The European Union has devoted great attention to climate change over the last decades in one of the most recondite areas of the world – the Arctic region. The Arctic region is divided between 8 nations, is home to 4 million people, and is an area where climate change is felt at a greater level.

The debates at the European Parliament have shown there is a certain level of dissensus on what this EU policy in the Arctic should be, how it should be designed, and it is also a good point of departure for the analysis of European integration theories.

European integration theories and Arctic policy

The scientific literature on European integration theories mostly dates back to post-war times and is dominated by a small number of theoretical approaches and schools of thought.  When analyzing the success of the first years of European integration after the European Coal and Steel Community and the European Economic Community, many authors started analyzing the reasons for these very first steps of European integration.

Ernst Haas (1921-1986), former professor at the University of Berkeley, Leon Lindberg (1932-), professor emeritus of political science, and cultural theorist Denis de Rougemont (1906-1985) are considered to be the first and most important theorists, who formed the first school of European integration theory, neofunctionalism. Neofunctionalist theory states that supranational institutions, at first the High Authority and then the European Commission, were the ones responsible for the growth of European integration by acting as consensus makers amidst the interests of individual states.

The European Commission, established in 1958, became an institution dedicated to the development of consensus in difficult policy areas, thus building legitimacy and precedence for more policy areas to fall under a supranational type of decision-making in the European context.

Rather than offering sweeping theories, contemporary critics focus on specific cases, where various supranational, national and civil society actors can at times have great political influence in legislative outcome.

The neofunctionalist school was dominant in explaining how European integration worked until the late 1960s. However, growing academic criticism started to appear that began by attacking some of the principles of neofunctionalism, which, in their view, did not properly consider the role and effort of the individual nation states and their economic and political interests.

This opposing school was later named intergovernmentalism and its most important scholars were Harvard political scientist Stanley Hoffmann (1928-2015), Princeton university professor of politics Andrew Moravcsik (1957-), and economic historian Alan Milward (1935-2010).

Their view was that the individual interest of states was the main drive behind European integration and not the political influence of the European Commission. It was the political and economic interest of the leading European states that guided its governments to a consensus-push.

Without going into too much detail, more contemporary mixed theories, such as constructivism, distributive bargaining theory, and rational-choice theory have tried to use the positive aspects of both the neofunctionalists and the intergovernmentalists to develop analysis focusing on states together with supranational institutions. The growth of the powers of the European Parliament (EP) after the 1970s and particularly after the Treaty of Maastricht of 1992 also led to a growth in theoretical literature with the intergovernmentalist perceptions starting to come under scrutiny.

Rather than offering sweeping theories, contemporary critics focus on specific cases, where various supranational, national and civil society actors can at times have great political influence in legislative outcome.

The distinct aspects of Arctic policy

The specific political and societal situation in the Arctic region is interesting if one is to debate it considering the various European integration theories.

Due to its economic, geographical, and scientific importance, the Arctic region has many interested states, institutions and attentive civil society organizations. The Arctic region currently envelops parts of Russia, the United States, Finland, Sweden, Norway, Iceland, Greenland (Kingdom of Denmark), and Canada. Only Finland, Sweden and Denmark are EU members, although Norway and Iceland belong to the European Economic Area (EEA), which puts them into the European integration framework.

These 8 countries have a seat in the most important intergovernmental forum in the Arctic: the Arctic Council, created after the 1996 Ottawa Declaration. Thirteen other countries around the world have an observer state position, and numerous other civil society organizations also participate in other ways. The European Union does not have an observer status as its request was rejected by Canada in 2013.

The EU has had an active interest in the Arctic region as a dimension of environmental policy, indigenous rights, and, to some extent, security policies.

The EU is nevertheless a great economic supporter of Arctic cooperation and Arctic policy, in all its complexity. However, many decisions regarding the Arctic are made through intergovernmental practices, which often generate dissensus between states, such as in the case of Norway and the EU regarding fisheries, which would give credence to the intergovernmentalist school.

Additionally, the EU has had an active interest in the Arctic region as a dimension of environmental policy, indigenous rights, and, to some extent, security policies.

Being one of the original 15 measures to be decided under equal codecision, EU environmental policy is formulated between the EP, the European Commission (EC) and the Council of the EU. In other words, in important policy areas, the deliberative bodies of the EU deliberate within themselves, but also together with other decision-making institutions of the EU. Indeed, the EP has devoted much of its attention to environmental policy throughout all of its legislatures.

From the perspective of rational choice theory or distributive bargaining theory, national or supranational institutions do try to gain as much political leverage as they can with the intent to influence the outcome of legislation to the highest extent possible. However, the EP debates have also shown great political cleavages both on left-right spectrum but also on environmental or national economic predispositions.

The European Parliament and Arctic Policy

Parliamentary decision-making procedure and debates between very different parties are an essential part of the EP’s functions. The EP has frequently sought to develop fast consensus under the ordinary legislative procedure. Studies have shown that, statistically speaking, legislation has been most likely completed through codecision between the three EU legislative institutions after 2009 in the most rapid manner, in parliamentary terms, on the “first reading”.

However, despite the extensive use of codecision, the EP has not reached political unity when it comes to its Arctic policy. Based on the parliamentary debates, it seems that different EU parties have had somewhat different opinions on how to develop a more effective supranational and EU-wide Arctic policy.

The frequency of the debates dealing with Arctic policy has also grown throughout the EP legislatures. Some of the main issues have related to the EU’s position towards the Arctic Council versus the desire for other parallel strategies to make the EU an even more important actor in the region without an involvement in or with the Arctic Council.

The integrity and uniformity of EU policy towards this region is difficult when there are so many interests at stake – whether party interests, national interests, EU institutions’ interests, economic, environmental, defense-related – and when opinions are so varied even between and amidst EU institutions and member states.

Debates were also frequently related to policy priorities, perhaps less surprisingly, showing the friction between environmental and economic policy interests. The pursuit of a supranational policy towards the Arctic versus an intergovernmental approach still seems to generate dissent as well.

The integrity and uniformity of EU policy towards this region is difficult when there are so many interests at stake – whether party interests, national interests, EU institutions’ interests, economic, environmental, defense-related – and when opinions are so varied even between and amidst EU institutions and member states.

By analyzing EP debates, one can see that although there are tendencies that seem to depict party-level inclinations and left-right cleavages, the relative uncertainty of this problematic region makes MEPs have a varied approach.

Nevertheless, the EP has offered numerous resolutions in 2008, 2011, 2014 and 2017. The EP has pushed for a proximity with the Antarctic policy, but later dropped it. It has also argued for a jointly coordinated EU policy and strategy in 2014 and 2017, calling for a ban on heavy fuel oil use.

The EP has, notwithstanding its own divisions, been a strong supporter for a Europeanization, or, in other words, a supranationalization of political decision-making regarding the EU’s Arctic policy. This approach favors inter-institutional agreements despite intergovernmental friction in specific issues, such as with Norway or Canada when dealing with fisheries or energy extraction.

The global impact of this region makes it an important policy issue even for southern European countries.

It is the struggle between various political interests designed at the state-level, but also at the supranational level that makes the EU’s Arctic policy a very interesting issue to be analyzed under European integration theories.

The global impact of this region makes it an important policy issue even for southern European countries. France, Italy, and Germany also favor a supranational approach to the Arctic, while Nordic EU countries seem quite interested in economic possibilities with environmentally safe methods.

This phenomenon is perhaps due to a state of relative defensiveness towards this area by Arctic Council states, particularly by Denmark, while other Nordic EU countries with high expertise in energy extraction by environmental methods show a bit more support for a EU role in the Arctic.

Is intergovernmentalism still king in the Arctic Policy?

Intergovernmentalism and its methodology seem to be a very important point of analysis for the EU’s Artic policy. The EU’s supranational interests and legislative advancements have greatly evolved in recent years, but they seem to be frequently confronted with older partners in Artic affairs.

Unlike other common policies in the European Union such as the Common agricultural policy that has had 60 years of evolution and consensus-building, the EU’s Arctic policy is still a bit far from being a common policy due to international legal constraints and divergent states’ interests such as with the United States, the Russian Federation or even Canada or Norway.

Individual states still seem to have the upper hand when dealing with Arctic policy whereas EU institutions still seem to suffer from internal dissensus and path-dependency.

Individual states still seem to have the upper hand when dealing with Arctic policy whereas EU institutions still seem to suffer from internal dissensus and path-dependency which seem to give more credence to the intergovernmental school of European integration theory and to a general preference for an intergovernmental style of politics.

