Saturday 19 November 2016

Brexit: a nation in turmoil with no clear solution

The British government will be heard by the Supreme Court on December 5th. © Flickr António Jorge Gonçalves

Six months after the referendum that slipped the UK’s moorings of a common Europe, the British Parliament was said to “have no plan for Brexit”. Britain is now immersed in a legal imbroglio as to trigger Article 50 and to guarantee its permanence in the single market while securing control of immigration.

When Prime Minister Theresa May said “Brexit means Brexit”, she was not fully aware of the meaning of her own words. In fact, after the British people voted on June 23 to leave the European Union, they couldn’t know where they were heading. Almost six months after the decisive plebiscite, the country realised they had entered a dull legal and bureaucratic train.  

Once revealed the referendum’s final verdict, the UK was poised to trigger Article 50 of the Lisbon Treaty, which sets the conditions in which a Member State leaves the Union within a period of two years. After a swift transition of power from Conservative David Cameron to Theresa May, the current PM built up a new cabinet including two new posts strategically put in place to deal with the withdrawal process. The new post of Secretary of State for Exiting the EU was appointed to David Davis while Liam Fox became Secretary of State for International Trade.


 High Court ruling and Brexit uncertainty


In early October, Theresa May announced she would trigger Article 5O by the end of March. However, the recent ruling of the UK High Court mandating that the British Parliament must be consulted prior to triggering Article 50 has brought further hassle to the British political scene.

Since Article 50 was only created in late 2009 and it has never been used, British politicians have been trying to grasp what to do in order to ease the divorce process. The parliament has a considerable amount of work on their hands but no one seems to know exactly how to proceed. In fact, the Financial Times reported on Tuesday (November 15), based on a leaked memo, that the “UK has no Brexit plan”. Apparently leaked by Deloitte, the note suggests it will take six months more for the government to decide what it wants to achieve from Brexit. Moreover, the document “estimates that an additional 30,000 extra civil servants could be required to meet the workload”.

After the immediate impact of the leaked memo in the media, PM Theresa May ‘s spokeswoman told journalists during a briefing that the document “was not commissioned by the Government” rather it was produced by an individual from an external accountancy firm that was “not working for the government”.

The unknown Brexit road


Rowing against the legal tide, the UK Prime Minister has vowed to continue Brexit plans. Defending her stance, Theresa May addressed the British people this time writing for the Sunday Telegraph: “Parliament voted to put the decision about our membership of the EU in the hands of the British people. The people made their choice, and did so decisively. It is the responsibility of the government to get on with the job and to carry out their instruction in full.”

Yet, the feeling of vagueness and uncertainty in the political scene is palpable.  May’s senior opponents have claimed they won’t approve Brexit negotiations if there’s no openness during debates. Labour’s Baroness Smith said: “We want to know how the Government sees the relationship with Europe. But at the moment all we’ve got is ‘we want a balance, we want to have a good working relationship, we’re in until we’re out.’ It’s just too general and too bland.”

Speaking to the Class think tank, Labour leader Jeremy Corbyn called for more “transparency” and “accountability” to the Parliament regarding the government’s plans: "I suspect the government opposes democratic scrutiny of its plans because frankly there aren't any plans. There are no plans beyond the hollow rhetoric, which they keep on repeating - apparently - that Brexit means Brexit,'' accused Corbyn.

On a similar note of displease, Sir Simon Fraser, a former civil servant heading the Foreign Office told MPs he thinks the country has no plan to leave the EU: “My understanding is that it is indeed proving to be a very considerable challenge in Whitehall to do this [drawing up a Brexit plan], that the government has not yet reached the point where - it is still in information-gathering mode and is not yet at the point of integrating that into a central plan. And that, I assume, will have to happen before the triggering of article 50 next year.

And I agree that this is a huge burden, a huge additional load, for the civil service. This is an extraordinary complex range of activity across a wide range of domestic and international policies and it will definitely impose a great burden on the civil service,” Fraser continued during the Brexit Committee on Wednesday (November 16).


How the British people perceive the Brexit management by the government. © Ipsos MORI poll    

Can the process be overturned?


