Category Archives: Europe

Back to Work: Risk Management in a Time of COVID

Due to the ongoing COVID-19 pandemic, governments worldwide have opted to confine citizens to their homes. Forcing physical distancing among the population is a strategy of risk avoidance geared towards reducing the likelihood of the virus’ transmission.

In these uncertain times, when so-called “non-essential businesses” are banned from operating, small and medium companies must begin planning now for their eventual return to normal operation once confinement is over. Enterprises with limited resources must become familiar with the concepts of crisis and risk management; otherwise, they risk remaining permanently shut down.

After governments worldwide passed emergency legislation to stop the virus’ spread, companies came face-to-face with the new reality of confinement, which severely restricted operations and displaced employees. One day however, this quarantine will be over and workers will have to return to the workplace. Before this happens, all companies should develop a well-assessed and gradual return to normalcy introduced through phases.

Phase 1 – Observation

After weeks of confinement, citizens and businesses alike might react like a bull charging into the arena once the ban is lifted. Being deprived of simple freedoms like interacting with family and friends drives the desire for returning to normalcy. However, relaxing restrictions and a false sense of security from the viral threat will increase the likelihood of disease transmission. A rise in new cases will follow people as they return to work.

Risk management requires establishing an observation period of the disease’s impact on those wishing to return to work quickly. This observation period is necessary to monitor how the situation evolves as well as to analyze best practices from around the world. This phase should last at least two weeks (the estimated quarantine period for COVID-19) after the end of confinement enforcement.

Phase 2 – Kick-Off

Businesses should not attempt to return to regular operation without a proper mitigation plan in place, especially as staff return to shared workspaces. Companies have a duty to ensure their staff stay healthy and should, therefore, plan additional protective measures.

Evaluate and analyze multiple risks, identifying the most suitable treatment strategies to minimize the existing uncertainty. These strategies should consider (among other things): the number and type of staff physically returning to perform essential tasks; employees in specific risk groups (such as the elderly or those with pre-existing health conditions); and the returning staff’s willingness to share spaces. Managers should plan for shift work for selected staff; know how staff commute to work and develop plans to mitigate the risks of public transportation; and establish protocols for decontamination of public areas and use of personal protection equipment.  Managers should continuously review and draft new processes and operating procedures as the world learns more about this virus.

Phase 3 – Presence Escalation

A business’s most valuable resource is its staff and should avoid putting all of its assets at risk. As companies recover, gradually allowing employees to return while others continue to telework is a valuable strategy.

Additionally, preserving a clean working environment is more vital than ever. Any employee or third-party entering the workplace poses a risk of disease transmission and contamination. New standard operating procedures should include separate decontamination protocols for visitors and be strictly enforced. Social distancing inside the working environment should also be clearly defined and incorporated into these procedures.

Eventually, additional risk mitigation procedures, such as COVID-19 antibody tests that can indicate a person’s immunity to the disease, will be available to the general public. Until then, the above strategies will help prevent a resurgence of the disease as employees gradually return to work. This phase could take weeks or even months but should be completed before any return to full operational capacity.

Phase 4 – Long-Term Treatment

Western countries must enhance preventative measures and modify risk tolerance towards health crises. This means changing our social, cultural, and work habits, especially towards personal hygiene and proximity to others.

Most forecasting at the beginning of this crisis proved to be wrong or imprecise. It is difficult to forecast what may come in the next months, but health specialists believe a second, and even recurrent waves of COVID-19 infections could occur. We can only assume that access to tests and vaccines will be made available in the near term. However, we are not there yet, and other risk avoidance strategies must remain in place for now.

Proper planning for a return to normalcy is necessary as solidarity soars, and we prepare to weather this storm together.


Victor Perez Sañudo is a Law Enforcement Officer with over two decades of professional experience in security and risk management worldwide, having worked for the EU, NATO, OSCE and the United Nations in the five continents. Victor is certified Risk Management Professional C31000 by ISO 31000:2018 and certified Director of Security by the Spanish Ministry of Interior.

