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EU immigration: Frontex faces scrutiny over its growing role

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The camera lingers first on the EU’s circle of stars insignia and then shifts to a close-up of the officer’s side cap, styled similarly to those used in the US military and French police. The man salutes in front of a logo for the armed force he represents: the Frontex European Border and Coast Guard.

Set to stirring music, the promo video to celebrate the launch last week of Frontex’s first uniform is a 77-second microcosm of a profound change in EU migration policy. The 27-member European bloc may not have the army that some cherish, but in order to protect its borders it now has its first weaponised corps, which is due to swell to 10,000.

To its supporters, Frontex — a once-obscure agency based in Warsaw — has become key to the EU’s strategy of controlling entry to its territory. It is an important milestone in the bloc’s efforts to create functioning institutions that can implement its security and foreign policy objectives. The US, some European officials like to point out, had a coastguard before it had its own navy.

Critics, by contrast, see Frontex as the spearhead of a militaristic “Fortress Europe” strategy that has been plagued by allegations of abuses and lacks sufficient accountability. Giulia Laganà, a migration specialist at the Open Society European Policy Institute, brands the Frontex video a “ludicrous” example of the “utter hypocrisy” of the EU’s “failed migration policy”.

The Frontex headquarters in Warsaw, Poland. The once obscure agency has become a key part of the EU’s strategy of controlling entry to its territory © Wojtek Radwanski/AFP/Getty
Frontex officers deal with Iranian and Iraqi Kurdish migrants who have just arrived by boat in Calabria, southern Italy © Alfonso Di Vincenzo/LightRocket/Getty

“Frontex want to make themselves look like the equivalent of homeland security or ICE [Immigration and Customs Enforcement] in the US,” she says. “The objective is keeping as many people out of Europe as possible, by any means possible.”

As it gains a higher profile, Frontex is facing a growing docket of concerns. On the same day the new uniform was unveiled, reports revealed that its headquarters had been raided in December by investigators from Olaf, the EU’s anti-fraud office. The agency has also come under increasing pressure from the European Commission over its alleged failures to implement human rights safeguards and write crucial rules including on how its agents should use firearms.

Most pressingly, Frontex faces an inquiry into multiple claims that it has been complicit in illegal “pushbacks” of refugees trying to enter the EU on foot or in flimsy boats. This can endanger migrants’ lives at sea or leave them stranded in countries such as Bosnia, sometimes in makeshift camps. Such actions also deny people the right to apply for asylum, even though some may be fleeing conflict zones or seeking refuge from persecution. Initial results of the review, set up by Frontex’s own management board, which comprises representatives of EU member states and the commission, are due to be discussed on Thursday. The report is likely to fuel the already intense battles over the agency’s activities and future.

Irregular migration to the EU is way down on its 2015 peak

1,032,408

Mediterranean land and sea arrivals to the EU in 2015

373,652

Mediterranean land and sea arrivals to the EU in 2016

94,950

Mediterranean land and sea arrivals to the EU in 2020 (Source: UNHCR)

Frontex defends its record in response to questions by the FT. It says it is co-operating with the Olaf probe, adding that raids like last month’s “do not necessarily imply any malpractice”. It says an internal inquiry had made a preliminary finding that there was no evidence of involvement in pushbacks by Frontex staff, or officers deployed in Frontex operations.

It also points to the scale of its transformation and its landmark status in the 70-year history of the EU and its forebears. “The creation of the EU’s first uniformed law enforcement service is a Herculean task,” it says.

Money and mandate

The story of Frontex is also the tale of how migration has become a dominant theme in EU politics since it sparked a crisis in 2015. In that year, more than 1m people arrived in the bloc, many from civil war-racked Syria, triggering border closures by some EU states and bitter arguments about where the refugees would go. The policy debate since then has revolved around how to prevent a repeat. This has stoked deep divisions between Mediterranean nations that want to redistribute arriving asylum seekers around Europe, and states such as Hungary that refuse to take any.

One of the few big policies member states have managed to agree on is the need to beef up Frontex. The 15-year-old agency was given the task in 2019 of building a standing cadre of 10,000 officers by 2027. It says it will have hired 1,000 of those by the end of this year, with the remainder to be made up of secondees from national authorities. The agency’s budget has grown from €142m in 2015 to €460m last year.

Frontex also enjoys support at the top level of politics. In 2018 Angela Merkel, chancellor of Germany, which took in more than 1m refugees from the 2015-16 arrivals, backed Frontex in a speech to parliament. “The question of fighting illegal migration means we have to strengthen external border protection,” she said. “That means also that the countries with an external border must give up some of their national responsibilities.”