Even though the “Remain” voters may be hoping for an opportunity to revert Brexit, it seems unlikely that the process will be reverted. After the High Court’s decision, the UK government immediately appealed to the Supreme Court and is expecting to be heard on December 5. If the government loses the appeal, it is expected to bring forward an Act of Parliament early next year, this way starting negotiation talks between MPs.

Some British politicians have confirmed their readiness to vote against Brexit. The leader of the Liberal Democrats Tim Farron said the party would oppose Article 50 unless a second referendum is considered. Nevertheless, both the Conservatives and the Labour Party have ruled out another referendum, claiming that it would be an undemocratic violation of trust with the British constituency who voted to “Leave”. Labour’s Jeremy Corbyn said they have accepted the result of the referendum but they won’t let go of the single market. “We are not calling for a second referendum. We're calling for market access for British industry to Europe,” said Corbyn.”

Brexit has thrown the very territorial integrity of the United Kingdom into question, too. With no surprises, Nicola Sturgeon, Scotland’s First Minister, has confirmed that the Scottish government will seek to be heard in the Article 50, naturally opposing Brexit.

 UK as a global actor


Concerned for the UK’s future, Sir Simon Fraser warned that the UK will jeopardise its global influence if it abandons the single market. “No matter how well we manage the process and however good the assets we have, structurally it is going to be much more difficult to exert global influence after Brexit,” noted Fraser while speaking at King’s College.

However, Brendan Simms proposed a different approach in an article for the Foreign Affairs magazine. Simms analysed how the UK could negotiate the UK’s maintenance in the single market. “The United Kingdom will remind the Europeans that most of them are not paying their relatively modest security dues of 2 percent of GDP to NATO. And just as the EU will warn the United Kingdom that it cannot cherry-pick, Britain will tell the EU that it cannot expect the British military to do the dirty work of protection and then refuse to let Britain share in the economic benefits that the wider EU enjoys thanks to those protections.”

While the divorce process is underway, European leaders are planning Brexit discussions without the UK. This decision came as a blow to May who had requested the EU not to convene without her presence. According to The Guardian, Council President Donald Tusk wants Member States to hold talks in a summit around December 15-16, disregarding May’s wishes.

Trump’s impact on the UK


The victory of Donald Trump in the US presidential elections has brought more uncertainty to the general British panorama. While it’s still difficult to analyse the impact of Trump’s triumph in the UK (and elsewhere), we could think of two possible scenarios. First, the UK comprehends that now more than ever it’s time for social union and eases the exit process together with the EU, as amicably as possible. Second, the UK believes that it will have a “special relationship” across seas, and is confident on future trade deals that will presumably boost the country as a global actor. While the first option seems more difficult to achieve given the current British internal political rows and incertitude as well as the conflict with EU’s terms (single market and free movement of people), the second alternative is all but speculation, as we still have to wait two months before Trump takes office, on January 20.

Yet, it is commonly known that President-elect Donald Trump felt inspired by the Brexit outcome, as he has mentioned during the presidential campaign. Donald’s stance towards the UK has made politicians such as right-wing UKIP’s Nigel Farage – the first UK politician to meet Trump after the elections – with bubbling euphoria and enthusiasm. Farage even offered to help the UK government in negotiations during Trump’s transition. A proposal that was declined by Theresa May.

Thus, the posed question remains: will the UK stick with its European counterparts, regardless of its exit from the Union, or will it be confident on its own greatness as an independent global actor?

Friday 18 November 2016

The state of healthcare in Europe: towards a new paradigm?


Healthcare in Europe is changing and a new approach of "value for money" is being debated. © Public Domain Pictures
 
Healthcare is changing in Europe. The continent faces significant challenges with an ever-older population, the rise of chronic diseases and an increased resistance to antibiotics. European leaders vow to curb this threat while industry representatives call for a new patient-centred healthcare system.

Current challenges


The healthcare environment is changing at a fast pace. European countries are witnessing an aging population and an increased incidence of chronic diseases such as diabetes, obesity and cardio-vascular disease. This current reality has put a massive strain on already trembling healthcare systems throughout the European Union. Another reason for concern is the growing resistance to antimicrobials (AMR). This reality represents a major issue affecting the EU population and requires immediate action. The immunisation against antibiotics has increased admissions-rates of patients in hospitals, therefore increasing the burden of healthcare facilities.