Why Russia Cannot Win

In November 2015, a Turkish F-16 fighter jet engaged and destroyed a Russian Su-24 Sukhoi that Ankara accused of violating its airspace. Moscow protested, claiming the aircraft remained over Syrian territory where the Russian military has been supporting the Assad regime with direct combat power since 2014. Though the drama of that incident led to a tense discussion, the relationship between the two countries returned quickly to reasonably good terms until recently. Last week, a Russian airstrike in support of Syrian Army forces in Idlib province killed 33 Turkish soldiers that probably made up a Turkish special operations command post there. Though Russia denied their air force was operating in the area, in the same breath they accused the Turks of breaking the 2018 ceasefire, which was designed to create a demilitarized zone in the Idlib region. As the world pleaded for de-escalation, Turkey vowed a vengeful response. 

Ankara has since backed up its threat. On March 1st, Turkish jets began systematically attacking the Syrian Army and its proxies in Idlib and Aleppo provinces. Turkish airpower is relentlessly and very effectively targeting the armor, artillery, aircraft, and other heavy equipment of the Syrian Army, which seems completely unprepared to deal with a threat from the air. The destruction has been so complete that it is raising questions about the efficacy of the Russian equipment fielded by the Syrian Army. Still, many say Turkey should act more firmly enough against Russia itself. They argue Turkey could put its substantial military power onto a full wartime footing much easier than Russia. Though this is true, Ankara’s long experience in the region cautions that the key to winning a clash there is by playing the long game and not jumping to conclusions. 

Indirect Support

Turkey has learned extensively from these battles and is using that experience in its quarrel with Russia. Turkey isn’t the only one with expertise in complicated disputes close to home. Russia also has similar ongoing conflicts and is applying those lessons in Syria. But there are differences. Syria is far from the Russian frontier, and its value to Russian power and prestige is not as apparent to the Russian public as other battlefields in the former Soviet Union (Ukraine). For Russia’s Syrian campaign to be successful, Moscow needs to keep casualties to an absolute minimum. Russian public opinion will not support yet another war of attrition like the Soviet-Afghan war without a clear Russian interest. 

To keep casualties to a minimum, Russia isolates its soldiers on bases protected by their allies and limits its use of force to Special Operations or fighter aviation, both of which are hard for the Turkey-affiliated Free Syrian Army to combat. As a second layer of defense, Russia provides its proxies, specifically the Syrian Arab Army (SAA), with advanced surface-to-air systems, anti-artillery radars, artillery, and different types of armored vehicles. These measures ensure that the “meatshield” keeping Russian forces safe from Free Syrian Army attacks remains in place. These tactics worked well thus far. Since Russia entered the region, rebel-controlled territory has shrunk continuously, and areas where the Free Syrian Army did manage to gain ground were quickly reconquered. 

However, Turkey has learned extensively from its decades-long battle with the Kurdish Worker’s Party (PKK) and is using that experience in its quarrel with Russia. A quick study of Turkish targeting shows Turkey is attacking the technical advantage Russia gave to the SAA, enabling the Free Syrian Army to advance and putting Russian forces in potential danger. By peeling back the layers of protection provided by SAA equipment instead of attacking the Russian soldiers that equipment protects, Turkey avoids turning the Russian public against Ankara and makes it very hard for Putin to justify a decision to escalate. At the same time, it transforms the entire conflict into a slow, persistent competition rather than an unbearably costly direct between two powerful contenders.

Playing the Long Game

The Turkish strategy demonstrates a nuanced reading of the history of the region in which no invading force has ever won such a competition. If Russia, Assad, and the SAA fail to quickly implement a serious countermeasure to Turkish airpower, the technically inferior rebels will begin advancing on all fronts, and the Russian body count will rise. This will have the effect of eroding Russian public opinion in support of Assad and force Putin to push for accommodation, not unlike the one that ended the Chechen war.

Though it will take some time before this strategy bears fruit, short-term gains by the Free Syrian Army are already visible along the northern, western, and southwestern fronts. Aleppo is once again in danger, an unbelievable consideration just a couple of weeks ago. Putin and Erdogan both know Russia is at a disadvantage in Turkey’s back yard and will most likely discuss a deal when they meet in Moscow on Thursday, March 5th. Until then, or until Russia can field an effective anti-air capability to the SAA in Idlib, Syrian, and possibly Russian, soldiers will continue to die in a war Russia just cannot win.