Frontex officials question migrants picked up in the Mediterranean in Malaga harbour © Guillaume Pinon/NurPhoto/Getty
A protest outside the regional EU office in Warsaw against the treatment of refugees stuck at the Turkish border with Greece © Jaap Arriens/NurPhoto/Getty

But the speed of Frontex’s growth in both money and mandate has fuelled questions about the agency’s governance. These are magnified because of its mandate to deploy in neighbouring countries such as those in the western Balkans and co-operate with still farther-flung nations.

“If you give an organisation a lot of money and you constantly reiterate that they are at the centre of migration policy, you get this inflated sense of importance,” says Hanne Beirens, director of the Migration Policy Institute Europe think-tank. “Because of that there has been less emphasis on making sure there is a control mechanism on the activities of Frontex.”

As Frontex grows, the EU’s migration neuralgia has continued to flare, despite irregular arrival numbers falling to a fraction of 2015-16 highs. While national authorities and Frontex have faced questions over allegations of border violence in several countries including Croatia and Hungary, the Mediterranean and Greece in particular have become the centre of attention. Greece’s eastern neighbour Turkey is home to around 4m refugees and migrants, the vast majority of them Syrians, and also serves as an important transit point for people seeking to reach Europe from Afghanistan, Pakistan, Iran and African nations.

Last March, Turkey’s president Recep Tayyip Erdogan followed through on a threat to “open the gates” to refugees. The move showed the fragility of a 2016 deal under which Turkey has received billions of euros in EU funding in exchange for taking back refugees who have travelled from its soil to Greek islands. Thousands travelled to the border with Greece, which Ursula von der Leyen, European commission president, then praised as the EU’s aspida, or shield. Media investigations later suggested two men may have been shot dead by Greek security forces — allegations Athens denies.

The burnt-out Moria refugee camp on Lesbos. Fires left thousands of migrants homeless © Dimitris Tosidis/EPA-EFE

In September, fires at the Greek island refugee camp of Moria left thousands homeless and exposed the squalor of the overcrowded facility. Ylva Johansson, EU home affairs commissioner, unveiled a proposed new migration “pact” the following month with the declaration that the bloc should have “no more Morias”. She acknowledged that the disaster and its aftermath showed the “failure” of the EU to agree needed migration and asylum reforms.

But critics of the bloc see the Greece-Turkey border troubles and the Moria conflagration as features of EU migration policy, not bugs. “Greece has followed hardline policies carried out in the UK and EU, with the protection of its partners, after Ursula von der Leyen called it the ‘shield’ of Europe,” says Epaminondas Farmakis, co-founder of HumanRights360, a Greek activist group.

Marine frontline

Frontex operates in the Aegean Sea under the banner of Operation Poseidon. It deploys vessels and aircraft mostly seconded from EU countries and co-operates closely with Greece’s small coastguard. Frontex says it supplies almost 600 “guest officers”, who perform border surveillance and assist in the identification and registration of incoming migrants, as well as debriefing and screening.

The Aegean has become a centre of allegations of pushbacks of migrants, in contravention of international law and what are supposed to be EU norms. Louay Alnassar, a 33-year-old Syrian IT specialist living in Turkey, claims he was the victim of a pushback in March 2020. He says he paid €2,500 to cross from Turkey to the Greek island of Rhodes at night in a rubber dinghy with 17 other people. They landed on a deserted beach at 6am and were picked up shortly afterwards by a police patrol.

Frontex officers on a patrol vessel in Malaga after intercepting a dingy carrying migrants. In the Aegean Sea off Greece the border force has been accused of the pushback of migrants © Jesus Merida/SOPA Images/LightRocket/Getty
One of the migrants in a thermal blanket after being rescued in the Mediterranean © Jesus Merida/SOPA Images/LightRocket/Getty

Mr Alnassar says he and his fellow travellers were locked up with very little food and water for two days, during which no one took down their details. On the second night, masked security force agents took them to a port and put them on a coastguard boat that sped out to sea for about an hour. “They took our phones and pushed us into orange life rafts, shouting at us the whole time,” he recalls. “We drifted in the dark for about two hours, then a Turkish coastguard boat picked us up.”