Towards a new paradigm?


Given the current panorama of healthcare in Europe, industry and patient representatives have been conveying the need for a shift in how we look at health. Hence, the new paradigm focuses on a patient-centred healthcare system where healthcare research and delivery is being drawn to be customised for the individual patient, based on personalised medicine. This innovative concept has been on the spotlight during the past years. However, we must accept that this new science calls for new regulatory approaches if patients are to be provided with timely access to innovative medicines. On the other hand, the question of ethics and privacy plays a paramount role on this new methodology.

Speaking about innovation and outcomes in June 2016, Joseph Jimenez, Novartis’ CEO said, “Healthcare systems are not prepared for what’s coming.” Jimenez went on saying that “we need to help healthcare systems understand what type of innovations are coming and we need to help them to understand the impact on the system.”

Health Collaboration Summit 2016: an opportunity for dialogue


Bringing a forum for discussion, the Health Collaboration Summit 2016 (November 10 and 11), organised by the European Federation of Pharmaceutical Industries and Associations (EFPIA) in partnership with the Patient Think Tank, in Brussels, convened patient organisation representatives and industry leaders from across Europe. The summit encouraged dialogue and best practices across the continent and focused on voicing the importance of unlocking the potential of value-based healthcare while calling on the patients’ role to become more prominent on defining outcomes.

All patients are different and what works for one does not necessarily work for another. The shift to a patient-centred approach can empower patients who want to take ownership of their own health. Value-added medicines represent a radical change for the industry. By focusing on delivering outcomes, more value for money is expected as a result. As a consequence, it can contribute notably to the sustainability of healthcare systems by identifying and discontinuing interventions that do not deliver superior outcomes.

On his article “Value Pricing For Drugs: Whose Value, What Price?” for the Health Affairs Blog, Robert Rubin developed the concept of “value for medicines”. Rubin explained: “The idea that drugs should be ’value priced’ is consistent with current trends in American health care like value-based insurance design, the decline of fee for service (quality over quantity), and the move for payers to provide case mix adjusted payments where providers go ‘at risk’ for costs, outcomes, and quality (e.g., Accountable Care Organizations in Medicare).”

Paul van Arkel, Head of Corporate Strategy and Healthcare Systems at Novartis, said that outcomes-based health systems are a solution that may contribute to those problems of a growing elderly population and the rise of incidence of chronic diseases. “It’s not easy to set up outcomes-based projects. This requires technical infrastructure, structural changes to the system and financial support, which takes a lot of political will,” said van Arkel.

Healthcare systems reform: where to start?


To sustain the momentum of healthcare systems reform widely adopting an outcomes-based approach, healthcare professionals advocate progress in three different areas. First, social awareness of what outcomes-based healthcare really is. Hence, informing the public of the benefits of this practice is the primary step, which at this point seems to be very abstract and theoretical. If people are to be truly at the centre of the healthcare system, it is vital that they understand the changes that are about to happen. This way, people could actually have a say in the matter by getting involved.

Secondly, big data has become the new Holy Grail given the benefits it can bring to patients and to the sustainability of healthcare systems, if used responsibly. Data on outcomes and transparency on that same data has the potential to prevent future epidemics and discover new disease patterns that may help researchers bring about personalised healthcare. Once again, the patients’ anonymity must be guaranteed.

Lastly, the industry has expressed a need for financial incentives not only for research and development but also for providers. The industry wants to focus on providing the best outcomes for patients and to get rewarded for that and not rewarded just for the whole cost of putting drugs on the market. "Surely we want to reward new medicines based on what they deliver rather than how much they cost to develop," said Richard Torbett from the Association of British Pharmaceutical Industry (ABPI).

The idea of “value for money” has been in the spotlight for a few years and scientific experts and researchers are trying to make sense of this new concept. Sara Clifford and Karin S. Coyne authored the article “What is the value of medication adherence?” where they question the feasibility of this practice. “What should be the appropriate adherence threshold for different drug classes to meet clinical goals?” or “How can we value adherence when we are not even sure how accurate our measures of adherence are?” they ask.

