Explainer: What is the EU emergency brake?

Explainer: What is the EU emergency brake?
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Negotiations about the UK’s place in the European Union now seem to hinge on one thing: applying an “emergency brake” to stop certain EU migrants claiming in-work benefitswhen they move to the UK. But what is this mysterious brake and could it really be used?

There are two types of emergency brake procedure in the EU. One relates to common foreign policy and security policy, the other to areas such as cooperation in criminal matters and (relevant to this case) on social security.

The deal currently under negotiation would make it possible for the UK to apply for a temporary exemption from certain pieces of EU legislation. The process of applying an emergency brake on benefits would involve appealing to the European Commission and the European Council for exemption for an agreed period of time.

In reality though, such suspensions are only allowed in relation to asylum of non-EU nationals and to the free movement of goods (that is, restrictions on imports and exports). There is no such thing as an emergency brake for inter-EU immigration or benefits. In essence, the UK and the EU are making this up as they go along.


The Treaty of Lisbon – signed in 2007 and in force since 2009 – handed the European Union greater power to develop legislation for all member states. The concept of the free movement of people – that is, the right to move to another EU country for the purpose of working – had until then remained unmodified almost since the creation of the European Community. But the treaty allowed for new legislation related to free movement to be more easily passed, without following the normal strict voting procedures.

To counterbalance these looser rules, it was decided that member states would be allowed to ask for specific measures to be subject to stricter voting if they were concerned that the new rules would cause extreme difficulties. To do this they would have to cite “vital and stated reasons of national policy” and appeal for the decision to be subject to more voting at the European Council. The idea is to delay implementation until it is clear that a large number of member states are on board. This is, effectively, the brake.

It’s important to note here that the brake clause was intended for use on new legislation – not on existing rules, as is happening in the UK’s case now. The goal was always to allow a member state to make sure any developing legislation would be widely supported before being approved.

EU regulations on coordinating social security systems (which apply not only to the EU, but also to EEA countries Norway, Iceland and Liechtenstein, as well as Switzerland) state that citizens from all these countries should have equal access to social benefits in every other country in the deal. The UK and Ireland asked the European Court of Justice to exempt them from offering equal access to citizens from EEA countries and Switzerland but their request was denied.

May need oiling

I’ve searched for examples of the emergency brake procedure being applied to challenge social security legislation but have found none. No major reform has been proposed in this area since the Lisbon Treaty came into force, so no-one has ever felt the need to apply one.

So if the UK was going to be allowed to use a brake in this area, the terms would need to be agreed anew. Fresh legislation would be needed and that legislation would have to be applicable to all member states, the EEA and Switzerland.

The real problem, though, is what comes after the brake has been applied. The implementation is likely to be incredibly complex. The only way that the UK could reject applications for benefits from non-UK citizens is by verifying the identity of everyone applying for benefits – including British citizens.

The current deal on the table suggests that EU migrants should be allowed staggered access to benefits over a period four years, which sounds even harder to implement. Then of course there is the question of how and when the UK would revert to the previous system.


Connecting everyone to the internet won’t solve the world’s development problems

Connecting everyone to the internet won’t solve the world’s development problems
Photo Credit: Noah Seelam/AFP
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By 9.30am today I will have skyped Malawi, emailed Ghana, Facebooked Nepal, paid a bill online and used the satnav on my mobile phone. It feels a long time since we first got colour TV at home and, years later, when I accessed the internet using a dial-up modem. When I recalled these moments to my son he yawned. Aged, 19, he doesn’t remember a time before ubiquitous connectivity.

According to a new report from the World Bank, more than 40% of the global population now has internet access. On average, eight in ten people in the developing world own a mobile phone. Even in the poorest 20% of households this number is nearly seven in ten, making cellphones more prevalent than toilets or clean water.

Digital technologies are spreading rapidly in developing countries. Digital Dividends Report
Digital technologies are spreading rapidly in developing countries. Digital Dividends Report

There is no doubt that the world is experiencing a revolution of information and communication technology, bringing about rapid change on a massive scale. But despite great expectations for the power of digital technologies to transform lives around the world it has fallen short and is unevenly distributed, with the most advantages going, as ever, to the wealthy. The World Bank argues that increasing connectivity alone is not going to solve this problem.

Digital dividends

Around the world, digital investments bring growth, jobs and services. They help businesses become more productive, people to find better life opportunities and governments to deliver stronger public services. At their best, the report finds that inclusive, effective digital technologies provide choice, convenience, access and opportunity to millions, including the poor and disadvantaged.

