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As expected, US President Donald J. Trump on October 13 announced that he will not certify Iran’s compliance with the terms of a multilateral nuclear deal, accusing the Islamic Republic of “not living up to the spirit” of the agreement.

While Trump did not take the United States out of the deal, he asserted the right to do so and warned that he would if the US Congress does not make amendments to the agreement.

At the top of the list of amendments Trump would like is for Congress to address the issue of the “sunset clauses” in the deal. These clauses lift certain restrictions placed on Iran ten to fifteen years after the agreement took effect in January of 2016. However, even at that time, Iran would be prohibited from developing a nuclear weapon and be subjected to intrusive inspections.

Iran and the five permanent members of the United Nations Security Council (the United States, the United Kingdom, France, Russia, and China) and Germany struck the deal, known as the Joint Comprehensive Plan of Action (JCPOA), in 2015.
The controversial conditions surrounding Catalonia’s recent independence referendum show that a unilateral declaration of independence does not embody the will of the people, no matter how much Catalan nationalists claim otherwise. 

Long-standing tensions between the Spanish government and the Spanish region of Catalonia rose to a climax on October 1 as Catalans went to the polls in an independence referendum deemed illegal by Spain’s constitutional court and the European Union. Rather than a clear mandate for Catalan independence, the referendum revealed a deeply divided society, and the lack of a clear and legal path to secession from Spain. 

Voting statistics from the referendum indicate a lack of sweeping support for an independent Catalonia. Although two million Catalans backed independence, a larger majority (58 percent of those eligible to vote) did not participate in the referendum. The vote was also plagued by irregularities and lacked essential guarantees, such as a neutral administration, equal opportunity process, or statutory legislation, in a clear violation of the rules for such plebiscitary votes set forth by the Council of Europe’s Venice Commission.
European finance ministers meeting in Brussels on July 11 endorsed a number of significant new policy initiatives in an attempt to accelerate the development of European capital markets over the next six months. These initiatives point to a policy priority that aims to strengthen European banks. 

While concerns regarding the United Kingdom’s expected departure from the European Union (EU) may accelerate the speed with which some of these reforms are implemented, Brexit is not the most important impetus for this week’s policy decisions. European policymakers are just as focused on two additional policy priorities: sparking an investment-led economic recovery and accelerating much-needed balance-sheet repair within the banking sector. 

As the recent report from the EuroGrowth Initiative indicated and as Bank of England Governor Mark Carney underscored, the current recovery lacks sufficient depth to deliver sustainable economic repair and momentum in Europe. Consumer spending needs to be augmented by significant investment in order to generate a more reliable foundation for economic growth in the near term. Success will require increased reliance on market-based funding mechanisms as well as on centralized European-level standards.
The recent financial policy shifts agreed upon by European Union (EU) member states mark a move toward European economic growth and suggest a post-Brexit European capital market is starting to take shape.

On May 30, EU member states at the European Council set forth a series of regulatory policies designed to diversify the funding sources available to small- and medium-sized enterprises (SMEs) and early-stage companies. They also agreed to a regulatory policy regarding securitization.

These policy shifts are crucial to the creation of a common capital market in Europe that includes a larger role for market-based finance alongside banks in financing growth and innovation. They are also crucial to developing a foundation for an innovative economy that can contribute to dynamic growth prospects with particularly European characteristics, as discussed in the Atlantic Council’s recently published EuroGrowth Initiative Report

European Investment Bank President Werner Hoyer cites the importance of explaining the values of international cooperation


World leaders must reaffirm the importance of a cooperative international system and the tangible benefits to all stakeholders, Werner Hoyer, president of the European Investment Bank (EIB), said at the Atlantic Council on April 21.

While the surge of populism throughout Europe—in response to terrorism and economic stagnation—means that “renationalization is visible,” particularly in France during an election year, Hoyer insisted that when “the cooperative approach and the multilateral approach is being put into question in an irresponsible way… it is important to explain again the values of international cooperation.”
“Multilateralism” takes up a lot of characters in a tweet. That alone might make it unpopular with some political figures. More than that, it represents a positive outlook on the world that is at odds with the inwardness of populist discourse. Nonetheless, it is the word that should be at the center of today’s turbulent conversation.

We face monumental challenges and only together can we surmount them. Though there’s no denying that currently Europe has many problems, it is still collectively convinced of the need to reach out beyond its borders to other continents, to other peoples.

The framework on which this international cooperation takes place is diplomatic and financial. The diplomatic pillar is founded on the United Nations and the financial pillar is based partly around the work of the world’s multilateral development banks. So, tweet this: Multilateralism, the bulwark of our world order, promotes peace and sustainable development. It’s the foundation of our children’s futures.
 European venture capital (VC) suffers from fragmentation, undersized funds, lack of private capital, excessive and unfavorable regulations, dependence on public investment, and an often risk-averse culture. These factors that stymie VC in Europe are interconnected and mutually reinforcing.

The European Union (EU) is still not one large VC market; instead, the EU is made up of twenty-eight markets with different regulatory regimes. To market their funds across different EU member states, many VC fund managers must pay a fee and register their funds in each EU country. National corporate tax systems throughout the EU actively discourage equity financing and incentive debt financing. For funds operating across EU borders, double taxation remains a serious obstacle.  EU-wide regulations, such as Basel III and Solvency II, impede equity investments by banks and large insurance companies. As a result of this fragmented VC market, today’s typical European VC fund only operates in one EU member state and is much smaller than its US competitors. 
Political realities on both sides of the Atlantic have a significant impact on economic opportunity, and policymakers must address this dynamic in order to begin the process of stimulating European economic growth, José Manuel Barroso, a former president of the European Commission and former prime minister of Portugal, said at the Atlantic Council on March 10.

“There is a possibility to do things, but that depends on the politics,” said Barroso, who also serves as a co-chair of the Atlantic Council’s EuroGrowth Initiative.

“The most important risks today are political and geopolitical,” said Barroso, “but I believe there are conditions for Europe to prosper.”
A new Atlantic Council report provides a roadmap for the European Union to stimulate economic growth, and, by doing so, safeguard the European project and reinvigorate the transatlantic alliance.

The report, Charting the Future Now: European Economic Growth and its Importance to American Prosperity, was launched by the Atlantic Council’s EuroGrowth Initiative in Washington on March 10.

“In our view… the greatest threat to the European Union comes from the absence of sustained economic and job growth,” said Stuart Eizenstat, co-chair of the EuroGrowth Initiative, “and the best way to revive confidence in the European Union and in the whole European integration project is to stimulate greater economic and job growth and more innovation.”
US President Donald Trump has been outspoken in his opposition to multilateral trade agreements.  He will seek only to sign bilateral agreements in order to leverage the strength of the United States, the larger economy in any negotiation.  In such an environment, the Transatlantic Trade and Investment Partnership (TTIP), a free-trade agreement between the United States and the European Union (EU), is unlikely to survive in its original form.

As indicated by Trump’s rhetoric, the new US administration seems ready to give up the principles of openness, not just in the sphere of economics, that have greatly benefited the entire world. Future generations of Europeans and Americans will pay for this mistake if leaders on both sides of the Atlantic do not pave the way for an alternative agreement, keeping the talks alive. The new reality calls for a rethinking of TTIP, not its abandonment.


    

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