European Institute

Despite the sovereign debt woes of some countries in the eurozone, the euro currency itself has stood up strongly (surprising so to many) in currency markets, particularly against the dollar. That rate has changed in recent weeks, in favor of the dollar: the euro has now depreciated by nearly 10 percent against the dollar. The falling euro's international value could make European exports more competitive globally, particularly those of Germany and Italy. The euro has been "devalued" slightly in currency markets as (1) the U.S. economy has shown signs of revival and as (2) the European Central Bank's policy of maintaining very low interest rates under the bank's new head, Mario Draghi.  If it lasts for six months, a euro "devaluation" of this sort could add a point economic growth in some eurozone countries (and also make existing loans a little cheaper to pay off), analysts say. That, in turn, could spare the EU as a whole from sinking back into recession and facilitate the reform process in troubled eurozone economies such as convalescent Italy.

In the era which restored Europe whole and free, Vaclav Havel bears comparison with Nelson Mandela as a leader whose stature was crucial in obtaining a worthy place for his liberated nation.  "His role brought Czechoslovaka into NATO and into the EU much faster than world otherwise have been the case," Czech Deputy Foreign Minister Jiri Schneider said in his tribute to the Czech playwright and president who died this weekend. The comparison is only a loose approximation, with some caveats. The towering resistance figure, of course, is Poland's Lech Walesa, not only in his own country but across eastern and central Europe. A difference between the two hereos is that Havel remained a powerful international voice in the ensuing decade. read more...

Croatia's leaders signed an EU accession treaty on December 9, putting the country on course for a referendum next year and then full membership in July 2013. Marking the EU’s expansion into the Balkans, the step (after seven years of negotiations) was hailed by European Council President Herman Van Rompuy: “Croatia is a pioneer, demonstrating in a tangible way that the future of the western Balkans as a whole lies in the European Union.” Marking the event, “European Affairs” put three questions to Vice Skracic, Chargé d'Affaires in the Croatian embassy in Washington. read more...

The outcome of the Brussels summit on December 8th and 9th is a disaster for the UK and also threatens the integrity of the single market, says a well-reported article by Charles Grant, head of the Centre for European Reform, a European-minded but independent think-tank in London. read more...

The most significant result so far in the crucial euro summit has been British Prime Minister David Cameron’s decision to opt out of a proposed agreement on national budgets that would have involved some forfeit of national sovereignty. The plan is aimed at restoring future credibility to the euro and, although Britain never adopted the euro and is therefore not in the eurozone, the proposal was desigend to cover all EU member states. read more...

The fate of the euro and all it implies seems to be at stake in the EU leaders' summit meeting opening Friday. A successful meeting -- meaning one that advances the agenda to create supranational oversight of member states’ budgets -- will keep alive prospects for a reversal of recent market trends and a revival of credibility for the euro.

The neuralgic international dispute on emission fees for airlines has finally jumped to the top of the “transatlantic” in-boxes in Washington and Brussels. The issue has been venomously deadlocked for months, as described in a recent article in European Affairs (which sparked feedback, public and private, from both industry and regulatory circles). But the long-simmering dispute is now approaching a January 1 deadline – trigger date for the EU to start its program on airliners for their carbon emissions over their entire flights anywhere in the world if they use an EU airport.

More governments are authorizing their merchant ships to carry weapons for self-defense as Somalia-based pirates step up the tempo and reach of their operations pillaging international shipping across an ever-widening arc from the Gulf of Aden deep into the Indian Ocean.

UPDATE (11/21):

Spain's election Sunday gave Spanish conservatives their biggest election victory in the country's post-Franco democracy.  The center-right Popular Party, led by incoming prime minister Mariano Rajoy, 56, will have an absolute majority in the lower house allowing it to pass laws without the support of other parties. Rajoy campaigned on a pledge of tough austerity measures that he now promises to carry out -- in effect, rallying to the main thrust of the economic reform program that his party publicly rejected while it was in opposition.