Greek authorities either deny that pushbacks occur or claim the country is protecting its national borders according to international law. Kyriakos Mitsotakis, prime minister, said in August that pushbacks “didn’t happen” and claimed his country was the victim of a “serious misinformation campaign”. In September, Giannis Plakiotakis, shipping minister, said Greece had “prevented the entry of more than 10,000 people since the start of the year”, while avoiding saying exactly how.

“Greece neither orchestrates nor encourages the so-called pushbacks,” the migration ministry in Athens told the FT.

Frontex has faced allegations of complicity in these illegal pushbacks, from human rights groups, media reports and other sources. A joint probe published by international journalistic outlets and investigative groups in October found six incidents in which the agency was allegedly either directly involved in, or near to, a pushback. In a separate October incident, Swedish coastguards said a Frontex co-ordinating officer discouraged them from filing a so-called “serious incident report” after they saw a pushback into Turkish waters by Greek authorities off the island of Chios, according to a written exchange between Frontex and its management board seen by the FT.

Frontex declines to respond specifically to alleged incidents, citing ongoing inquiries into them. It says it is co-operating closely with the working group review of the allegations set up by Frontex’s management board. If necessary, it would upgrade its reporting mechanism to “make sure no possible violation of fundamental rights goes unreported,” it adds.

Human rights concerns

The pushback allegations play into wider claims that Frontex pays insufficient attention to oversight of human rights. Far from forcing member state authorities to do better, its critics say, it has failed to hold them to account.

“It’s a very closed agency, I must say,” says Tineke Strik, a Dutch Green politician, who has examined Frontex as a member of the EU parliament’s committee on civil liberties, justice and home affairs. “It’s very difficult to find out if the procedures that are in place, such as for serious incident reports and complaints, are effective enough.”

The European Commission is also scrutinising Frontex’s performance. It says it is “deeply concerned” about reports of pushbacks and non-compliance with EU laws on human rights and the right to access to asylum procedures.

Monique Pariat, the commission’s director-general for migration and home affairs, raised a series of problems in a letter sent last month to Fabrice Leggeri, Frontex’s executive director, and seen by the FT. Ms Pariat attacked Mr Leggeri over the way he had presented “a number of important points” to the commission and EU legislators.

Monique Pariat, left, the European Commission’s director-general for migration and home affairs raised a series of problems in a letter sent last month to Fabrice Leggeri, right, Frontex’s executive director © frontex.eu
The new Frontex uniform was launched last week © frontex.eu

Ms Pariat alleged Frontex acted unlawfully by publishing job vacancies for a fundamental rights monitoring officer and deputy without management board approval. She also pointed to unjustified delays in Frontex recruitment, including of 40 fundamental rights monitors. She added that the agency had made inadequate preparations for its standing corps, including a delay in drawing up draft rules on the carriage and use of weapons.

Frontex says it fully respects human rights and points to the difficulties of its task, particularly during the global health crisis. It regrets any miscommunications that might have occurred in its work with EU member states and institutions. “Unfortunately, some misunderstandings in such demanding times and online discussions are unavoidable,” it says, adding that it looks forward to “continued collaboration to together keep our borders safe”.

The Frontex promo video encapsulates wider questions about the agency’s commitment to transparency. Frontex would not confirm the identity of the model — whose name tag read “Mihail Gan” — or whether he even worked for the agency. It denies that his garb was the “militaristic uniform of the armed forces”, adding that it has been endorsed by the commission and member states.

Frontex officers will become ever more visible as the first public face of the EU seen by many arrivals. Even as controversy over its activities grows, its influence continues to expand. As the agency itself puts it, the European bloc’s unprecedented border force is already “becoming a reality”.





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FC Barcelona and Real Madrid will be forced to pay back illegal state aid

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FC Barcelona and Real Madrid will be forced to pay back millions of euros in illegal state aid after the EU’s highest court ruled Brussels was right to declare that beneficial tax arrangements they enjoyed for a quarter of a century were illegal.

The decision by the European Court of Justice upholds previous rulings by the European Commission and comes as Barcelona, the world’s highest-earning football club, is enduring one of the biggest crises in its history. 

This week police arrested the club’s former president, its current chief executive and its general counsel, in connection with a separate legal case ahead of a vote on Sunday to decide its next president. Barcelona, which recorded a loss of €100m last year, also has to contend with a debt pile of more than €1bn.

In 2016 Margrethe Vestager, the EU’s competition chief supremo, ordered four Spanish football clubs to pay back tens of millions of euros received since the 1990s in the form of sweetheart property deals, tax breaks and soft loans.