For example, in the Indian state of Kerala the community action project Kudumbashreeoutsources information technology services to cooperatives of women from poor families – 90% of whom had not previously worked outside the home. The project, which supports micro-credit, entrepreneurship and empowerment, now covers more than half the households in the state.

The World Bank also emphasises that the poorest individuals can benefit from digital technologies even without mobile phones and computers. Digital Green, an NGO working with partners in India, Ethiopia, Afghanistan, Ghana, Niger and Tanzania, trains farmers using community-produced and screened videos.

Many governments are using the most of positive digital dividends to empower their citizens. In countries with historically poor birth registration, for example, a digital ID can provide millions of people with their first official identity. This increases their access to a host of public and private services, such as voting, medical care and bank accounts, enabling them to exercise their basic democratic and human rights.

Digital divides

For every person connected to high-speed broadband, five are not. Worldwide, around four billion people do not have any internet access, nearly two billion do not use a mobile phone, and almost half a billion live outside areas with any mobile signal. Divides persist across gender, geography, age and income.

Across Africa the digital divide within demographic groups remains considerable Digital Dividends Report
Across Africa the digital divide within demographic groups remains considerable Digital Dividends Report

Those who are not connected are clearly being left behind. Yet many of the benefits of being online are also offset by new risks.

The poor record of many e-government initiatives points to high failure of technology and communications projects. Where processes are already inefficient, putting them online amplifies those inefficiencies. In Uganda, according to the World Bank, electronic tax return forms were more complicated than manual ones, and both had to be filed. As a result, the time needed to prepare and pay taxes actually increased. The report cites the risk that states and corporations could use digital technologies to control citizens, not to empower them.

The general disruption of technology in the workforce is complex and yet to be fully understood, but it seems to be contributing to a “hollowing out” of labour markets.

The labour market is becoming more polarised in many countries. Digital Dividends Report
The labour market is becoming more polarised in many countries. Digital Dividends Report

Technology augments higher skills while replacing routine jobs, forcing more workers to compete for low-skilled work. This trend is happening around the world, in countries of all incomes, demonstrated by rising shares in high and low-skilled occupations as middle-skilled employment drops. The World Bank notes that:

The digital revolution can give rise to new business models that would benefit consumers, but not when incumbents control market entry. Technology can make workers more productive, but not when they lack the know-how to use it. Digital technologies can help monitor teacher attendance and improve learning outcomes, but not when the education system lacks accountability

Not surprisingly, the better educated, well connected, and more capable have received most of the benefits —- circumscribing the gains from the digital revolution.

A tremendous challenge

The report emphasises that investment in connectivity itself is not enough. In order to achieve the full development benefits of digital investment, it is essential to protect internet users from cybercrime, privacy violations and online censorship, and to provide a full set of “analogue complements” alongside. These include:

  • Regulations, to support innovation and competition
  • Improved skills, to enable access to digital opportunities
  • Accountable institutions, to respond to citizens’ needs and demands

Ultimately, while the World Bank continues to champion connectivity for all as a crucial goal, it also recognises the tremendous challenge in achieving the essential conditions needed for technology to be effective.

In my privileged home, digital technology brings me choice and convenience. It will be a long time before the digital revolution brings similar returns for everyone, everywhere.


What’s going on at Yahoo?

What’s going on at Yahoo?Photo Credit: Omar Torres/AFP
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Spare a thought for the CEO of Yahoo, Marissa Mayer. Nearly four years on the job, the ailing internet giant is still struggling to deliver a credible path to growth. And following the US$4.3 billion loss the company reported for the year in its latest results, the Yahoo board undercut her plan to “accelerate Yahoo’s transformation” with its intent to “engage on qualified strategic proposals” – widely interpreted as putting the company up for sale.

Mayer’s plan involves laying off 15% of the company’s workforce in an effort to streamline the business. Yahoo is also planning to sell real estate and intellectual property. But investors are clearly unhappy with Yahoo’s performance – some interpret the focus on cost cutting and profit raising as the latest sign the company is planning to offload its core business.

A major reason for this is that by some measures – if you subtract the value of Yahoo’s major assets from the market value of the company, which includes a hefty stake in Chinese e-commerce behemoth Alibaba, for example – Yahoo’s core internet business is worth less than zero.