Antimicrobial resistance: a growing threat


On the occasion of European Antibiotic Awareness Day (November 18), the European Commission announced the latest annual surveillance results. The assessment revealed that in 2015 antibiotic resistance continued to increase for most bacteria and antibiotics under surveillance. Resistance to last line antibiotics that treat pneumoniae (carbapenem) increased from 6.2% in 2012 to 8.1% in 2015. There have been single reports of resistance to the last-line antibiotic in the Czech Republic, France, Germany, Greece, Italy, Poland and Romania. As this phenomenon poses a threat to public health, studies have found that people aren’t engaged with curbing this hazard mainly because they don’t accurately understand it. Hence, it is fundamental to properly communicate this disease to different audiences.

European Antibiotic Awareness Day, November 18. © Flickr DES Daughter

European Commissioner for Health and Food Safety Vytenis Andriukaitis seized the symbolic day to deliver words of awareness: “With rising resistance and no action, we would be facing a return to the pre-antibiotic age, where people died from common infections and minor injuries. This would have major consequences for people's health and for the economy, not only in Europe, but right across the world,” said Andriukaitis.

The Commissioner announced the launch of a second AMR Action Plan in 2017. “I believe every Member State should – as a matter of priority – be equipped with a comprehensive action plan against AMR,” he advised. At a regulatory level, the European Parliament is ready to start negotiations on the Commission proposal, but the Council is still in the preparatory stage. The Health Commissioner called on the Member States to speed-up their discussions.

Monday 14 November 2016

Portugal endures budget talks, credit evaluation and Schäuble’s remarks

Article published in Katoikos

Portuguese Finance Minister about to shake hands with his German homologue Wolfgang Schäuble in July 2016, after Portugal was crowned champion of Europe in the football competition. © New Europe

After the back and forth with Brussels, a positive credit rating helped Portugal overcome its state of budgetary limbo, yet Lisbon was “verbally downgraded” by German Finance Minister Wolfgang Schäuble.

Having received what seemed to be a green light from Economic and Financial Affairs Commissioner Pierre Moscovici in mid-October, Portugal’s left wing government drafted a budget for 2017, which was then approved with no surprises in the national parliament.

Favourable votes were cast by the Socialist Party (PS), the Left Bloc (BE), the Communist Party (PCP) and the Green Party (PEV), while the Party for the Animals (PAN) abstained and the right wing, composed of the Social Democrats (PSD) and the People’s Party (CDS), voted against the text.

Despite the draft budget’s parliamentary endorsement, intense negotiations between the parties are still ongoing, as the BE, PCP and PEV all consider it to be “insufficient”. At stake are alterations to the regime of green receipts as forms of contracts, the income tax brackets and the extension of deductions of expenses for education, among other social and financial matters. The government is trying to curb the deficit — it reached 4.4% of the GDP in 2015 — by increasing taxes on alcohol and tobacco, high-value real estate, vehicles and vacation rentals, as well as introducing a “sugar tax” on soft drinks.

During budget talks, Left Bloc leader Catarina Martins tried to bring back the sensitive issue of debt restructuring. "We noted, as everyone did, that the government accepted that we clearly need to negotiate a reduction of the public debt. It is an important development," she said last Friday (11 November) at the closing session of the debate on the general state budget for 2017. But Prime Minister António Costa made no further comments on the remark.

The country in numbers


Reaching 4.4% in 2015, Portugal’s budget deficit ranked as the EU’s third-biggest, behind those of Greece and Spain. According to the European Commission, the country’s deficit is estimated to account for 2.7% of GDP this year and is projected to fall to 2.3% of GDP in 2017.

Portugal’s 2015 deficit peaked due to the  €2.2 billion bailout for the Banif bank. In an official declaration, Commissioner Moscovici noted that even without the bank rescue, Portugal would not have complied with the 3% threshold for excessive deficits enforced by the Stability and Growth Pact (SGP) rules.

In contrast, local and regional government and social security funds recorded a surplus. Portugal also saw investment growth of 3.9% in 2015, due to a strong first semester. Private consumption also grew amid a significant fall in household savings.

Nevertheless, according to the Commission’s forecast, private consumption is expected to lose momentum in 2016 and 2017, due to elevated indirect taxes and a slight increase in energy prices.

