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Discord in European Union: Why Should Romania and Bulgaria fight for Schengen

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Earlier this week, European Commission has expressed its continuous support to European Presidency’s efforts of including Bulgaria and Romania into Schengen area. It is a big diplomatic win for Romania, the country which has faced rejection to the entry in the Schengen region several times along with Bulgaria.

In May 2011, The European Parliament’s civil freedoms committee had approved a recommendation for Bulgaria and Romania to joined Schengen free-travel zone. The principal condition for the nations joining the multinational Schengen zone is their ability to ensure the security of the EU’s external borders. In this case Romania, which borders non EU states of Moldova, Ukraine and Serbia; and Bulgaria, which borders non EU states of Turkey, Macedonia and Serbia will own the responsibility of securing their borders not just for themselves but for the whole European Union. When the South East European countries of Romania and Bulgaria were close to achieve their dream, The Netherlands, in the meeting of the EU Council of justice and interior ministers postponed their adhesion to Schengen region for 2012, saying ‘these two countries may enter the Schengen area only after they carry out effective judicial reforms.’

Angela Merkel and Basescu

German Federal Chancellor, Angela Merkel,
and Traian Basescu, President of Romania.
Image by European Council

Time to time Germany, The Netherlands and Finland have played their cards to block or postpone the entry of the two countries. In September 2011, Netherlands and Finland urged the two bidders to do more to fight corruption and organized crime.

This year in March, Germany and the Netherlands again launched a strong protest to prevent Romania and Bulgaria entering into the region saying at this stage it would be premature, due to rampant corruption there. During the meeting of Ministers of Interior and Justice of the European Union, in Brussels, unfortunately for both the countries the decision was again postponed to the end of 2013, when they will be again judged on the eligibility criteria. On this occasion, German interior minister, Hans-Peter Friedrich in Brussels said “There are some areas of weakness, such as in the functionality of the judicial system, that prevents us from saying: abolish the borders,” said Friedrich. He warned Germany might witness an influx of untrustworthy people, migrating there “without further control”.

Schengen area map
Schengen Area, Image by Ssolbergj

 

After all these development and use of power against the two countries, do we think Romania really needs the entry in the Schengen area?

Romanian Foreign Minister, Titus Corlatean said, “We have lived without entry to the Schengen zone for a long time, and we can live without it for a longer time as well.”

To know what Romanians think about their membership of European Union we asked Gabriela Ionita, Editor in Chief, Power&Politics World.

TWR: What do Romanians think about Germany preventing them to enter Schengen Agreement Last Month?

gabriela ionita the world reporter
Gabriela Ionita,
Editor in Chief Power&Politics World

Gabriela Ionita: Romanian people have many other real problems. Discussion about the opposition of some country like Germany, Netherland (official) or France (unofficial) is rather an issue of mass-media agenda. According to a poll, there were in fact seven states that expressed their disagreement regarding Romania`s accession to Schengen zone. Sure, we can speculate about the fact that three of these states are run by the family of European political parties where its part also actual in power party PSD, and the four belong to the European political family where is part opposition party PDL. However, the position of a State to the Schengen expansion is not linked necessarily to European policy, but domestic policy and how it will affected the State. Hans-Peter Friedrich, German Interior Minister and member of the Christian Social Union (CSU), part of Chancellor Angela Merkel’s party, publicly announced that Germany will use its veto, if required, to prevent Romania from joining the Schengen zone. But, we must not forget that Germany is one of the states that negotiated the plan of Romania’s accession to Schengen in two stages, thus overcoming the deadlock from 2012 in the talks on the accession of Romania.

TWR: What do Romanians feel about EU? Are they happy to join it in 2007? What are the significant positive changes in Romania after joining the EU?

Gabriela Ionita: If we look at the broad aspect, we can say that Romania is one of the European Union countries with a balanced distribution between Euro-sceptic and Euro-optimistic. Of course, joining the EU was a reason of joy for all Romanian. Joining NATO and the EU are the most important steps of the past 20 years. Unfortunately, subsequently, the governments have not been able to intelligently and efficiently utilize the benefits of this membership. The simplest and perhaps the most general result of accession to the EU is the free movement of persons. With all the consequences from here: labour mobility, more opportunities, and the chance to invest in EU countries. Of course, the economic crisis has diminished these opportunities, but Romania will still gain as Romanian state cannot provide working and living conditions at the level of many EU countries.