Asset management

How Yahoo manages its investments is therefore crucial and unlocking their value is a challenge. Selling its stake in Alibaba is easier said than done. Selling the stake and paying out the proceeds to shareholders would lead to a big tax bill. One way to lower this liability, however, could be in holding the Alibaba investment under the existing company and spinning off its core Yahoo business into a new listed company. This has the obvious advantage of keeping the current management in-situ – but is premised on market confidence in the existing management team.

Once a major player, Yahoo has become increasingly irrelevant, despite huge investments in engineering and media talent. Instead of cashing out when it had a US$45 billion offer from Microsoft in 2008, Yahoo has spent cash acquiring other companies and investing in new equipment in the vain hope that it can compete successfully with today’s major players, Google and Facebook. This has largely been led by Mayer who was hired from Google in 2012 to turn the company around.

The reporting of significant “goodwill impairment charges” was essentially a write-down of the value of previous acquisitions, reflecting recognition that they have not paid off. Investor awareness of this suggests that a private buyer might be welcome to take over Yahoo’s assets, optimise tax liabilities and eliminate expenditures that seek to compete in arenas where the probabilities of success are exceedingly low – this is how some have interpreted Mayer’s strategy.

Buyers are more likely to have a lower tolerance for re-imagination and a far more singular focus on maximising cash flows from Yahoo’s existing product line – hence the board’s emphasis on seeking out “strategic alternatives”.

In search of profits

In the meantime, Mayer will be hoping her attempts to engineer a turnaround at Yahoo materialise. In a deft presentation, she sought to break revenues into two parts – the declining revenues from the existing business and the potentially exponential growth that will result from newer product lines. Her analysis warned of decreased revenues in 2016 with the prospect of higher revenues in the future. Missing from this, however, was any detail of the profitability of these newer businesses.

Ultimately, investors care about results and these were – to say the least – disappointing, and followed swift on the heels of rival Google’s bumper earnings report. At best Yahoo’s profit margins were 2% in the fourth quarter of 2015 compared to Google’s 31.9%. Similarly, free cash flow was essentially zero in the second half of 2015.

It is difficult to see Yahoo surviving in its current form with its current management. The earnings announcement was an opportunity for a far more candid account of its problems and how they could be addressed. Rather, listeners were told that things will get better in a year’s time, based on an arbitrary classification of old and new products.

The gap between Yahoo’s market value and the value of its investments reflects investor scepticism. At such a time, phrases like “propel execution to a new level”, “re-imagining search” and “intense legacy drag” are unlikely to restore confidence. If anything, Mayer’s reassurances will only serve to propel investor scepticism to a new level, which further drives speculation that they are open to buyers.


‘They already had it in mind.’ Some African students feel that locals were just looking for an excuse to attack them.

Four days of fear among African students, months of mistrust among Bengaluru residents
Photo Credit: Nayantara Narayanan
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African students studying at Acharya Institutes in Bengaluru are still wary of stepping out of their hostels and rented accommodations. Four days after an accident involving a Sudanese driver and a subsequent mob attack on a group of Tanzanians, students at the college from Congo, Malawi, Namibia and other African nations are still worried about backlash.

Called to a meeting of African students with the college management on Thursday afternoon, a group of girls ventured nervously out of their homes. While waiting at a junction for further directions to the meeting, one of them brightened up when she looked towards the bus stop. “I am going to sit near the police man,” she said. “What can anyone do if I sit near the police man?” Her friends followed her to wait at the bus stop next to the man in the khaki uniform.

The incident that had them on tenterhooks occurred on Sunday night. A Sudanese man reportedly speeding down the narrow Acharya Road to the college hit a resident named Shabana Taj killing her on the spot and injuring her husband Sanaullah. A mob gathered at the site of the accident in Ganapathi Nagar. They thrashed the driver and burnt his car.

About half an hour later and half a kilometer away along a same road, a group of Tanzanian students were stopped by a crowd and dragged out of their car. A 21-year-woman told journalists that people in the crowd pushed her around, beat her and tore her t-shirt, leaving her wearing almost nothing. She boarded a bus along with a friend to get away from the crowd but the bus driver refused to move, prolonging the ordeal. While the Tanzanian students escaped into the nearby hospital, the mob set their car afire too.

Looking for scapegoats?

Students in the vicinity heard reports of the violence along with news that angry local residents were stopping vehicles to search African students.