With time, and perhaps with the search for greater consensus, the EU’s Arctic policy can maybe develop itself into a true common policy having the EU become an equal and perhaps greatly influential partner in the Arctic region.

Luís Sargento Freitas received his doctorate from the University of Jyväskylä in Finland in 2018 and is presently developing other research.

Julkaisu The parliamentarization of the European Union’s Arctic policy ilmestyi ensimmäisenä Politiikasta.

This article provides an overview of the recent political developments in Portugal in the context of the Eurozone crisis. Different Portuguese governments have reacted to this crisis differently: The governments under analysis will be the Sócrates I and II governments (center-left), the following center right government of PSD (Partido Social Democrata) and CDS-PP (Centro Democrático e Social – Partido Popular) under international supervision which subsequently led to the “contraption government” of the Socialist Party (PS), with parliamentary support of the radical left. This “contraption government”, although with some short-lived disagreements with the far left, is presently in its second legislature but the appearance of a new far-right party in the Portuguese parliament seem to indicate a greater political polarization.

The concept of “crisis” is one of great economic, political and philosophical importance, as it is usually associated with a shift between models, whether it be an epistemological shift, a shift of economic paradigms (higher or less state/supranational intervention), or a shift of political regime (whether it be democratic or authoritarian). Crisis, in short, signals a challenge, perhaps an end, to an existing order, and opens room for a new one.

My focus will be on the definition of crisis in the context of the Eurozone crisis in Portugal.

The concept of crisis is, in its essence, a contested concept. It is difficult to ascertain to what extent a crisis is socially constructed, and to which extent it is empirically verifiable.

For the purposes of this article, my focus will be on the definition of crisis in the context of the Eurozone crisis in Portugal. The very concept of crisis and its causes can be analyzed through the Sócrates I and II cabinets (prime minister José Sócrates: pre-crisis and the request for financial intervention; 2005-2011) the Passos Coelho government (prime minister Pedro Passos Coelho: beginning and middle of the crisis, and the first signs of recovery 2011-2015), and the following PS “contraption government” (prime minister António Costa: center left supported by the extreme and far left, 2015-2019, and until today despite present occasional parliamentary frictions).

The Portuguese case is an interesting example as it was one of the four countries that required supranational financial assistance together with Ireland, Greece, and Cyprus and was able to restructure itself (both politically and economically) in order to survive the Eurozone crisis under relatively stable political governments and a rhetoric of non-defiance towards supranational requirements (similarly to Ireland and contrary to Greece).

Such an approach would demand an analysis of both supranational flaws and of national flaws. These arguments were used on all three governments.

Political differences in the understanding of the nature of the crisis in Portugal

José Sócrates was adamant in his rhetoric that the Portuguese state and government would have been able to circumvent the Eurozone crisis and his PEC (Pacto de Estabilidade e Crescimento – Stability and Growth Pact) programs I, II, and III were the instruments to achieve this goal. Therefore, according to him, the crisis was under control or at least manageable at the time.

However, due to the failure of the PEC IV to pass in parliament (Sócrates’ Socialist Party was a minority government), this controllable economic crisis transformed into a political and economic crisis demanding a supranational financial intervention. One could argue that in this case a political crisis was the catalyst of an economic crisis.

However, this stance was (and still is) highly criticized by the center-right opposition. The alternative explanation of the main leaders of the Portuguese center-right was that the policy choices made by the Sócrates governments were themselves the catalysts of this crisis, such as the frequent use of public-private partnerships (PPP’s), high public debt and uncontrolled deficits, and the alleged corruption in the midst of the Sócrates government (with cases such as Freeport, Portugal Telecom, and Espírito Santo Bank).

In this case a political crisis was the catalyst of an economic crisis.

With the subsequent Passos Coelho government (a coalition of two center-right parties: PSD and CDS-PP), the focus and the rhetoric were put on the former PS government’s great responsibility for allowing the crisis to worsen. To counter the crisis the Passos government would be “going beyond the troika” (“troika” refers to the three institutions responsible for the application of the financial assistance package: the European Commission, the European Central Bank, and the International Monetary Fund) – in other words, engaging in austerity politics beyond what the troika had demanded.

The Passos Coelho government used the oversight of the troika as an opportunity to try to partially remove what they saw as state interference in the economy, focusing instead on export growth, reforming justice in order to accelerate court decisions, attracting foreign investment and tourism, and changing labor laws facilitating hiring and firing. In this government’s rhetoric, the economic crisis was a direct consequence of the policies of the Sócrates government. The failures of the PEC program had led to both an economic and political crisis.

The Passos Coelho centre-right (pro-troika) government faced a relatively weakened opposition. The centre-left and the radical-left did not have much common ground apart from their opposition against the austerity policies implemented by the Passos Coelho government. The Socialist Party was still weakened by having lost the 2011 elections but kept on protesting that it was unnecessary to commit to austerity policies beyond what the troika had demanded.

Reorientation of the government: left-right-left

Around September 2014, the parliamentary leader of PS, António José Seguro (who had replaced José Sócrates), was repeatedly attacked from within his own party. This led to internal elections inside PS between António José Seguro and a newcomer, António Costa. Costa won and would soon lead the party into the next parliamentary elections in October 2015.

The October 2015 elections at first seemed to have indicated another victory of the centre-right (PSD and CDS-PP) but António Costa managed to reverse the outcome by uniting the centre-left and the radical left that had been politically separated for decades.

The ramifications of the economic crisis and austerity politics of the Coelho government enabled the so-called geringonça (contraption), which allowed the center-left and the radical left to form a new type of government: a government ran solely by the Socialist Party (PS) as a minority government, but with the parliamentary support of the Portuguese Communist Party, the Green party Os Verdes, and the Left Block.

The ramifications of the economic crisis and austerity politics of the Coelho government enabled the so-called geringonça (contraption), which allowed the center-left and the radical left to form a new type of government.

The concept of crisis had evolved from the Eurozone crisis into a crisis of austerity (amplified by external troika oversight) politics, which created the necessary conditions for a new political constellation that united the entirety of the Portuguese left. This is a notable political turn, as the different factions of the Portuguese left had been in odds with one another almost since the beginning of the Portuguese democracy in 1974.

Changes in the Portuguese right

The four years of the “contraption” government from 2015 to 2019 pushed a rhetoric of improving public sector wages mixed with various types of budgetary captivations. Despite its unorthodox composition, the “contraption” government won in 2019 to continue for another term. The PS is currently in government, despite minor frictions with its left-wing partners in parliament.

Unable to overthrow the “contraption” system, the Portuguese right became segmented, which led to the creation of new right-wing parties. For example, the market-liberal (Hayekian) party Iniciativa Liberal (Liberal Initiative) gained its first member of parliament.

Unable to overthrow the “contraption” system, the Portuguese right became segmented, which led to the creation of new right-wing parties.

Perhaps more interestingly, the 2019 elections saw the rise of the first far-right populist party in Portugal during the democratic era: the Chega! (Enough!) Party. Although the party gained only a single representative in parliament, current polling predicts considerable potential for growth in popularity.

In Finland, the party best comparable with Chega! is the Finns Party. While the Finns Party have had parliamentary representation since 1999, Chega! gained a representative in parliament only after the 2019 elections. Given its autocratic past, Portugal had been a country that seemed impervious to far-right rhetoric ever since the end of the dictatorship.

Upcoming presidential elections in January 2021 might illustrate the potential for growth in the new Portuguese right.

An endogenous or an exogenous crisis?

The chain of events and political shifts originating from the Eurozone crisis, therefore, can be seen as a catalyst for numerous changes in Portuguese politics.

From this point of view and after analyzing the perspectives from several governments, one can make a division between the concepts of endogenous crisis (crisis from within) and exogenous crisis (crisis from the outside) that are useful for the analysis of the Eurozone crisis and also for the understanding of the rhetoric used by different governments. The crisis in Portugal, despite the important exogenous factors, is in its essence an endogenous crisis due to the economic mistakes taken ever since the entrance into the Eurozone and its public debt and deficit misevaluations.

It is not at all uncommon for governments to blame their predecessors, especially if they represent the other end of the political spectrum, but a constant swing of the pendulum between left and right can create problems of political stability.

The crisis in Portugal, despite the important exogenous factors, is in its essence an endogenous crisis due to the economic mistakes taken ever since the entrance into the Eurozone and its public debt and deficit misevaluations.

The Portuguese case allows us to study the dimensions and the frontiers between political crisis and economic crisis and the rhetoric of governments in the understanding of these phenomena. A more macro approach could perhaps deal with all parties in parliament in order to get a broader understanding of how party rhetoric evolves with each swing of the pendulum.