FC Barcelona subsequently contested the decision before the General Court, the EU’s second-highest tribunal, which annulled the commission’s judgment. However, after a final appeal from Brussels the ECJ ruled in favour of the EU.

In its decision on Thursday — which is final — the ECJ deemed the tax scheme “liable to favour clubs operating as non-profit entities over clubs operating in the form of public limited sports companies”, holding that it could therefore qualify as illegal state aid under EU rules.

The General Court had previously annulled Brussels’ decision over what it said was lack of sufficient evidence that the tax arrangements offered to the four football clubs, which also include CA Osasuna and Athletic Bilbao, were illegal.

But the commission had questioned the court’s “heavy burden of proof” on regulators in its appeal, arguing that a lower tax rate was obviously more favourable than a higher one.

The ECJ argued that the difficulty in assessing the extent of state aid — because of the complexity of tax deductions — did not preclude the commission from banning government practices that it considered gave sports clubs unfair advantages. 

It said: “The impossibility of determining, at the time of the adoption of an aid scheme, the exact amount, per tax year, of the advantage actually conferred on each of its beneficiaries, cannot prevent the commission from finding that scheme was capable, from that moment, of conferring an advantage on those beneficiaries.”

The Spanish government said on Thursday it had “absolute respect” for the court’s decision. FC Barcelona and Real Madrid did not immediately respond to requests for comment.

The judgment will be seen as a big win for regulators in Brussels who have for years been trying to stop highly successful commercial clubs from freeriding on the back of taxpayers.

The European Commission said on Thursday it noted “the judgment by the Court of Justice to follow the Commission’s arguments”.

Thursday’s ruling is the second time Brussels has won an appeal of its state aid decisions in recent weeks. Last month judges at the General Court rejected a legal challenge by budget airline Ryanair to state aid given to rivals on discriminatory grounds.

At present Barcelona is dealing with the fallout of what the Spanish media dubs Barçagate — allegations, denied by the club, that it corruptly hired outside groups to defame former president Josep Maria Bartomeu’s adversaries on Facebook.

Bartomeu was temporarily detained by the Catalan police earlier this week. He, the club, and other individuals in the case, which is being investigated by a Barcelona court, have all denied any wrongdoing.



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Italy raises €8.5bn in Europe’s biggest-ever green bond debut

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Investors flocked to Italy’s inaugural environment-focused government bond offering on Wednesday, allowing the country to raise more than €8bn.

The banks running the issuance chalked up around €80bn in orders for €8.5bn of debt. It was the biggest debut sovereign green bond from a European issuer to date, according to Intesa Sanpaolo, which worked on the deal.

Other recent Italian bond sales have also attracted strong demand, after former European Central Bank president Mario Draghi became prime minister last month.

Demand for the debt highlights the popularity of green bonds, which provide funding for environmental projects and require borrowers to report to investors on how the funds are used. 

Tanguy Claquin, head of sustainable banking at Crédit Agricole, which was a co-manager on the transaction, said the sale was met with “very strong support” from investors, particularly those that are required to consider environmental factors in their portfolios.

The bond, which matures in 2045, was issued with a yield of 1.547 per cent. The underwriters were able to reduce the premium against a normal Italian government bond maturing in 2041 to 0.12 percentage points, a slimmer premium than the 0.15 points initially mooted.

Italy follows several European countries, including Poland, Ireland, Sweden and the Netherlands, into the green debt market. France has issued 11 green bonds since 2017, totalling $30.6bn according to Moody’s Investors Service. Germany joined the market last year with two green Bunds. In its budget on Wednesday, the UK announced plans to sell at least £15bn of green bonds in two offerings this year. 

Italy is the first riskier southern-European government to tap the green market. The spreads on Italian debt relative to the eurozone benchmark German bonds fell to a six-year low of less than 0.9 percentage points in early February in a sign of investors confidence in Draghi’s leadership of the EU’s third-largest economy. The spread widened during last week’s volatile bond market trading but remains low by recent standards.

Spain plans to follow Italy with a green bond offering in the second half of 2021. Analysts expect an initial €5-10bn sale at a 20-year maturity. Johann Plé, senior portfolio manager at AXA Investment Managers said the demand for Italy’s sale “should reinforce the willingness of Spain and others to follow suit.”

Plé said the price investors paid for the Italian green bond “remained fair” and that this “highlights that strong demand does not necessarily mean investors have to pay a larger premium”.