TWR: Do you think Euro has done any better in Romania? Is it promising in terms of Romania’s economic future?

Gabriela Ionita: Romania’s accession to the Euro currency area was scheduled to 2015. Nowadays, already there is a discussion of a postponement until 2020. Eurozone has problems in itself, Greece and Cyprus being only the most visible. Presence of Euro currency in Romanian market, of course brought benefits and some drawbacks too, but the transition to the single currency is already another discussion with deeper implications. Now the question here is: Is the Romanian economy strong enough for such a change? The most likely answer is No. In fact we also have examples of countries with a strong economy which regressed after joining the Eurozone. Any automatic increase in prices would be supported by an increase in income of population, which in the current issue of the economic crisis is useless to consider.

While there is discussion going on to live without Schengen or to not to make this issue its priority, accession to Schengen zone is Romania’s right and it meets the criteria. Saying Germany’s position is rather a political one, Romanian officials have announced a change in strategy to overcome the barriers. Romania will make it necessary for Netherlands and Germany to formally explain their refusal with logic and arguments pertaining to laws and European regulation. This move would put Germany and the Netherlands in difficulty as Romania already meets all the criteria to enter the Schengen region and it has got backing of European commission.

If Romania also implements the suggestions and changes which other countries are suggesting, it will not only improve the problems in Romania, but also further pitch its candidacy for the Schengen reform. Romania’s entry into Schengen will give positive signs to the investors, the bank lending rates will decrease and the shares of domestic companies will rise, academics will be on a new high with more students exchange programs possible, and a boon to Romania’s booming IT industry, but a refusal to the entry even at the end of 2013 will be interpreted as a note of criticism to Romanian government for its incapacity to carry out vital reforms in judiciary and other areas.

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Sanskar Shrivastava is the founder of international students' journal, The World Reporter. Passionate about dynamic occurrence in geopolitics, Sanskar has been studying and analyzing geopolitcal events from early life. At present, Sanskar is a student at the Russian Centre of Science and Culture and will be moving to Duke University.

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Economy

Hungary And Poland To Lose Up To 25% Allocation Of EU Funds

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Hungary and Poland are set to be hit with new cuts in cohesion support after EU commission proposed new radical changes. This came to light after a series of propositions were published recently by the EU executive. Eastern European countries will be hard hit by the propositions, but more impact will be felt in Hungary and Poland.

The changes come in light of the immigration policies that certain countries have chosen to adopt. The two most affected countries will lose nearly 25% in cuts due to their problematic policies. The repercussions of the cuts could be felt very soon especially if the Eastern European countries decide to take on Western Europe.

Even though the commission has maintained that the new changes are not meant to be punishment for inconsistency and criticism, there is a general feeling that the countries will not take the changes well. The commission also argued that there is no need to compare the allocations between EU member states as each country has their own share of prosperity.

The proposed changes will also affect more countries in Eastern Europe including Lithuania, Czech Republic, Slovakia, and Malta. Germany will also get a reduction in the allocation to the tune of 20%. There are some countries however that will get a raise in their allocation including Greece, Romania, Bulgaria, and Italy.

The EU commission, through its commissioner for regional development, Corina Cretu, says that the recent changes have no political bearing behind them.

How the commission arrived at the figures

In previous years, the commission had an established formula for calculating the allocation of funds. This year though, it seems like there was a break from tradition since the calculation method was visibly adjusted. The GDP would be used to determine prosperity in the region during the past, for instance. This criterion seems to have been adjusted in addition to the inclusion of other factors like climate, education levels, employment levels, and of course the attitude of the countries towards immigrants.

It is yet not clear how these changes will affect the forex market in Europe. What is clear though is that the aftermaths of major decisions in recent years have often caused some disturbances in the stocks and forex markets. At times like these, stock and forex traders need to be on the lookout for any major breaking news. Admiralmarkets.pl suggests using the current forex and stock platforms to get market feeds in real-time.