Each political direction taken by each specific government seemed to have had a catalyst effect on the opposite political spectrum making Portuguese politics after 2011 a relatively fluctuating and perhaps volatile development. Political spectrums in Portugal seem to follow an international tendency of radicalization and further polarization of speeches and parliamentary rhetoric. This aspect makes Portuguese politics an interesting point of departure for the study of political and economic crises, and the very operationalization or the conceptualization of crisis.

Luís Sargento Freitas finished his Ph.D. in Political Science at the University of Jyväskylä in 2018 and is in presently developing other research.

Julkaisu The Eurozone crisis and its implications in present Portuguese politics ilmestyi ensimmäisenä Politiikasta.

This article offers a brief literature review of the Marshall Plan (1948-1951), analyzes its problematics, comprehends the problems of the time, evaluates its role in driving faster economic growth in post-World War II Europe, and consequently assesses its importance for the present day and the present Corona crisis. What lessons can the Marshall Plan teach us today?

The Marshall Plan as post-war policy

The 1930s were marked by instability with periods of both anemic economic growth and even decline, greater animosity between European powers, and the rise of fascism. According to Milton Friedman, this economic decline was mostly due to the mistakes of the United States’ Federal Reserve Bank. While war-time economics have stimulating potential, the enormous destruction of World War II left many European economies in ruins.

The Marshall Plan was pursued after World War II as economic aid, but it also included a necessary economic policy reform that European nations had been reluctant to adopt.

What lessons can the Marshall Plan teach us today?

The role of the Marshall Plan has been a topic of great importance for economists and political scientists as its nature had been usually understood as a straight-forward financial aid for a war-devastated Europe. The generally stable growth that followed in Western Europe in the 30 years after World War II has generally been credited to both the Marshall Plan and the Social-Democratic and Christian Democrat governments and the policies that ensued. However, this interpretation may be too simplistic.

The Marshall Plan: what, when, who and why?

The Marshall Plan’s name was derived from the soldier, statesman, and Nobel Prize winner George Marshall (1880-1959). In its entirety, the Plan encompassed 13 billion dollars (at 1948 values) in economic aid and was directed to European countries that had closer ties with the United States and were more politically open to free markets and trade.

Many of these nations also shared relatively strong anti-communist sentiments, despite also being highly protectionist at the time (as was the case of France). The anti-communist policy agenda behind the Marshall Plan was also meant to limit the influence of the Soviet Union and Communist parties in Western Europe. Aid was given to Western Germany (1448 million dollars), UK (3297 million dollars), France (2296 million dollars), Belgium, the Netherlands, Luxembourg, and 10 other nations, with varying emphasis.

The Marshall Plan was pursued after World War II as economic aid, but it also included a necessary economic policy reform that European nations had been reluctant to adopt.

Consequently, the USSR blocked this aid to most of Eastern Europe and would later develop the Molotov plan which was to be applied in Central and Eastern European nations such as Poland, Czechoslovakia, Hungary, Romania, and Bulgaria.

Diverging roads to economic recovery in Europe

One of the most important and cited academics who studied the Marshall Plan was Professor Alan Milward. According to Milward, the economic recovery in Western Europe could have happened with or without the Marshall Plan, although perhaps it wouldn’t have been as fast. It would have eventually taken a slightly longer period of time for such growth to be seen.

Milward states that an important factor that initiated the growth of Western and Central Europe was West Germany’s intent on increasing its productivity, facilitating or liberalizing both imports and exports with low tariffs, thus helping expert manufacturers in neighboring countries. This also provided the opportunity to replace American export products as considerable demand for West German industry production was increasingly sought in Europe.

British protectionism at the wake of the economic troubles at the time and the UK’s close political partnership with the USA was another reason for West Germany to search for intra-European trade (eventually leading to the Treaty of Rome, the initial treaty that created the European Economic Community and would later lead to the European Union). Milward contends that West Germany would have followed these policies whether it would have received aid under the Marshall Plan or not.

Professor Frances Lynch contends that while the United Kingdom was one of the military and political winners of the Second World War, it wasn’t able to use that victory for greater economic resurgence as compared to its Western European partners – despite the aid of the Marshall Plan. The military victories of the war were followed by only modest, short-term economic ones during peacetime, to the point of them nearly being insignificant.

While the United Kingdom was one of the military and political winners of the Second World War, it wasn’t able to use that victory for greater economic resurgence as compared to its Western European partners – despite the aid of the Marshall Plan.

British interests were mostly centered on its special partnership with the United States, the ability to create a nuclear arsenal, to make its capital a financial center in Europe – and elsewhere – despite maintaining some protectionist policies at home. These economic policies aimed to continue its world influence in the context of decolonization. This meant strengthening trading routes and commerce and developing its own version of an international tariff system, all the while trying to expand and maintain the reach and scope of its armed forces.

The “one-world policy”, as it was named, was viewed as Britain’s attempt to keep a dominant role, a leading character in the relations with the USA and the Soviet Union and with Western Europe. Most of these objectives were largely unaccomplished within a few years as the Western European economies would start to outgrow the UK and a bipolar world of the Cold War would come to dominate the world stage.

The Marshall Plan as a political tool for reform

Bradford De Long and Barry Eichengreen have a slightly different interpretation from Milward’s, as they stated that the Marshall Plan did play an important role in Western Europe’s recovery, but more for its political influence and not as much in its financial aid role. They state that these economies would little by little start to expand and eliminate trade barriers between its members, prioritizing free markets, less regulation, and balanced budgets, among other macro-economic measures.

In the United States’ point of view of the time, the relatively open market that served as the basis for its economic growth was to be replicated in Western Europe after World War II. However, following the economic crash of 1929, European economies were not that open for economic change – certainly not in the direction of free markets. The Marshall Plan sought for a return of these goals to European economic policy: in 1948, for example, a parcel of the Marshall Plan funding had been given to France with a demand for the French government to balance its budget and deregulate its economy.

The Marshall Plan did play an important role in Western Europe’s recovery, but more for its political influence and not as much in its financial aid role.

Indeed, according to Long and Eichengreen, about 83% of Marshall aid was used on imports of various products, industrial commodities, and agricultural products. This would also greatly benefit the largest producer of manufactured goods for Western Europe at the time: the United States. Only about 17% was used for machinery, transports or others. The Marshall Plan would thus provide more money for necessary and largely freer imports and greater intra-European trade and the injection of necessary capital movement.

The Marshall Plan: the foundation for a common European economy?

While France was focused on a primarily European community as its economic foundation, (aside from its colonial holdings) without the Marshall Plan, the French road to economic recovery might have been very different. The Marshall Plan was, therefore, not only an important economic aid but it was also a political device for reform in Western Europe. It presented a facilitated solution for the countries’ treasuries as a structural reform plan, rather than simple aid.

The Marshall Plan was also strongly tied with the Bretton Woods system as another important global monetary and financial transformation. The Marshall Plan was, therefore, a facilitator for economic growth but not an initiator: it represented only 3% of the national incomes of the states that received it. Social programs were at the time struggling for more revenues at the same time as inflationary policies and budget deficits were still a risk.

Aid is important but reform is much more significant.

Therefore, although the United States’ direct economic role in the European recovery is still debatable, as Milward and other authors have shown, the Marshall Plan should be understood in a context where the United States were ensuring the political and military safety and stability in Western Europe, without which many of these advancements would perhaps not have been possible.

Consequently, the execution of American foreign policy (whether politically or economically) can indeed be considered as having a predominantly positive effect on the evolution of later European integration.

Lessons from the Marshall Plan for the COVID-19 pandemic

The financial aid provided by the Marshall Plan was more important due to its economically reformative stance, rather than due to its purely material financial scope. The reformative stance of the Marshall Plan facilitated expanding free markets and increasing productivity for European – particularly West-German – imports and exports. This can be seen to have fed into the forces that also led to the creation of the European Economic Community (and later the European Union).

Despite the differences between post-war Europe and the present Corona crisis, historical occurrences can be revisited, and old lessons learned anew: The Corona crisis is also a global economic crisis. The Marshall Plan can serve as an example of how a crisis can be fought not only relying on financial or monetary aid but also with an effective push for policy-reform.

Both the lessons of the Marshall Plan and the Euro crisis must serve as important reminders on how to tackle the Corona crisis today.

The fact that the present American presidency is focused on greater protectionism led to European crisis relief efforts this time being handled by primarily the ECB and the European Commission. The ECB has coupled a vast monetary mass plan with low interest rates and controlled inflation, while the Commission has proposed an extra intergovernmental budget (2021-2027).