Green bonds often command higher prices, and therefore lower yields, than their conventional equivalents from the same issuer. The German green Bund currently trades with a “greenium” around 0.04 to 0.05 percentage points, roughly double the gap when it was initially issued, according to UniCredit analysis, while French government green debt is roughly 0.01 percentage points lower in yield than conventional bonds.

Italy’s pitch on the environmental impact and reporting of its green projects drew positive reactions from some investors. Saida Eggerstedt, head of sustainable credit at Schroders, which invested in the bond, said the details provided on projects including low-carbon transport, power generation, and biodiversity were “really impressive”.



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German regulator steps in as Greensill warns of threat to 50,000 jobs

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Germany’s financial watchdog has taken direct oversight of day-to-day operations at Greensill Bank, as the lender’s ailing parent company warned that its loss of $4.6bn of credit insurance could cause a wave of defaults and 50,000 job losses.

BaFin appointed a special representative to oversee Greensill Bank’s activities in recent weeks, according to three people familiar with the matter, as concern mounted about the state of the lender’s balance sheet.

The German-based lender is one part of a group — advised by former UK prime minister David Cameron and backed by SoftBank — that extends from Australia to the UK and is now fighting for its survival.

On Monday night Greensill was denied an injunction by an Australian court after the finance group tried to prevent its insurers pulling coverage.

Greensill’s lawyers said that if the policies covering loans to 40 companies were not renewed, Greensill Bank would be “unable to provide further funding for working capital of Greensill’s clients”, some of whom were “likely to become insolvent, defaulting on their existing facilities”.

In turn that may “trigger further adverse consequences”, putting over 50,000 jobs around the world at risk, including more than 7,000 in Australia, the company’s lawyers told the court.

A judge ruled Greensill had delayed its application “despite the fact that the underwriters’ position was made clear eight months ago” and denied the injunction.

Greensill Capital is locked in talks with Apollo about a potential rescue deal, involving the sale of certain assets and operations. It has also sought protection from Australia’s insolvency regime.

Greensill was dealt a severe blow on Monday when Credit Suisse suspended $10bn of funds linked to the supply-chain finance firm, citing “considerable uncertainties” about the valuation of the funds’ assets. A second Swiss fund manager, GAM, also severed ties on Tuesday. Credit Suisse’s decision came after credit insurance expired, according to people familiar with the matter.

While the bulk of Greensill’s business is based in London, its parent company is registered in the Australian city of Bundaberg, the hometown of its founder Lex Greensill.

In Germany, where Greensill has owned a bank since 2014, BaFin, the financial watchdog, is drawing on a section of the German banking act that entitles the regulator to parachute in a special representative entrusted “with the performance of activities at an institution and assign [them] the requisite powers”.

The regulator has been conducting a special audit of Greensill Bank for the past six months and may soon impose a moratorium on the lender’s operations, these people said.

Concern is growing among regulators about the quality of some of the receivables that Greensill Bank is holding on its balance sheet, two people said. Regulators are also scrutinising the insurance that the lender has said is in place for its receivables.

Greensill Bank has provided much of the funding to GFG Alliance, a sprawling empire controlled by industrialist Sanjeev Gupta.

“There has been an ongoing regulatory audit of the bank since autumn,” said a spokesman for Greensill. “This regulatory audit report has specifically not revealed any malfeasance at the bank. We have constructive ongoing dialogue with all regulators in all jurisdictions where we operate.”

The spokesman added that all of the banks assets are “unequivocally” covered by insurance.

Greensill, a 44-year-old former investment banker, has said that the idea for his company was shaped by his experiences growing up on a watermelon farm in Bundaberg, where his family endured financial hardships when large corporations delayed payments.

Greensill Capital’s main financial product — supply-chain finance — is controversial, however, as critics have said it can be used to disguise mounting corporate borrowings.

Even if an agreement is struck with Apollo, it could still effectively wipe out shareholders such as SoftBank’s Vision Fund, which poured $1.5bn into the firm in 2019. SoftBank’s $100bn technology fund has already substantially written down the value of its stake.

Gupta, a British industrialist who is one of Greensill’s main clients, separately saw an attempt to borrow hundreds of millions of dollars from Canadian asset manager Brookfield collapse.

Executives at Credit Suisse are particularly nervous about the supply-chain finance funds’ exposure to Gupta’s opaque web of ageing industrial assets, said people familiar with the matter.

The FT reported earlier on Tuesday that Credit Suisse has larger and broader exposure to Greensill Capital than previously known, with a $160m loan, according to two people familiar with the matter.

Additional reporting by Laurence Fletcher and Kaye Wiggins in London



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