Dr. Yaroslav Prytula is an Associate Professor at the Department of International Economic Analysis and Finance at Lviv Ivan Franko National University (LIFNU) and a Professor at the Lviv Business School of the Ukrainian Catholic University in Lviv, Ukraine. Previously he served as an Academic Secretary of LIFNU and a Vice-Dean of the Faculty of International Relations at LIFNU. He is a member of the Supervisory Board of Lviv Ivan Franko National University. His scholarly interests are in macroeconomic modelling, quantitative methods in social science and higher education in transitional societies. His current research is related to socio-economic regional development in Ukraine. During 2001 he spent a semester in The George Washington University Elliott School of International Affairs under William and Helen Petrach scholarship and continued his research during 2003-04 in The George Washington University Research Program in Social and Organizational Learning under the U.S. Department of State funded Junior Faculty Development Program. During 2004-07 he was a fellow of the Open Society Institute Academic Fellowship Program. During 2007-09 Yaroslav was a fellow of the Global Policy Fellowship Program of the Institute for Higher Education Policy (Washington, DC). In 2011 Dr. Prytula was a visiting scholar at the George Mason University under the University Administration Support Program funded by the Carnegie Corporation of New York and administered by the International Research and Exchanges Board (IREX). Currently Dr. Prytula is a Fulbright Research Scholar at the George Washington University School of Business. Dr. Prytula was awarded his PhD in Mathematical Analysis from LIFNU in 2000. He graduated from the Faculty of Mechanics and Mathematics of LIFNU.  Yaroslav Prytula has received numerous awards and scholarships.

 

Presented by the Center for Russian, East European and Eurasian Studies, and co-sponsored by The Europe Center and the Stanford Humanities Center.

This seminar is part of the "Europe and the Global Economy" series.

How do political institutions shape the costs of responding to financial crises? Previous research contends that policy-makers in democracies choose policies less costly to taxpayers than politicians in autocracies. In this research note we re-evaluate Keefer's (2007) contribution to this body of research using an updated theoretical model as well as updated fiscal costs data, which is his dependent variable. We argue that political institutions shapes when politicians spend, rather than how much they spend, in response to financial crises.  In the updated theoretical model we include the possibility that politicians can shift crisis response costs into the future by using policies that create contingent liabilities. Politicians facing removal pressures--such as elections--have incentives to create contingent, rather than immediately realized liabilities. Empirically we illustrate this dynamic by first updating Keefer (2007) using new data on the fiscal costs of financial crises. We further substantiate our argument with Eurostat's detailed yearly, cross-country comparable data from the late 2000s financial crisis to show that politicians in democracies tend to increase contingent liabilities,  while also decreasing realized liabilities, before elections.

The workshop is premised on the view that we are now entering a new phase in the development of post-Soviet Europe. Clearly, further NATO enlargement and EU expansion are unlikely to take place in the next few years, creating a zone of insecurity and potential instability dividing those countries which succeeded in winning integration into the EU and into NATO in recent years from those countries that have sought membership without any immediate prospects of achieving it.  Moreover, even among countries that have been successful in achieving membership in recent years there remains continuing anxiety about the degree to which their new European partners are prepared to support their economic viability and guarantee their security, particularly in light of increased assertiveness from Moscow.

The central purpose of this workshop series is to analyze the new dynamics emerging within this region, focusing on the external influences exerted by Moscow and Brussels and how they interact with the internal dynamics of the “corridor” countries, and to explore possible scenarios for future stabilization and development.

This workshop will be held November 5 and 6, 2009 at Stanford.  The primary focus will be the “corridor” of countries consisting of the Baltic and Central European members of the EU and NATO, together with Belarus, Ukraine, Georgia and Moldova. Moscow and Brussels will enter as driving outside influences. The participants will include analysts and policymakers from the region itself as well as scholars from the relevant scholarly communities.

 

In recent years, the United States and its European Union partners have often diverged in their policy outlooks towards the wider European periphery—the diverse region stretching from the Balkans and Turkey, to the Westernmost former-Soviet republics and Russia. Whether a temporary hiatus or a more profound strategic divergence, this state of affairs reflects a departure from the mission of extending peace, freedom and prosperity to the European continent that the two sides have pursued in the post-Cold War period.

Fabrizio Tassinari, PhD, is Head of Foreign Policy and EU Studies Unit at the Danish Institute for International Studies in Copenhagen. He is also a non-resident Fellow at the Centre for European Policy Studies (CEPS) in Brussels and at the Center for Transatlantic Relations at Johns Hopkins’ SAIS in Washington, DC. He has written extensively on European security and integration. His book, Why Europe Fears Its Neighbors, was published on September 30, 2009.

 

Event Synopsis:

Dr. Tassinari's talk draws upon his recent book, "Why Europe Fears its Neighbors" (Praeger Security International, 2009), which attempts to survey and quantify the many challenges facing Europe with respect to its borders. Tassinari describes Europe's position toward neighbor countries as being influenced by the threat of immigration. He describes a "security-integration nexus" in progress since 1945, involving a gradual economic opening of Europe's borders to promote stability. While the EU today maintains to some degree its enlargement policy toward Turkey and the Western Balkans, other border-region states are classified under a "European neighborhood policy" with no prospects for EU membership. Recent policy discourse has decoupled security concerns from integration. The neighborhood approach, undermines EU policy by keeping neighbor states at too great a distance.