It consists of approximately €1.8 trillion, in both hand-outs and loans, designed to facilitate the financial recovery of states and companies, all the while grappling with the hard task of assuring medical and health stability of the population (together with states).

The 2008 financial crisis led to great divisions within the EU, high unemployment, and an economic recession. However, low inflation levels in the Eurozone were maintained (despite a much greater monetary mass) and economic recovery was attained for some years. Both the lessons of the Marshall Plan and the Euro crisis must serve as important reminders on how to tackle the Corona crisis today. Aid is important but reform is much more significant.

Luís Sargento Freitas received his doctorate from the University of Jyväskylä in Finland in 2018 and is in the early phases of his post-doctoral project.

Julkaisu The Marshall Plan and its relevance for the present times ilmestyi ensimmäisenä Politiikasta.

Markets in advanced democracies are constantly changing through digitalization and by providing faster and easier access for citizens. All industrialized sectors and services can start facing new forms of competition in an ever-increasing globalized and interconnected world. These changes have originated great debates in economics and politics on the nature and role of oligopolies, monopolies, markets and states.

These new companies challenge natural state oligopolies or heavily regulated markets. Since most of the older companies relied on the safety and demanding regulations on which states allowed them to operate, they can be understood as a specific type of oligopoly. Most of these companies were not public companies but they operated under strict government regulation that had never before been put to the digitalized and globalized market test.

Platform companies

Areas of business that have been considered regulated, organized and relatively stable, such as taxi companies or housing can and have started to face fierce competition from new companies. Some of these new platform companies are already familiar to many, such as Uber, Airbnb, or Foodora. These are companies that deliver services, rather than products.

New companies challenge natural state oligopolies or heavily regulated markets.

These new companies have used certain flaws, over-regulation and the limited size of companies in the existing markets to their advantage being able to export their model to almost every country in the world.

One of the examples of these platform companies is Uber but anyone of these previously referred companies entered a specific market and forced the existing competitors to a complete reevaluation (or even offered an entirely new service). In this article, the case of Uber will be discussed at length.

The digitalization and de-regulation of service markets

A free market interpretation of this topic would give merit to the conclusion that profitable markets are more likely to face new competition as the attractiveness of higher profits draws in more and more companies trying to win a share of the customers.

A new business model can also lead to even more competition through improvised competitors that rely on the micro-flaws of the original model. For example, Taxify/Bolt/Lyft became competitors against both Uber and the traditional taxis and also trying to gain more markets.

Globalization and digitalization thus provided formulations and reformulations of markets that had a tendency for being local or national and usually heavily regulated. The protection and regulation of these former traditional companies was, to some extent, high.

This legislation was originally devised to ensure the security of both providers and users and also to prevent exploitation. A good example of this would be a taxi-license, in use in numerous countries around the world.

By avoiding some of the regulations, by applying attractive pricing, and the use of new hand-held technologies, former oligopolies now faced stiff competition from platform companies. Some areas have become deregulated, but in the case of new business, it would be more accurate to describe it as a failure to regulate against them.

New technologies enable new businesses that can compete in a new way. Local or national taxi companies had infrastructure in place that could only be circumvented through new technological innovations (generally low-cost and mobile internet access).

The strategy of these new companies or services is mostly based on these two factors: attractiveness of prices for the consumer and less bureaucracy.

The strategy of these new companies or services is mostly based on these two factors: attractiveness of prices for the consumer and less bureaucracy. They also rapidly expanded throughout the world being a sort of a substitute for industrial performance. The scalability of their tech and the easiness to set up servers are also other reasons for how and why these companies grew at such a rapid pace.

It is then perhaps possible to assume that digitalization favors competition and a greater access to the internet also allows faster market expansion in certain types of services.

Resistance against change

The shift in existing business models was so intense and involved so many sectors that states were, at times, forced to intervene. Uber, for example, was temporarily shut down in Finland for almost a year. In Portugal, in turn, the state attempted to regulate these services in order for both traditional taxis and ride-sharing platforms to have a more equilibrated operation.

Passenger carrier services in most European countries were rigorously regulated by national-level legislation and national authorities or agencies by different means. Such examples are the assigning of special license plates, specific car colors or stripes and lighting mechanisms on the roof of the vehicle, driver exams, visible identification and licensing of the driver inside the vehicle, taximeters and written information of prices per kilometer. It thus stands to reason that overregulation had overpriced the service, for both customers and drivers.

In other countries such as South Africa, Uber would perhaps have greater difficulty to enter such market as a great number of taxis are driven by individual people without ties to any contractor and already providing low-cost services.

Despite regional variations, the legal and practical adaptability of these new services and their attractiveness for both drivers and customers completely transformed the existing markets. This evolution also shows that overregulation can at times become ineffective if a large number of clients support new platforms.

Overregulation can at times become ineffective if a large number of clients support new platforms.

Uber referred to its services as “ride-sharing” as an initial legal solution, although it presently acts as a standard taxi company. Other carrier companies and even state regulation were forced to adapt but they did not completely stop these platform companies.

Deregulation of the markets, regulation by the state

Uber has been used in academia as an illustrative example of new services being delivered more effectively, with greater customer attractiveness. In research conducted in the US, the potential benefits listed are numerous:  freer schedules for drivers, Uber’s larger scale, faster matching and possible proximity, the over-regulation of traditional taxis, the higher number of Uber drivers, and the fact that Uber is around 38 percent better in capacity utilization.

This margin also explains why Uber quickly faced other competitors that were quick to enter the market, often by competing in price. These platforms can also have green advantages, as it gives users greater choice in terms of transport (e.g. favoring electric cars). The services are also far more transparent for users – with ratings for customers and drivers – that allow for more accountability of service.

The concern of lower wages that these services offer to their entrepreneur-employees appears to not have damaged the attractiveness of these platforms so far.

The concern of lower wages that these services offer to their entrepreneur-employees appears to not have damaged the attractiveness of these platforms so far – ease of use seems to have trumped other concerns. However, reductions in the salaries of Uber drivers (for example in Portugal) have been greatly contested by the drivers and civil society.

It is important to remember that Foodora or Uber do not regard their workers as typical employees under regular job contracts but more as independent contractors which has been another topic of discussion between states, platform companies and employees due to the fears of exploitation.

In the case of Uber, in fact, the fear of exploitation and the fact that Uber drivers did not have to follow most of the regulation as normal taxis, created an incredibly distorted market that quickly grew contentious. States intervened in order to equilibrate the distortions in this market and make all transport types work under fairer rules. The need of governments for such intervention is still an issue of intense debate today mostly between free-marketeers and supporters of continuous state regulation and supervision.

If we look at citizens or government regulators as rational beings and consumers, with an evolutionary intention of gaining profit, politically or financially, and avoiding loss, it is natural to assume that they will naturally consume the assets or adopt measures that best fit their needs.

If we look at citizens or government regulators as rational beings and consumers, with an evolutionary intention of gaining profit, politically or financially, and avoiding loss, it is natural to assume that they will naturally consume the assets or adopt measures that best fit their needs. Being aware of natural tendencies that humans have, both states and platform companies behave and apply procedures or regulation that best fit their ideals (whether to generate profit or for political gain).

Digitalization opens new markets

The fact that states had long considered transport services as relatively balanced systems for many decades signaled a failure in the understanding that competition in this area was generally lacking and the old model was showing signs of decay. Digitalization opened the door for innovation and market transformation.

State regulation had stifled necessary and welcome market innovation in large areas of the economy. The case of Uber is perhaps a sign that greater digitalization will lead to greater competition and the effectiveness of this new competition will change both regulators (legislative power) and the market itself.

Uber and other platform companies thus proved to be great legislative disruptors, in other words, disruptors of the power of states and regulation, subsuming large economic areas around the world. The power of platform companies thus comes from the ability to circumvent regulation, redesign markets, making private enterprise gain the ability to change markets in a seemingly unimportant area that, all of the sudden, became a highly discussed subject in politics, society and academia.

Luckily it seems that given the opportunity, markets frequently adapt and reinvent themselves at the face of state regulation or when facing new crises. Digitalization should, in this context, be understood as an engine of deregulation.

Given the opportunity, markets frequently adapt and reinvent themselves at the face of state regulation or when facing new crises.

As such, a backlash is predictable. The success of private companies can lead to restrictive – regulating – state responses: in addition to the troubles faced by Uber, many cities have restricted or further regulated the activities of Airbnb, for example. This has been due to inflated rental costs for locals as a result, especially in older cities in southern and central Europe. However, state intervention still creates great dissension between advocates and opponents to such measures.