Mike Skillt is a former combat veteran and analyst now advising tomorrow’s leaders. Follow him on Twitter @MikaelSkillt.

Why Spain’s New Coalition Will Struggle to Govern

This article has been republished with permission from our partner, Stratfor. The original version was first published in Stratfor’s WORLDVIEW and can be found here.

HIGHLIGHTS

  • Spain will be governed by an untested coalition that does not control a majority in parliament, which will render the policymaking process more complex and limit the new government’s effectiveness.
  • The Spanish economy is slowing, and a combination of risk factors (from ongoing trade disputes with the United States to unresolved secession disputes with Catalonia) will contribute to even slower growth in 2020.
  • Companies operating in Spain will deal with greater fiscal pressures and a government that will seek to backtrack on some of the labor market reforms that were introduced during the peak of the economic crisis in the early 2010s.

Spain has just appointed its first coalition government since the return of democracy in the late 1970s, but the new government will struggle to pass structural reforms at a time of growing political fragmentation and slowing economic growth. Prime Minister Pedro Sanchez, who won a vote of investiture in parliament on Jan. 7 and will lead a coalition between his center-left Socialist Party (PSOE) and the left-wing Unidas Podemos (UP), will have to deal with a worsening economic environment, a precarious labor market and secession pressure from Catalonia. Companies operating in Spain, for their part, will face higher taxes and the reversal of some of the market-friendly policies that were introduced during the peak of the economic crisis in the early 2010s.


The Big Picture

In recent years Spain’s political system has become more fragmented, general elections have become more frequent and structural reforms have become harder to implement. For the most part, the Spanish economy has been immune to political events, growing nonstop since 2014. But that immunity is ending, and Spain’s new coalition government takes office facing slowing growth, unresolved secession disputes in Catalonia and a precarious labor market.

See Europe section of the 2020 Annual Forecast


A Fragmented Political Landscape

Between the 1980s and early 2010s, Spain had single-party governments led by either the PSOE or the center-right People’s Party. But in recent years, a combination of factors ranging from the economic crisis to corruption scandals led to the emergence of new political parties on the left and the right. As a result, Spanish parliaments have become more fragmented, early elections have become more frequent, and governments have had a harder time implementing policy. This development explains why Sanchez is the first prime minister to lead a coalition government since the end of Gen. Francisco Franco’s dictatorship in the late 1970s.

In a further complication, PSOE and UP do not control the majority of seats in parliament, meaning members of the coalition will have to first agree on policy with each other, and then seek support in parliament on a case-by-case basis. This will open the door to disagreements between the coalition partners and create a complex legislative process wherein the government will need to make concessions to smaller parties in parliament to pass legislation. Policymaking will, therefore, become more complex, slower and subject to constant pitfalls.

This complex political landscape will subject companies operating in Spain to recurrent uncertainty, both about the survival of the government and about future policy. The Spanish Constitution makes it hard for the opposition to oust a government, rendering the chances of a successful no-confidence motion against Sanchez low. However, disputes between the PSOE and UP could lead to the dissolution of their alliance that almost certainly would lead to an early election. At the same time, parliament’s fragmentation may force the government to modify or abandon its policy proposals, making it difficult for businesses to make long-term predictions about the continuity of policy.

Businesses in Spain, particularly in sectors such as banking and energy, probably will face greater fiscal pressure since the new government is expected to try to raise taxes on high earners and large corporations. For example, the PSOE and UP have agreed to introduce a tax on financial services, which will affect Spain’s robust financial sector. PSOE and UP have also agreed to backtrack on some labor reforms introduced during the peak of the economic crisis in 2012 by making it harder for companies to dismiss workers, reducing the use of temporary contracts and giving priority to collective bargaining on salaries instead of company-specific negotiations. Without a parliamentary majority of its own, the PSOE-UP alliance will have to reach out to smaller parties to introduce reforms in taxation and the labor legislation. Center-left parties such as the Republican Left of Catalonia (ERC), Mas Pais and EH Bildu could endorse these reforms, but they will make demands of their own in exchange for their support.