The current feeling from the Eastern European countries is that the commission is finding ways of diverting money from the region to other regions that have faced challenges in recent years. The southern part of Europe has for instance been in the red for a couple of years now. The crisis in Greece and Spain is yet to completely settle.  The sentiments of Eastern Europe do not seem to bother the commission, however. The commission argues that these countries have seen major growth in recent years and that they would even handle stiffer cuts. This, the commission argues, would especially be true if issues like GDP per capita were to be considered.

EU officials have spent much of the time explaining how their recent propositions are in no way related to the crisis in the south. Instead, the commission has used every opportunity to highlight the changes in GDP as the key reasons for the allocation cuts. It is indeed easy to find reason in this rationale when you analyze the economies of Eastern European countries.

Poland has for instance seen a lot of positive growth in the past few years. In 2017, the economy grew by 4.6%. This growth came in the backdrop of a similarly strong growth the previous year where the GDP growth was recorded as having been 3%. The forecasts for this year do not look bad either. The GDP is expected to grow by at least 4.3% as per what the commission has established on its forecasts. The growth pattern in Hungary was also comparable, being 3.3% in 2016, 3.45% in 2017 and with a projected growth of 4% year.

Looking south, the economy of Italy recorded growths of 0.9% and 1.5% in 2016 and 2017 respectively. The forecast does not look any different also as a projected growth of 1.5% is expected. In order to argue their case, the commission argued the case of Portugal, which is still struggling but which got some cuts due to its strong performance recently.

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Hungary Economy: Population, GDP, Inflation, Business, Trade

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The Hungarian economy is ranked as the 55th freest according to 2018 statistics. This economy has undergone a lot of transformation and it has particularly improved in the areas of the judiciary, labor freedom and investment. There are some realms however that have not seen great improvements especially in the areas of business freedom, government integrity, and property rights. In overall, Hungary is below average in most metrics in Europe compared to other peers in the region. The country is also just above the world average on the global scale.

Looking at its recent past, this country has seen a bit of relapse into some laws that were previously abandoned. The country has definitely seen much freer and liberal laws in recent years just before the government began to intervene in the areas of policy. Much of the changes over the years have been instituted to support economic growth and to balance out the budget while steering clear of areas that might cause conflict with the European Union. There are many targets that the government has including reducing public debt. It plans to achieve all of them by taking an active role and instituting sectoral laws.

The history of Hungary is long and colorful. It was once part of the communist realm until 1990 when it became completely independent. The country is currently a member of NATO having been in the organization since 1999. When the EU was formed, Hungary was not among the founding members and only joined the organization in 2004. There have been numerous economic reforms in the last decade and today, the economy is supported by strong local demand as well as exports. In recent years, things have been looking very optimistic for the country. The construction industry has boomed and there is a hands-on approach by the government on economic matters. The unemployment rate in the country is low.

Despite these improvements, there are still some challenges that face the government. It is for instance not as open as it ought to be and the judiciary is weak and subject to government interference. The policies surrounding land tenure are pretty straightforward and the government keeps updated records. Because of its somewhat domineering government and a weak judiciary, there are always concerns about corruption. The business sector is thus highly affected by the apparent indifference in the government towards corruption. A lot more needs to be done by the government to deal with prominent figures who have been a menace to business.

Moving on to the financial sector, there is a generally fair support by the government to the financial markets. The tax for corporates is maintained at 19% and tax for individuals is at 15%. The stock market is pretty vibrant with the Budapest SE index enjoying some good figures in recent years. Forex traders can do many things in this country even though the market is not as developed especially compared to the West. Forex trading is supported a lot and there are dedicated providers that allow Hungarians to access tens of thousands of markets.

As a country that is still developing many sectors, Hungary has a government that has a direct oversight over some sectors. You will thus often find direct government support for some industries. There are some sectors where there is not enough manpower. The labor regulations are somewhat basic which makes mobility a little difficult. Most of the product prices are market-determined but some goods’ prices are regulated by the government. Some of the areas in which the government has a hand on the prices include the markets of pharmaceuticals, tobacco, digital money, some machinery and electronic appliances and telecommunication products.