Understanding the emergence of new technology and new forms of business necessarily informs our understanding of existing and future state activity as well, in the context of markets and state oligopolies. This development is also regionally varied, meaning local conditions influence the behavior of the markets and of the state. No doubt economists, political scientists and other academics will follow this closely. This Corona crisis will also prove to be a test on which types of operators will have the ability to adapt more quickly to the demands of life and services with the ever-present risk of pandemics.

Luís Sargento Freitas received his doctorate from the University of Jyväskylä in Finland in 2018 and is presently developing his post-doc project.

Julkaisu Understanding the global economy after Platform companies ilmestyi ensimmäisenä Politiikasta.

Environmentalism is one of the most presently discussed topics. The need for greener practices can be applied to virtually all areas of production. At the same time, economic protectionism is still a vivid topic amongst economics, law, and political science researchers.

This article will then focus on how these two subjects were intertwined and led to curious developments and appropriations in the Common Agricultural Policy that many politicians would prefer to disregard.

Economic protectionism and its diversified uses and practices around the world combined with the understanding of inequalities intrinsic to free trade have been a topic of vivid discussion amongst scholars in the EU and elsewhere.

For example, the history of the EU’s Common Agricultural Policy (CAP) has led to numerous interpretations. Some have focused on the changes made by specific institutions (typically the European Commission or the European Parliament), while other studies preferred to research changes initiated by individual member-states, and even others focused on environmental factors.

These interpretations relate to a great variety of fields, including economics, political science or law, largely due to the CAP’s unique characteristics: the way through which it operates, the scope of its laws, its proximity but also distance to national agricultural policies, the way in which it is presently decided under the EU’s instruments of co-decision, and so on.

The reasoning behind the CAP

The CAP was originally created to ensure that the central European agricultural market was provided with financial advantage and was sufficiently protected by customs levies from outside competition to allow for the strengthening of the Central European agricultural production (it firstly came into force in 1962).

Originally, the CAP served many purposes:

• to revive and protect the Central European agricultural sector by providing food, cereals, and milk to citizens;
• to protect these farmers from foreign competition;
• to supply these farmers with price support and later financial support (direct aid) partly due to the fear of the spread of communism and communist parties;
• to start ending trade barriers between member-states;
• and to establish the CAP as the center of this community’s supranational system agenda as it was its most expensive common policy (it is also the most expensive common policy in the EU today).

This eventually led to high production levels, which were incentivized through price support and later relatively generous financial support. Out of the over 160 billion euros budget of the EU, the CAP budget accounts for roughly a third (59 billion Euros euros as of 2019).

The financial support would come from a communitarian budget that was (and still is) made from contributions of all member-states (presently, in some member-states, the CAP contributions account for
about 50% of families’ farm income). Citizens, despite only having access to a controlled agriculture market, may also feel that they are protected by these practices – a key benefit of protectionism.

The CAP and the EU budget can presently serve to ease the fears of Euroscepticism showing EU citizens that EU producers and its citizens remain protected from outside speculation also aiding national economies and companies in the EU to enlarge with the help of EU funds for development, for education (Erasmus), greening measures, and transport structure growth and free movement of people (Schengen space).

An organized agricultural policy can also be seen as a specific variety of protectionism.

On the other hand, an organized agricultural policy can also be seen as a specific variety of protectionism. For example, in the inter-war period in Europe, France could gain leverage with a relatively restricted commerce with the already suffering Germany in order to hurt the German economy and alleviate the fear of aggression. In other words, protectionism was used as a weapon of diplomacy, as a deterrent against aggression between World War I and World War II.

It is perhaps difficult to completely understand all of the aspects of the EU’s specific type of protectionism. However, the concept of economic protectionism can be understood as the attempt by state officials and governments or even private lobbies to impose any kind of system that may dampen a free(r) market.

The Common Agricultural Policy as a supranational construction

The political and economic solution that emerged out of the end of World War II, the European Coal and Steel Community, later renamed the European Economic Community, asserted that there would be a supranational institution (the High Authority later named the European Commission) that would serve as a referee between national legal disputes in the common trade area.

Certain political areas would be decided between two parts: the European Commission and the member states (the Council of Ministers; the contemporary Council of the European Union). Together with this solution came the need for a somewhat unified planning of the agricultural sector.

Agriculture still employed large sections of the member states’ population in the 1950s and 1960s. The fact that the original member states of the EEC were unbalanced in their agricultural production capacity (France was the biggest producer of foodstuffs while Germany had a more developed industry), and that the coal and steel sectors were already managed under a European supranational system led to the world’s first Common Agricultural Policy.

Not only would foodstuffs be transported relatively freely between EEC member states, a great portion of a country’s agricultural policy would be decided at a supranational level. The creation of the common European budget was also a very important achievement as its funds were, at first, largely directed towards agricultural production.

The European Free Trade Agreement (EFTA) sought to coordinate trade policies further, pushing the EEC to also strive for less restrictions in the European markets. At no stage were these policies interested in a political union: their goals were purely economic.

Protectionism was thus declining, but it existed nevertheless as under the CAP, a great number of central European farmers were financially protected against world competition by price controls or, subsidies, and levies against outside exporters and because other countries that might have wanted to export to these European states would be forced to pay levies.

The development of the CAP

The CAP, however, started to change from the mid-1980s onwards having been relatively well accepted by both member-states and the European Commission. The CAP primarily evolved from a system based on price support or price fixing, then gradually changed to direct aid to farmers, and later with this direct aid being tied with greening measures. Its most pressing commitments throughout the decades can be simplified in the concepts of productivity, competitiveness, and sustainability.

This change started to materialize in the “Green Paper” from the European Commission in 1985, when a greater emphasis on competition was developed. The first green legal acts and direct payments were then put into practice. It is possible to assume that environmental approaches coincided with a greater liberalization of the CAP as these greening advancements could have perhaps served as a way to maintain the political necessity of a protectionist CAP disguised under a greening approach.

The following MacSharry reform of 1992 and the Agenda 2000 continued with this philosophy of further abandoning price controls and a pursuing a path of direct funding for farmers in exchange for greening practices. The Agenda 2000 was perhaps more adamant in its pursuit for further greening practices leading to the adoption of a support for young farmers. It also included and the division of the CAP into two pillars : having rural development being considered as a sui generis division in the designing of the CAP. Tthe first pillar was and still is designed for direct payments to farmers, and the second pillar for rural development i.e. greening measures.

The evermore-foreseeable enlargement of the EU by ten new member states that eventually occurred in 2004 forced the EU institutions to adapt to the biggest enlargement the union had ever experienced. This meant that the CAP would also be affected and the member states would have even more varied agricultural policies.

Making rural development the second pillar of CAP made it gain a status of its own and also made the environmentalization of agricultural policies a necessary policy ideal in itself.

The EU has steadily progressed in this direction. For example, the 2008 Health Check, which is considered by academics as another important stepping stone in the history of the CAP, aimed at simplifying procedures, ending most quotas for agricultural production by 2015 and ending the set-aside system (, where a portion of land would not be harvested for a certain period of time).

Perhaps even more importantly, the Lisbon Treaty of 2009 initiated a relative change in the CAP, giving the European Parliament the ability to intervene in the design of this policy through the legislative process of codecision, where a legal act needs the approval of both the Council of the EU and the European Parliament to come into fruition.

The Lisbon Treaty and the 2014 CAP reform also included increases in its greening amendments and ended some quotas for production. However, considering the scale of the CAP, some researchers have already argued that these changes have been rather unambitious.

The studies of political scientists Emil and Karmen Erjavec are some of the most important and controversial pertaining to the CAP. These two scholars contend that the greening advancements made in the CAP can be interpreted as merely a “fashionable justification” coupled with a predominantly productivist discourse.

Greening policies made in the last decades could thus be understood as a kind of an excuse in order to maintain protectionist elements in this expensive common policy.

Green markets and free markets

Advances in free trade that may have limited the possibilities on protectionism have led EU institutions to use environmental reasoning to maintain protectionist practices within the CAP. While it is true that the CAP now includes sorely needed agri-environmental practices, this has also enabled the continued use of framing incentives as protectionist policy.

One can then postulate that despite the realization of agri-environmental concerns and apt legislation in this matter made at the supranational and national level (which allowed countries such as Lithuania, for example, to start including greening practices more abundantly) the use of the environmental argument was also at least partially misused and served as an excuse to hide some protectionist elements in this common policy.

Environmental concerns are present in legislation around the world, and rightly so, but their rationalization deserves critical scrutiny.

On the one hand, a protectionist and relatively controlled CAP can serve the common good of pushing for further environmental practices.

