should move toward more direct taxes, levied directly to individuals and businesses, instead of member states.

I agree this would constitute a major step toward the European Federation. I do not think this will happen soon. But certain steps might be feasible already now. For instance, we could start harmonizing tax concepts—not even rates, but the understanding what exactly constitutes the tax base and how to measure it. In order to introduce common taxes on income or value added, we first have to agree on how these concepts are defined. One might also want to unify tax exemptions, a major reason why tax systems are so hard to understand.

Time to move?

Why CPH does not like Euros?

This year I noticed that two European airports, located in non-euro countries, discriminate against paying with euro cash. I am sure there are more such airports, but I have just experienced that in Copenhagen and Riga. This is a little bit surprising as both of these airports are significant players in their region (Nordic and Baltic Countries respectively). Even more, both of them aspire to become even more important, to offer more destinations and to capture more transit passengers.

The last wish -- to capture transit passengers -- almost sounds like an obligation to accept euros for an European airport. True, both of them accept it. But the exchange rate may be rather unfavorable, and the change is given in the local currency, in this way rendering the euro cash next to unusable. Why that? I offer three potential explanations, one political and two economic ones…

1. Operating with two currencies in every single shop may be too costly, possibly because most non-local customers use credit card anyway. However, passenger ferries in Northern Europe regularly accept currencies of both departure and destination port. It shouldn't be too different for an airport.  
2. This is a form of price discrimination. Foreigners without a credit card do not have a choice -- either you accept the unfavorable terms or you exchange money with even worse rates. But I doubt those without credit card belong to the least price-sensitive group...
3. For political reasons, the shops cannot treat euro on equal terms with the local currency. I remember stories of this sort, but unfortunately not the details. But why should politicians care, especially while they also want to have their "pet airport" to gain even more traffic and fame? 

I don't know the answer. Anyone else?

Waiting for Pan-European Cellular Networks

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Eurointegratsioon kui riigikaitse

Väikeriigi iseseisev kaitsevõime jääb alati piiratuks. Samas on ka Eurointegratsioonil riigikaitseline dimensioon, millele peaks rohkem tähelepanu pöörama.
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Nii nagu aastal 1919 suudaks praegune Eesti armee tagasi lüüa üle piiri valguvad halva relvastuse ja moraaliga jõugud, mitte aga suure riigi armee. See on Eesti iseseisva kaitsevõime põhimõtteline probleem -- ka siis kui sõjalisi kulutusi oluliselt suurendada, jääb väikeriigi võitlusvõime väga piiratuks.
Riigikaitse teine oluline alustala on NATO. Vaatamata oma vaieldamatule sõjalisele võimekusele ei anna ka NATO täielikku turvatunnet. Probleem on selles, et NATO tegutsemine põhineb suveräänsete riikide otsustel. Otsus Eestile sõjaliselt appi tulla langetatakse valitsuste poolt, kes on vastutavad ainult oma valijate ees. Balti riikide kaitsmine on kulukas ning kasu sellest on väike -- Baltikum moodustab vaid tühise osa "lääne" territooriumist ning rahvastikust. Nii jääb alati küsitavaks, kas NATO (s.t. liikmesriikide valijad) on valmis astuma suurde sõtta Euroopa mõistes marginaalse piirkonna nimel. Mõned küsitlused näitavad, et paljudes riikides nad selleks valmis ei ole.
EL kui (mõningane) julgeolekutagatis ei ole uus mõte. Siin on probleemiks EL peaaegu olematu sõjaline dimensioon. Samas ei oska ma pikemas perspektiivis peale EL ette kujutada ühtegi teist tõelist Balti riikide julgeoleku garantiid.
Kuidas võiks EL tagada meie julgeoleku? See saaks toimuda ainult läbi liidu sõjalise võimekuse ning integratsiooniastme olulise kasvu. Esiteks peaks tekkima tugev võitlusvõimeline euroarmee, mille baasid asuksid nii Balti maades kui ka mujal Euroopas, ning kus teeniksid eesti-läti-leedu poisid koos teiste EL riikide kodanikega. Sellisel armeel peaks olema keskne juhtimine mis alluks ainult Euroopa Liidule, mitte rahvuslikele valitsustele. Niisugusel juhul langeks ära (vähemalt väheneks oluliselt) võimalus, et "keegi ei tule meile appi". Küsimus oleks hoopis, et kas "Euroopa armee tahab hoiab Baltikumi". Minu meelest on see hoopis teistmoodi küsimus -- aga ainult siis, kui euroarmee ei põhine rahvuslikel maakaitseüksustel.
Kas niisugune mõte on puhas utoopia? Praegu küll. Pikemas perspektiivis pean seda aga võimalikuks. Samas ei näe ma ka kaugemas tulevikus lahendust ei väikeriigi nõrkusele ega NATO otsustusmehhanismidele.
Kuidas peaksid Balti riigid praegu sellele hüpoteetilisele võimalusele panustama? Läbi tihedama integratsiooni EL (ja ka trans-atlantiliste) struktuuridega. Isegi kui Euroarmee mõte iialgi ei realiseeru, on tihedamast integratsioonist kaitsevõimele ikkagi abi. Esiteks, see aitab meie sõjaväelastel ning poliitikutel pääseda ligi olulisele informatsioonile, ja teiseks -- see suurendab teiste riikide kodanike soovi vajadusel meile appi tulla. Seega peaks Eesti üldiselt toetama EL edasist integratsiooni soosivaid ideid. Tõsi, praegu ei asenda integratsioon iseseisvat kaitsevõimet.
EL ja NATO nõupidamistel, kohtumistel ning paraku ka sõdades tuleb rohkem osaleda. Ka Afganistanis kaitsevad meie poisid Eestit -- mitte ainult läbi turvalisema maailma loomise, vaid ka läbi selle, et me saame rohkem "omadeks", rohkem iseenesestmõistetavaks osaks läänemaailmast, kelle vastast rünnakut tajutakse rünnakuna "meie" vastu. Teiseks on vaja rohkem isiklikke sidemeid teiste EL riikide (ning USA) inimestega. Käige Euroopas tööl ja õppimas ning kutsuge teiste riikide kodanikke siia tööle! Ka see aitab neil tajuda Eestit ühe osana nende maailmast. Kolmandaks peaks eestlased (ja ka teised Ida-Eurooplased) olema rohkem kursis Euroopa meediaga. On vaja "integreeruda Euroopa infoväljaga" kui soovite. See aitaks ka neil, kes EL kohtumistel ei osale, aru saada, mida mõtlevad inimesed, kes meile sõja korral appi peavad tulema. Ning lõpuks, ei tohiks rõhutada meie erinevust "vanast Euroopast". Erinevused on ning jäävad, aga nende esile toomine ei aita tekitada vajalikku ühtsustunnet.