The health of the economy is definitely good considering that the trading industry is pretty vibrant. Hungary relies a lot on both exporting and importing goods. The total value of goods that either leave or enter the country comprises of up to 175% of the GDP. There are no strict tariff regulations and there is a general preservation of a 1.6% tariff rate. While there is much more government presence in many areas of the economy, the impact is not too big to disrupt economic activities. The financial sector is still in its formative years and it will take sometime before the banks get the necessary regulatory policy that supports growth.

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Europe

Navigating legal matters in Spain

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Starting or expanding your business or investments into a new country can be daunting. The task of understanding and complying with legal obligations and tax commitments can be very difficult, especially when regulations are not in your first language, or you have little experience of the country you are expanding into.

Doing business in Spain can be incredibly rewarding, but it can be tough. Legal bureaucracy runs through every aspect of day to day life, and the smallest mistake can have far reaching consequences for your business. This is why you will need to decide carefully when choosing Legal services in Spain. You need the very best multilingual experts, that can advise and guide you through each task with professionalism and care. You need to look for a partner who can help establish and grow your business.

A one-stop shop for legal services

A business needs to be able to have absolute trust in their legal service provider and will not want to be working with multiple companies for different specialisms. Being compliant with the law is already hard enough without navigating through four or five different law firms.

This is why choosing a one-stop shop for legal services is the best options, especially if you are new to conducting business in Spain. By choosing someone who can advise on everything, you can be sure that you will not suffer the consequences of something being missed. Afterall, whether it is finance, tax, employment law or any other legal formality, you cannot manage each one in isolation, they are all key parts of running your business successfully.

Not only that you want a partner, who can help grow your business and maximise opportunities to do so. One that understands the complexity of the issues your business may face, and can give a sincere and honest opinion.

Get the formalities covered and spend more time doing what you do best

Nobody likes to spend their time struggling with paperwork,but it is a necessary evil with any business. By choosing an expert in legal services in Spain to cover the formalities, you can spend more time doing what you do best and running your business.

Whether it is registering your business successfully, trademarks and patent registration, opening of bank accounts, or managing the hiring and possible expatriation and visa applications of employees, by hiring an expert you can leave all these worries in very capable hands.

The only certainties in life are death and taxes

Tax is always tricky to manage. Not just ensuring you pay what is due, but also being able to make the right business choices that means you do not pay too much. Every business knows it needs specialists to advise  and assist with tax planning, VAT returns, financing and raising funds and mergers and acquisitions. But when starting out in a completely new country you need local experts who know the rules inside and out.

The last thing any business needs is an unexpected tax bill causing chaos with cash flow, especially in the early days.

There is always the challenge of day to day accounting and payroll to consider also. That is why using a service that not only understands the legalities but can actually manage your bookkeeping, payroll and invoicing for you will be worth its weight in gold.

Expert help with all aspects of law when you need it

No matter what area of law you need support with, a good legal service should be able to provide assistance with any aspect. You have the usual corporate law, with things like contract management, corporate compliance, bylaws and shareholder agreements, insolvency. But also commercial and employment law. You will likely also need assistance with real estate law and sometimes even more personal issues that family law and your own residency.

A good service will make it easy for you. They should look to gather a complete understanding of how your business operates. This should include detailed information gathering and design a plan on how to ensure compliance for your review and approval.

They will likely speak to many areas of the business to get a feel for business context and aims in order to properly assess where the business is now, and what recommended strategy should be deployed.

Communication with you and the key stakeholders of your business is paramount. On delivering the agreed actions for you there should be regular updates on progress and important decisions that are needed and clear reporting at the end of the review and delivery. This will give you the reassurance you need that the service is being delivered to suit your exact business model and concerns, leaving you safe and compliant.

One thing is for sure – do not try to go it alone, it could prove disastrous for your business and jeopardise your success. If you want to avoid costly mistakes, find a legal services partner you can trust, can provide a holistic service and is expert in all aspects of running and managing a business. The investment will prove its worth over and over.

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