On the one hand, a protectionist and relatively controlled CAP can serve the common good of pushing for further environmental practices but a different, perhaps more liberal approach, would state that consumers are relatively aware of the need for greening practices and could individually prefer to consume more goods that are practiced under green procedures and not buy other goods that do not conform to environmental standards (assuming this information is provided to them).

It is possible to assume that a concern for the environment might increasingly serve as a validation or excuse for many kinds of policies when environmentalism forms but one part of such proposals. It will then be important to differentiate which policies are designed solely for environmental reasons and which ones are designed with other ideals in mind as well. It is the job of the researcher and of the politician to clearly set the line between them.

Luís Sargento Freitas received his doctorate from the University of Jyväskylä in Finland in 2018 and is presently developing his post-doc project.

Julkaisu Economic protectionism and environmentalism in the CAP ilmestyi ensimmäisenä Politiikasta.

There is not only one type of capitalism, there are several types. Varieties of capitalism (VoC) and its vast literature are defined based on the role and influence of the state in the economy, the type of fiscal policy, the state’s relationship with private sector and the level of market openness, which in turn relate to quotas for imports or exports, quotas or incentives for food production or fisheries, and so on.

In this article the economic and political space of the European Union (EU) is considered a space for a very specific kind of capitalism – protectionist capitalism. Protectionist capitalism or liberal protectionism are a form of economic protectionism.

This type of economic system (including its subtypes and different examples around the world) already existed in the 19th century and in many authoritarian or democratic European and world systems.

To what extent is the EU protectionist then?

It is also readily applied nowadays in the EU although practiced under democratic procedures, respect for human rights and free elections.

I would argue that protectionist capitalism is, in fact, the most popular economic system in the world overall. To what extent is the EU protectionist then?

Most literature prefers to analyze the evolution of the EU, its institutions, and common policies as they developed but not under the realm of the concept of protectionism which is what this article will also do.

The European Union’s protectionist capitalism

On one end of the political and economic spectrum would be communist or Soviet-inspired systems, where all economic sectors are run by state officials. Exports are similarly controlled, as are imports: an extreme case of protectionism. The State automatically gains monopoly positions within multiple sectors or economic areas.

This all too readily serves as a foundation for possible structural corruption and waste.

Another similar case would be authoritarian protectionism as was exemplified by the Estado Novo in Portugal (1933–1974) or Benito Mussolini’s Italy.

These authoritarian systems tended to have severely restricted economic and political freedom, with a small number of companies receiving special treatment by state officials benefiting from systems such as customs taxes against foreign competitors and financial support for national exporters.

In the middle, there are protectionist but democratic systems, being the most prevalent the EU, the United States, Canada, and Japan, among others, with varying degrees of market openness and private competitiveness.

There is a third, theoretical system of pure neoliberalism, where there would be no market barrier imposed by the state or any other public institution or even private lobby, whether it be quotas for imports, subsidies for exports or for production. Hong Kong in the 1980s – despite its status as a crown colony – is given as an example of this by Milton and Rose Friedman.

Free trade has been shrinking from a globalizing trend towards trade blocks.

Free trade has been shrinking from a globalizing trend towards trade blocks even before the presidency of Donald Trump and the subsequent, somewhat protectionist, economic policies. For example, the EU has recently promoted Preferential Trade Agreements (PTAs) to secure common grounds with other nations and not damage its own position at the negotiating table.

However, PTAs appear to be of a limited free trade philosophy and can actually serve as one more system for the EU to progressively gain greater control of the markets with which it makes agreements.

In summary, although the EU has supported free trade in some sectors, it has also acted in a distinctly protectionist way in others.

Common Agricultural Policy (CAP)

The most obvious case of the EU’s protectionism can be found in the Common Agricultural Policy (CAP). It is a system that is presently designed to ensure that farmers in the EU can get supranational financial support and position themselves as the beneficiaries of relatively unfair competitive advantages in terms of global exports and trade made under the guise of a push for greener agriculture.

The need for agricultural support was supported right after the war in order to boost productivity in this severely depleted economic area that still employed large sectors of population in the 1950s. With time, following the “butter mountains” crisis of the 1970s, limits were set for the production of certain agricultural products.

However, the farmer has remained protected because he continued to receive communitarian funds. This path dependency is possibly one of the biggest reasons as for why agri-environmental support is still in place.

Presently, the barriers or quotas for agricultural production in the CAP almost disappeared and one can talk of a more liberal and perhaps greener CAP but the existence of vast agricultural subsidies is possibly the greatest aspect of the EU’s protectionist common policy.

Protectionism in the guise of free trade

Although some market barriers may have been broken and the CAP remains as a visible, even exceptional case within the EU, there are other internal mechanisms to consider that can be seen as protectionist.

Private entrepreneurs and companies in the EU consistently and repeatedly gain from the access to all kinds of EU funds (whether for agriculture, to start a business or for other kinds of development) that are usually financially vastly superior to most countries in the world.

The EU budget is thus one of the greatest instruments in the EU’s political economy to uphold its duty to secure EU markets against multiple world competitors.

Private entrepreneurs and companies in the EU consistently and repeatedly gain from the access to all kinds of EU funds.

These trade deals can be profitable for all participants, but the fact that vast amounts of financial assistance are available for EU companies through EU funds can make these deals as one more system for EU companies to, in the long run, gain access to new markets and possibly be able to overwhelm these markets with their products.

Economic protectionism tends to undermine free competition, to increase consumer prices in order to benefit the facilitator or seller of services or products that is already installed in a particular country and who may not be affected by customs duties or any other similar tax or fee.

Most of these measures are designed at the member-state level (such as import quotas) but, at a larger view, the European single-market appears to be open to itself and to its participants but not as open to the rest of the world.

As a major trading block, the EU supports indirect protectionism from the national to the supranational level.

Another example of economic protectionism taken at the supranational level is the ability of any citizen or company in the EU to file a complaint to EU institutions and accuse a non-EU company of unfair market practices and unfair competition.

This is another case of supranational support made for market protection, as they are typically targeted at non-EU companies (as the legal text clearly states, with China and its companies having great emphasis here).

The specific type of protectionism upheld at the EU level is also a foreign policy mechanism for political and economic integration as countries neighboring the EU would feel tempted to not only be able to participate in the decision-making processes at the EU institutions’ level but also be able to enter a single-market that is much more free to those that are part of that economic union (even if they sometimes do not participate in the decision-making such as the case of Norway).

At the financial and banking level, a certain degree of protectionism is also visible as the recent policies and analysis of the European Central Bank (ECB) seem to show.

The very idea of the banking union, although not completely realized, is one designed to ensure that citizens would not have to be severely affected by the failure of banks but it can also be understood as a policy to ensure the protection and stability of certain banks despite their hypothetical negative outlook.

The free movement of people should also be addressed as an area where protectionism of labor markets may negatively impact the success of the Schengen area.

The positioning of the ECB as a lender of last resort indirectly providing states and the banking system with the ability to acquire capital under easier conditions and setting monetary policy under low interest rates can also serve as a somewhat protectionist policy as it is ensuring the stability of these financial organizations and states, even if some of these (especially states in the Eurozone that no longer have the power to devalue currency) might not have been able to stay solvent at pre-crisis interest rates.

While the focus of this article has been on protectionist economic policy, the free movement of people should also be addressed as an area where protectionism of labor markets may negatively impact the success of the Schengen area. It bears reminding that this system is mostly available only for EU citizens.

Trade policy has always had a tendency for protectionism

The EU and its member-states form a very complicated political and economic union that has established different and characteristic political and economic relationships with various governments around the world. Trade policy has always had a relative tendency for protectionism.

After World War II, a push for free trade agreements occurred that more or less lasted until the end of the century. Recently, a push for protectionism has been visible, however, and despite their free trade policies, in truth, the EU has always been keeping protectionist elements in place in its economic policy and will probably continue to do so in the future.

Luís Sargento Freitas (Ph.D.) finished his Ph.D. at the University of Jyväskylä in Finland in 2018 and is presently developing his post-doctoral project.

Julkaisu The European Union as a specific case of economic protectionism ilmestyi ensimmäisenä Politiikasta.

Expanding a small nation: Europe and beyond

Founded in 1143 and its borders finally established in 1297, Portugal sought to expand, first on the Iberian Peninsula and then in North Africa, an area of great commercial importance for seafaring European powers. Indeed, without room to maneuver on the European political stage, Portugal’s eyes turned further beyond Europe’s borders.

Given the difficulty of establishing a stable foothold in Northern Africa, Portugal turned to the Atlantic Ocean and the western coast of Africa which was relatively unexplored at the time. With the discovery of the maritime route to India through the Cape of Good Hope, and the subsequent discovery of the American continent, Portugal started to build a vast colonial empire. This period, also known as the era of discoveries, mixed growing economic and political power with the practices of slavery and colonialism.