Investment growth is expected to pick up again in 2017, supported by EU structural funds. However, these important funds were at risk of suspension due to the country’s noncompliance with official deficit targets.  Portuguese Finance Minister Mário Centeno travelled to Brussels on 7 November to discuss the issue with Commissioner Moscovici. Having said two weeks ago that the budget only “seemed” to be within the EU rules, Moscovici created a fair degree of suspense. In the end, he did reaffirm the budget’s compliance with the rules of the SGP, which guarantees Portugal access to the EU’s structural funds.

Portugal’s GDP


Portugal’s GDP is expected to expand by 1.5% in 2016 and 1.7% in 2017. Overall, the year of 1999 saw Portugal register its smallest deficit of 3% of GDP, while in 2010, the deficit reached an all-time high of 11.2%.

Portugal’s government budget as a percentage of the GDP is expected to decrease to 2.3% in 2017. © Trading Economics & Eurostat

According to the Commission’s 2016 spring economic forecast, Portugal's general government gross debt - comprising currency, bills and short-term bonds, other short-term loans and other medium and long-term loans and bonds - has broadly stabilised. It amounted to 129.2% of GDP at the end of 2013, slightly increased to 130.2% of GDP in 2014 and then gently dropped to 129.0% of GDP in 2015. According to Trading Economics, the GDP value of Portugal in 2015 (€179.83 billion) represented a mere 0.32% of the world economy.

Portugal’s government debt to GDP has maintained stable over the past three years. © Trading Economics & Eurostat


Endorsement from DBRS


The apparent success of the draft budget eased the crucial verdict from Canadian rating agency DBRS: a “low” rate (BBB) and a “stable” outlook. On 21 October Portugal breathed a sigh of relief after DBRS, the only leading rating agency to classify its sovereign debt above junk status, maintained a positive investment grade credit rating. The investment grade is a rating that indicates the credit-worthiness of corporate and government bonds. In other words, it is an assessment of the quality of a State’s public finances, thereby showcasing the estimated risk for potential investors.

This outcome brought great relief to the struggling nation, preserving the much-needed safety net from the European Central Bank (ECB). A downgrade scenario would have hit international confidence in Lisbon’s economic programme, excluding Portugal from the ECB’s bond-buying scheme.

But despite escaping a junk rating from the Canadian agency, Portugal still faces serious challenges. According to the Financial Times, Adriana Alvarado, DBRS’s lead analyst on Portugal, had said, “We are still concerned about Portugal’s high levels of debt in a low-growth environment. But the government has shown a commitment to the EU’s fiscal rules and is taking positive action on the banking sector.”

DBRS is poised to revisit its rating in April 2017, further driving Portugal’s determination to combat high levels of public sector debt, low potential growth, ongoing fiscal pressures and high corporate debts.

 Reverberations over Schäuble’s comments


Long known for his hard-line views on austerity policies and offensive remarks oregarding other countries, Germany’s Finance Minister Wolfgang Schäuble again sparked public debate after claiming that Portugal was on the right path until the socialists came to power in October 2015.

A former member of the Central Committee of the Communist Party, Domingos Lopesaccused Schäuble of being “insolent” towards Portuguese sovereignty. “Mr. Schäuble has no interest in the will of the people expressed in free elections. What matters to him is his own political preference, which means that anything that does not fall into line with his plans is at serious risk of being subjected to financial interventions,” he wrote for the daily Público. “Schäuble descends from the imperial strain that does not accept a reality when it does not serve the interests of German high finance,” Lopes added.

Commenting on Schäuble’s remarks, the President of the Socialist Party, Carlos Césartold the news radio station TSF that “the German finance minister is a pyromaniac who presents himself as a firefighter” and, referring among others to German investors in Portugal, stressed that his compatriots do not have the same vision.

The PM Costa chose not to comment directly on Schauble’s provocative statements. He too told RTP news that he “pays attention mainly to those Germans who are not prejudiced and who know Portugal and, hence, know what they are talking about.”

Shadowing the long-lasting Greek turbulence, Dimitrios Papadimoulis, a vice-president of the European Parliament and head of the Syriza party delegation, joined the condemnations of the German finance minister. “It is deeply disappointing to witness a single finance minister trying to block positive developments in another member state,” Papadimoulis said. “Schäuble’s stance goes against some of the fundamental values of the European Union, such as solidarity and collective decision-making.”