Next Tassinari offers Turkey and Russia as case studies. The debate within Turkey is leaning away from EU membership as the primary path toward modernization. Recent dialogue focuses less on meeting technical standards for EU membership and more on reckoning with issues of religion, identity and history within Turkey. With regards to Russia, in the past decade the country has become more assertive abroad and moved away from cooperation with the EU, preferring not to be grouped with countries like Ukraine, Moldova, and Georgia in the EU's approach to foreign policy.

In addressing the transatlantic relationship, Dr. Tassinari reflects that the US and EU have long disagreed about EU membership for Turkey, the direction of state building in the Balkans, and integration of some of Europe's neighbor states into NATO.

Finally, responding to the question of whether this divergence comes from a conflict over the "European power constellation" or rather is simply the result of issue-specific philosophical differences, Dr. Tassinari offers three arguments:

1. Strategic: EU policy reflects multi-level integration, wherein countries can be "more than partners and less than members." Tassinari believes even countries with no prospect for membership should be integrated as much as possible. 
2. Normative - in reality, the US and EU share goals for Europe's "neighborhood" - promoting democracy, human rights, and other values. Despite this, each side's initiatives are viewed with suspicion by the other. 
3. Institution - US policymakers buy in to the EU enlargement policy, with its firm commitments and well-rehearsed conditionality process, and don't see alternative policies such as the "neighborhood" approach as being useful. 

A Q&A session following the talk raised such issues as: Will the EU’s problems with “deepening” its relationships with neighbors hurt its prospects for “widening” through enlargement? What are the reasons for the mixed signals to Turkey from the EU? Do arguments about the EU’s denial of Turkey’s membership being based on racism hold any merit? If the Lisbon Treaty is ratified, what cross-border policy areas will remain the prerogative of nation-states and which might fall under EU Commission jurisdiction?

 

According to Professor Muiznieks, since the early 1990s, the Baltic states have been seen as unfriendly in the eyes of Russians due to their "return to the West" attitude. Professor Muiznieks explains the key features of Baltic-Russian relations while looking at how these problems may be resolved in the future.

Synopsis

Professor Muiznieks begins by discussing the less than warm relations between the Baltic states and Russia. He explains how this is particularly due to the Baltic states’ desire to “return to the West” since the early 1990s and escape Russian influence after so many years of occupation. This is particularly evident in the EU and the UN where Poland and Baltic States form a sort of anti-Russian “axis.” However, the Baltic states’ membership of such organizations means a share of their secrets, which, as Professor Muiznieks explains, the Russians subsequently exploit for intelligence purposes.

At the same time, Professor Muiznieks cites another crucial security issue for the Baltic states, energy security. Currently, there is less oil transit through the Baltic states then there was before; Professor Muiznieks believes this has helped issues of corruption. However, he notes energy companies still play a significant role both locally and in relations with Russia. Looking the future, Professor Muiznieks believes that while there are options for the Baltic states to lessen their electrical dependence on Russia by looking to Scandinavia, the shutting of Lithuania’s nuclear plant will most likely mean Latvia and Lithuania will turn to Russia for further supply. To Professor Muiznieks, the current situation holds opportunities but also many risks.

Unfortunately, the strategic power-plays continue on another platform, memory wars. Professor Muiznieks feels World War II is the key point of debate between the Baltic states and Russia. While Russia sees the war as a great triumph, the Baltic states view the conflict as a catastrophe which led to further occupation. Professor Muiznieks discusses the fact that this battle plays out locally through monuments or textbooks but also internationally through border disputes and UN resolutions. He cites the European Court of Human Rights as a new strategic arena for this war because of its utmost authority on the continent and the fact that its rulings can cement one group as victims and force others to pay compensation.  However, Professor Muiznieks believes any truce is unlikely. For him, this conflict is too linked to many personal family histories and not government based enough to be put to a real end.

Professor Muiznieks also looks to “compatriots” as a focal point of Baltic-Russian relations. “Compatriots,” in this case, are Russian citizens living abroad, particularly in the Baltic states. This issue is serious because Russian speakers comprise over a quarter of both Latvia and Estonia’s populations. Professor Muiznieks explains that tension was caused in the Baltic states after Russia’s war with Georgia as to how Russian policy would change towards its diasporas. In addition, Professor Muiznieks reveals that there is further concern over the possibility that Russia is encouraging speakers abroad to take up citizenship to create legal basis for any action against other states in the future. Professor Muiznieks also argues that funding for these “compatriots” is perhaps to counteract increasing EU influence in the region.

Overall, Professor Muiznieks believes that the Baltic states are seriously suffering from the global economic crisis which in turn is making it difficult for them to counteract Russian policy and be effective. Professor Muiznieks argues this makes the Baltic states quite vulnerable.

In a lengthy question-and-answer session, a multitude of points were raised. One of the key issues addressed was where the Baltic States, and in particular Latvia, fit in the European framework. This led to discussion of several other issues such as Scandanivia's changing role in the Baltic States, the role of the Baltic States in NATO, and language integration. Finally, another possibility much emphasized was the potential creation of nuclear power plants as a way to offset surging prices for Russian energy.