Portugal developed political proximity with Sweden through a friendship and trade treaty by Francisco de Sousa Coutinho in 1641

Portugal’s political situation in Europe was highly reliant on an alliance with England established in 1386 which, despite some occasional frictions, is still in effect today. In the 17^th century, Portugal also developed a closer political proximity with Sweden through a friendship and trade treaty by Francisco de Sousa Coutinho in 1641. This created the first links between Portuguese diplomats and the Government of Sweden, which controlled a portion of what is now Finnish territory.

The first stages of Portuguese-Finnish diplomacy

As Finland became independent during the horrors of World War I, Portugal’s government started planning the beginning of diplomatic relations with the new state. Diplomatic ties were officially established on January 10^th, 1920, when Jorge José Rodrigues dos Santos, the secretary of the Portuguese Legation in Stockholm, went to Helsinki. Following World War I, both Finland and Portugal proved out to be active members at the League of Nations.

Diplomatic ties were officially established on January 10^th 1920.

The growth of fascist movements in Europe in the 1920s and 1930s had an effect on both countries. On the 28^th of May 1926, Portugal turned into a sui generis fascist regime (although there is still great debate on the most apt conceptualization for this regime) followed by a new constitution in 1933.

Finland also experienced strong right-wing nationalism: the Lapua movement and its failed Mäntsälä revolt. The People’s Patriotic Movement (Isänmaallinen Kansanliike) had also gained 14 members of Parliament in the 1933 and 1936 elections, and still 8 in the 1939 elections. However, no fascist-influenced revolution was successful in Finland despite these episodes.

Portugal and Finland in World War II

Unlike Finland, which was engaged in three separate wars during World War II, Portugal was a neutral country with strong commodities’ exchanges and ideological proximity with Hitlerite Germany, but also a distinct political and economic proximity with the United Kingdom and the United States. According to documents on Finnish-Portuguese relations in the national archives of Portugal, Portugal had supported Finnish independence and territorial and political integrity.

Portugal had supported Finnish independence and territorial and political integrity.

Given Portugal’s own political affiliation, the country resisted communist encroachment of Finland by offering assistance. Portugal had already cut diplomatic ties with the Soviet Union in 1918, which would not be reopened until 1974. Numerous meetings occurred between Finnish and Portuguese diplomats as to provide Finland with greater economic means to endure Soviet attacks.

These meetings were conducted by Francisco de Paula Brito Junior (Head of Division for Economic Affairs), Francisco de Castro Caldas (Vice-President of the Corporative Technical Council for Commerce and Industry) and Fernando de Oliveira (Secretary of the Legation) on the Portuguese side. The Finnish side was represented by George Winckelman (Extraordinary Envoy and Minister Plenipotentiary) and Tauno Jalanti (Commercial Director at the Finnish Ministry of Foreign Affairs).

Numerous commodities were either given or sold to Finland during the war which amounted to a total of around 90 million Finnish Marks. The chief trade route was between Petsamo and Lisbon.

The commodities sold or given included paper, sardines, cashew, citric acid, turpentine, sugar, coffee, furs, locks, sporting goods, cork, and port wine.

The commodities sold or given included paper, sardines, cashew, citric acid, turpentine, sugar, coffee, furs, locks, sporting goods, cork, and port wine. Portugal also participated in the acquisition of one of the 12 Finnish ships that were stationed in American ports. Based on records in the Portuguese national archives, this trade activity and diplomatic exchanges continued until the end of the war.

The Cold War period

As World War II ended and the Cold War began, a new historical period also started between Portugal and Finland, one characterized by continued trade but also political dissensus due to the Portuguese colonial presence in Africa.

The Portuguese regime, entitled Estado Novo (New State: 1933–1974), saw the Portuguese presence in Africa as beneficial to Africans and Europeans both, and to African development in general. This opinion was becoming increasingly rare as the processes of decolonization started to gather strength.

The Estado Novo regime would end up having one single African ally: the Apartheid regime in South Africa. In particular the United States was distrustful of Portugal’s continued African presence, as although Portugal had been a stalwart anti-Communist ally, its presence made transitioning African states to democratic and market-based systems difficult. The regime’s position was increasingly isolated and indigenous attacks were numerous mostly in Angola, Mozambique, and in the other Portuguese-speaking territories as well in a never-ending war.

Finnish foreign policy didn’t target the specific areas in Angola and Mozambique where active fighting was occurring, but it was engaged in financial transactions and diplomatic encounters with revolutionary movements and leaders and provided humanitarian aid.

Finland’s lack of previous ties or presence in Africa justified its actions in Angola (with members of the anticolonialist movement MPLA), Mozambique (with representatives of FRELIMO such as Marcelino dos Santos), former Rhodesia (contemporary Zimbabwe, with members of ZANU), South Africa (with the African National Congress), Somalia (with Mr. Nur Elmi), Guinea and Cape Verde (with PAIGC), and Tanzania. They can be understood as an attempt to build diplomatic ties in this continent knowing that the end of colonialism was possibly only a matter of time.

Despite what could be construed as Finnish interventions in Portuguese colonial holdings, there are no records of an official complaint directed to Finnish governments on this matter.

Finland’s civil society, with state support, developed numerous humanitarian expeditions with the intent of improving schools in Mozambique by the offering of shoes, milk powder, blankets, food, and assorted school supplies. Perhaps even more interesting is, however, the actions of individual Finnish politicians.

According to Portuguese national archives, former Minister Ahti Karjalainen was believed to have reserved several thousands of dollars for liberation movements in Africa. Also former Minister of Foreign Affairs Kalevi Sorsa had been repeatedly asked by parties of the Finnish parliament and Finnish civil society to provide more aid for these liberation movements.

Despite what could be construed as Finnish interventions in Portuguese colonial holdings, there are no records of an official complaint directed to Finnish governments on this matter. The documents in Portuguese national archives seem to indicate that this was known to the regime but of secondary importance. The difference between pro-liberation Finland and stubbornly colonial Portugal seems stark in this regard.

The path towards European integration and the Eurozone crisis

The Portuguese revolution of 1974 overthrew its sui generis fascist regime and ended Portuguese colonialism in Africa. As a result, Portuguese foreign policy shifted considerably. Finally letting go of its dreams of an empire, it was now focused on European integration, and in joining the European Economic Community (EEC) in particular.

In order to achieve this objective, Portugal had to be able to sustain a democratic political system and endure two financial assistance programmes from the International Monetary Fund (IMF). Portugal joined the EEC in 1986 together with Spain. Finland joined the EEC, now named the European Union (EU), in 1995 (after a referendum held in 1994), together with Sweden and Austria. Portugal and Finland became active members of an economic, political, and supranational union.

Portugal and Finland became active members of an economic, political, and supranational union.

The Euro crisis created a period of a re-evaluation of this political and monetary union. It brought into critical discussion what the monetary union demanded from the countries that were participants in it, and how some of these states failed to live up to these expectations. The structuring of the Eurozone economy had flaws, but individual states made their own share of mistakes that greatly contributed to the crisis.

However, with the financial assistance packages of the IMF, the European Commission, and the European Central Bank (ECB) towards Greece, Ireland, and Portugal but most importantly with the diversified quantitative easing policies of the ECB a greater disaster was averted and the Eurozone is presently showing signs of recovery.

This crisis led to a dissensus amidst EU countries leading to the hypothetical creation of a North-South political cleavage, which was possibly a catalyst for the growth of far-right parties in Finland (such as the Finns party). Exemplifying the different ways through which the crisis affected domestic politics, far-right parties have failed to emerge in Portugal.

Exemplifying the different ways through which the crisis affected domestic politics, far-right parties have failed to emerge in Portugal.

Instead, the crisis led to the rise of a leftist coalition where the Socialist Party is in government with parliamentary support of the Left Block and the Portuguese Communist Party. Such a coalition would have been virtually impossible before the crisis, as the Socialist Party and the radical left were traditionally, ideologically and politically speaking, incompatible

Greater historical distance will, however, be necessary as to be able to observe possible changes to Portuguese-Finnish relations.

Final remarks

In conclusion, there have been surprising moments when Finnish and Portuguese political histories have intersected. This article has touched upon but a few. The countries have found common cause in anti-communist attitudes in the early 20^th century, but experienced dissensus regarding the end of colonialism in Africa. The end of the colonial era and the political liberation of Portugal in the context of increasing European integration saw Finland and Portugal developing a joint economic partnership through the Eurozone.