“That night some of the Africans who were working were sent back by some Indian friends who said “you guys don’t go out, it’s unsafe”,” said Tasha (name changed), who is from Malawi and stays at a girls hostel near the college. “There are different reports that came that others were also attacked. I know one of our friends met the mob. They were about to attack him but he reasoned with them and managed to get away.”

The attacks kept most students at Acharya Institutes from African countries indoors on Monday and Tuesday. Some ventured to their classes on Wednesday. But they walked only in big groups when summoned to the college for a meeting with the management and representatives of their respective embassies in India. One student from Zambia, who goes by the name Ajay when in India, messaged directions to this reporter on where to meet him. He added, “It’s not safe for me to walk alone.”

Many like Ajay have chosen to come to Bengaluru to pursue higher degrees in computer applications. “Of course, this is the best place for it having such a big IT industry,” he said. Bengaluru and India are favourite destinations for young Africans aspiring to study engineering and medicine. Many come on scholarships provided by the Indian Council for Cultural Relations. Almost all student visitors say that the pleasant weather and much-touted cosmopolitan culture are incentives. “It is not too hot and not too cold, just like back home” remarked Tasha. “And when I Googled, it said the city had friendly people.”

Both Ajay, who has been in the city for two years, and Tasha, who has been here for a few months, said that they hadn’t been scared for their safety in Bengaluru before this. The discrimination has been more insidious, according to Michael from the Democratic Republic of Congo. As he walked up the college walkway he passed two of his classmates. “They are local guys and they have been my classmates for two years,” he said. “If everything was ok then we would have greeted each other normally. But they tend to stay away from the African students.”

What’s making Ganapathi Nagar angry?

Meanwhile, the residents of Ganapathi Nagar say that they are fed up of the rash behaviour of foreign students in the neighbourhood. Salespeople in shops that line Acharya Road, while denying having witnessed the incident on Sunday, say that students driving rashly have caused numerous accidents. “It takes a big event like this when someone dies, for the police to pay attention,” said Umesh from behind the counter of the grocery store.

Relatives gathered at Sanaullah’s house are irked that the Shabana’s death has been overshadowed by the news of violence against the Tanzanian girl. “All these ministers are talking about what happened to the foreign student when they can’t look after the people from here only,” said Sanaullah. “It’s ok. Give compensation, or even give my Aadhaar card to them.”

Sanaullah’s cousin refuses to believe that the mob stripped the Tanzanian student of her clothes. “When the public is angry you know how it gets,” she said. “People would have pulled them out of the car not even realising that she is a girl. These girls all wear such flimsy clothes that somewhere in pushing among the crowd her dress might have torn. All the people here have wives and daughters at home. How will anyone tear a woman’s clothes like that?”

While adamant that none of the local people could have abused the Tanzanian national, the residents of Ganapathi Nagar also maintain that they don’t know who the people in the mob were. “They all must have come from outside,” said Umesh. “We don’t know any of them.”

The police arrested people from Ganapathi Nagar for the attack on the Tanzanians based on CCTV footage, Bengaluru Police Commissioner NS Megharik said on Thursday, though the exact number of those detained was not immediately available.

Ganpath Singh seems to be one of the few people on Acharya Road in sympathy with the African students. A migrant himself who has been in Bengaluru for about six years, Singh runs a stationary and Xerox shop up the road from the site of the attack. “The students from Africa are just like the other students. They are very friendly,” he said. “ Almost 80% of business here comes from these foreign students – in the shops, restaurants and in house rent. It’s good for the locals.”

The perception problem

Sanaullah’s relatives oppose such thought vehemently. “Ever since these foreign students have come there’s only trouble,” one said. “They all drink and do drugs and behave badly and drive rashly here.”

It’s a perception problem Moses Mbwale has resigned himself to. “If they see that you are an African student they always think that you are a drunkard,” he said. “If they see that you are a black person they think that you are Nigerian. We understand that Nigeria has its own reputation. Not all African countries are like that, and not all Nigerians also. There have been locals also who drink and other people who don’t drink.” Mbwae is from Namibia and is the president of the African Committee of Acharya, a group that helps with communication between local students, the college administration and the French-, Arabic and Swahili-speaking students from Africa.

As students consider their security in the coming days, Tasha is worried about a deeper issue. “The way that I see it the mob had its justice by hitting the guy and burning his car. They didn’t have to threaten all of us,” she said. “It shows that they already had it in mind, that they were just waiting for something to happen to gang up.”

A map of the different African countries mentioned in this story.
A map of the different African countries mentioned in this story.