The Eurozone crisis, however, affected the countries very differently and influenced their political trajectories. Further research is needed in order to go deeper into the relations between these two nations on the opposite ends of Europe, and how they historically evolved amidst different political conjunctures.

Luís Sargento Freitas received his doctorate from the University of Jyväskylä in 2018 and is presently developing his post-doc project.

Julkaisu Surprising connections in political history: Portugal and Finland ilmestyi ensimmäisenä Politiikasta.

The European Union (EU) is one institution or supranational institution like many others. It originated from the desire to create an ever-lasting peace between the countries of Europe, most importantly France and Germany, leading to the creation of the European Coal and Steel Community of 1951 that evolved into the European Economic Community of 1957 and then to its present state as the European Union.

Today in this political union, the three most important legislative institutions are the European Commission, the Council of the EU and the European Parliament. The European Parliament is a natural research object as it is the one that has gained the most power in the last decades and treaties of the EU, mostly through the power of codecision.

This political union has indeed survived many crises and periods of pressure, such as the financial crisis roughly between the years of 1969 until 1975, the fall of the Berlin wall when Germany was reunited, and was forced to incorporate a large territory into its economy, the euro-crisis of the post-2008 years and most recently the “Brexit” phenomenon.

It is possible to assume that a union that has survived so many crises will be more able to endure future crises, although an opposite contention is also possible which is that the EU of today is not the same union of the Treaty of Rome of 1957 or of the Maastricht treaty of 1991. On the contrary, the EU might have created latent mechanisms in the process, potentially making it permutable to outside influence and rendering it vulnerable to financial crises.

One of the most important achievements of this political union is the Common Agricultural Policy (CAP).

One of the most important achievements of this political union is the Common Agricultural Policy (CAP) as it is one of the largest policies inside another important instrument of federalization, which is the EU budget.

Being aware that the Lisbon Treaty of 2009 was the treaty that put the CAP under the process of codecision, which made the European Parliament have the same powers as the Council of the EU is the basis for any new study of this policy.

The CAP has been greatly debated by all sorts of scholars. Several schools were formed through the decades: the neofunctionalists (with names such as Ernst Haas, Leon Lindberg), the intergovernmentalists (Andrew Moravcsik, Alan Milward, Frances Lynch) and more contemporary scholars that developed methods that join the positive approaches of these two schools in what I prefer to call mixed theories (Catherine Moury, Adrienne Héritier, Claudia Wiesner, Kari Palonen, among many others).

These authors have repeatedly referred to the EP, its history and its role in the CAP. These authors allow us to have a greater insight into the beginnings of European integration, and the first attempts at understanding its success.

One of the most important discoveries was that, as Haas had stated, the empowering of the EP (which was named the Common Assembly at the time) was originally a French idea. This idea was not pushed forward due to great opposition. The EP thus had to wait for about 40 years to have the ability to have amendments pushed in the legislative process. This procedure became known as codecision in the Treaty of Maastricht.

The CAP was originally intended to create a system of price support so that agricultural production would rise as this was necessary in post-war years to revive this economic sector.

Agriculture policies as constant source of debate for many professionals

The European Commission and some economists and politicians (John Maynard Keynes or Franz Fischler) had long stood up for the idea that agriculture is a practice that deserves national and supranational financial support as it is dependent on the climate. Neoliberal authors, such as Milton Friedman or Friedrich August von Hayek, on the other hand, supported the end of agriculture ministries, and agricultural policies that would affect the normal functioning of the market, ending any kind of quotas for production or financial support to farmers.

Neoliberalism would benefit citizens and countries as they would be able to acquire agricultural commodities at the cheapest price through world markets. In a neoliberal method, it would be better for countries to trade according to world prices than having to subsidize farmers. Friedman would be an opponent of the CAP, as would von Hayek.

However, the history of the CAP has shown that, although neoliberalism did play a role in its development, particularly in the change from price control to direct support for farmers in the 1980s, the choice has always been on continuing with the policies of supranational support for farmers and farming.

The history of the CAP is one of constant restructuring of policies that manage the practice and support of agriculture

The history of the CAP is one of constant restructuring of policies that manage the practice and support of agriculture. All of the political discourse of the first years after the Treaty of Rome of 1957 was one where financial support for agricultural practices was necessary and one that was to be gathered through the European budget. This financial aid was centered on price support. Price support is a system by which agricultural commodities would not be lowered below a certain level, giving farmers a stable financial livelihood.

Over the years, this system was adapted to one where price support would diminish and the focus was to be put on direct financial aid to farmers. These direct payments became increasingly connected with greening policies, in other words, the growth of environmentally friendly policies for agricultural production and rural development.

After the Treaty of Rome of 1957, the Mansholt Plan of 1968 was the first attempt at reformulating the CAP, and was based on the training of farmers and modernization. It was not a significant reform due to a lot of opposition from farmers and member states. It was with plans such as this that the concept of path-dependence gains momentum for this study but also for the understanding of European integration.

The Green Paper of the European Commission of 1985 began to change the philosophy of this common policy from one of production to one based on competition.

The MacSharry reform of 1992 pushed for some greening ideas and agrienvironmental policies. The process of the reduction of price support for foodstuffs and its substitution by direct payments was continued as the Uruguay Rounds and the General Agreement on Tariffs and Trade (GATT) pushed for the reduction of the incentives for agriculture, and a liberalization of agricultural markets worldwide.

The Agenda 2000 divided this common policy into two pillars (direct payments as the first pillar and rural development as the second pillar). Young farmers would also receive more financial support. This Agenda 2000 came at the same time as the implementation of the Euro currency and the Euro area thus facilitating the exchange in commodities, the control of inflation, harmonizing exchange rates and monetary policies, and the interest rates of the European Central Bank.

The next step in the history of this common policy was the Fischler Reform of 2003 which is also called the Mid-Term review. In this incisive reform, the most important advancements were the separation of direct payments from production, in other words, decoupling; the separation of agriculture and rural development, the political ideal of sustainability as an orientational concept in policy-design, and the single farm payment that would be made once a year and per hectare. This was a definitive reform but it partially failed as rural development was undercapitalized.

The EP has been changing its political behavior from one based on dissensus and strong opposition particularly in the 90s to one more recently based on consensus-seeking.

The CAP Health Check of 2008 was the next step and it was designed to accommodate the 2004 enlargement of the EU, the biggest one until today encompassing ten new member states. It was designed to end quotas for sugar and milk by 2015 that had been initiated in the 1980s, and the creation of the Single Area Payment Scheme as an introductory system for the countries in this enlargement.

The development that followed was the Lisbon treaty of 2009 and with it, the 2013 CAP reform or, more precisely, 2013 CAP change. This was the first reform of the CAP made with a EP that possessed the same powers as the Council of the EU. It was the Lisbon treaty that gave the European Parliament codecision powers in 40 new areas, including the CAP. This treaty signified the completion of the parliamentarization process that had started in the Maastricht Treaty.

Research in both statistics and speeches has shown that the EP has been changing its political behavior from one based on dissensus and strong opposition particularly in the 90s to one more recently based on consensus-seeking, and micro-level amendments. Has the parliamentary influence then made any difference for the CAP?

Market-driven CAP with or without parliament influence

Despite the growing powers of the EP after the Lisbon Treaty, this institution was not able to materialize a deep reform of this common policy in the 2013 CAP reform. It is possible to assume that powerful vested interests based on the internal and foreign policies of the EU’s member states (particularly Germany, France or maybe even the European Commission) have circumvented the rhetorical abilities of the EP.

The CAP seems to have evolved into a policy that continues to push for greater agrienvironmental reform (greening), forcing farmers to produce under strict measures and accelerated production levels in exchange for EU funds.

It can also be argued to function as a mechanism of foreign policy, one that keeps searching for new markets in the world in which to expand (competing with other powers such as China, Russia or the United States) being able to deliver great quantities of high-quality products at cheaper prices thus creating EU economies greatly based on the capacity to export inside the EU space and later to developing countries that do not have the means to compete but that, on the other hand, gain access to high-quality and cheap EU foodstuffs.

The CAP seems to have evolved into a policy that continues to push for greater agrienvironmental reform (greening), forcing farmers to produce under strict measures and accelerated production levels in exchange for EU funds.

The development of the “Brexit” negotiations is very relevant but it may not be able to change most of these ideals as they appear to be the basis of part of the EU’s strategy and, in a sense, part of its foreign policy.

M.A. Luis Sargento Freitas will defend his doctoral dissertation at University of Jyväskylä on 12.11.2018. 

Julkaisu The parliamentarization of the Common Agricultural Policy and its role as a global actor ilmestyi ensimmäisenä Politiikasta.