A Slowing Economy

Spain’s economy has largely been immune to the country’s increasing political complexity and uncertainty, growing every year since 2014 thanks to a combination of business-friendly measures introduced by Madrid during the economic crisis and a generalized improvement in the eurozone economy during the late-2010s. But that immunity seems to be over. Most forecasts predict that Spain’s GDP growth will slow in 2020 and 2021. This slowdown is connected to multiple foreign and domestic factors.

Trade disputes between the European Union and the United States will continue in 2020 and take their toll on Spain’s economy. The United States introduced higher tariffs on some Spanish exports such as olive oil and wine in 2019, and the White House could raise tariffs on additional products in 2020, especially if the European Union targets the United States with its own tariff hikes. This move would dent the Spanish economy because the United States is Spain’s main non-EU export destination (roughly 5 percent of Spanish exports go to the United States). In addition, Madrid’s plan to introduce a tax on digital companies (a decision the White House would oppose vehemently) could also prompt the U.S. administration to retaliate with additional tariff hikes.

At the same time, Brexit-related uncertainty will ease during the early months of 2020 but will return by the end of the year. The United Kingdom almost certainly will leave the European Union on Jan. 31 and will remain in the single market until Dec. 31. But should London and Brussels fail to reach a comprehensive trade deal by the end of 2020, and should London refuse to request an extension to remain in the single market, significant disruptions in trade would follow. The United Kingdom is Spain’s fifth-largest export destination (almost 7 percent of Spanish exports go to Britain), while millions of British tourists visit Spain every year. New barriers to trade (such as having to implement World Trade Organization tariffs if the United Kingdom and European Union fail to reach a trade deal by year’s end) would damage Spanish exports, while a weaker pound vis-a-vis the euro would lead to fewer British tourists in Spain — to name only two of the many consequences of weaker EU-U.K. economic ties.

The new Spanish government will also deal with domestic economic problems, particularly connected to the labor market. While Spain’s unemployment rate has been falling fast in recent years, it remains the second-highest in the European Union after Greece’s. Spain also has high rates of youth unemployment (around 30 percent) and a serious problem of long-term unemployment (people who have been out of work for more than a year find it much harder to find jobs than those unemployed for only a few months). Finally, Spain has the European Union’s highest rate of workers under temporary contracts: One employee in four is under a fixed-term contract, twice the EU average. This precarious labor market drags down domestic consumption and investment, which, in turn, undermines economic growth. The PSOE-UP alliance will seek to address these problems through reform in labor legislation, but it will need to persuade like-minded parties in parliament to join the effort, which will not be easy.

Unresolved Catalan Issues

The new Spanish government will also have to deal with Catalonia’s push for independence. The region will not secede from Spain any time soon, but the secession issue will continue to generate friction between Madrid and Barcelona and raise questions about the future of Spain’s territorial integrity.

Sanchez will benefit from the tense relationship between Catalonia’s main pro-independence forces, Together for Catalonia (JxC) and the ERC, which reduces the chances of a coordinated push for secession. JxC and ERC, which compete to be the region’s main political party, advocate different strategies to achieve independence. Some JxC members want to take unilateral measures to secede from Spain, while the ERC favors a more pragmatic strategy that includes dialogue with the central government in Madrid.

Their competition will increase in 2020 because Catalonia probably will hold an early regional election. This vote means that pro-independence parties will not be strong enough or united enough to seriously threaten Spain’s territorial integrity. Moreover, Sanchez’s promise to keep an open dialogue with Catalan secessionists and to improve ties between Madrid and Barcelona suggests that the central government will seek appeasement rather than confrontation to deal with the rebel region.

An important fact remains unchanged. Madrid will not authorize a legally-binding independence referendum in Catalonia, and the region’s pro-independence parties will not stop demanding it.


An important fact remains unchanged. Madrid will not authorize a legally-binding independence referendum in Catalonia, and the region’s pro-independence parties will not stop demanding it.


However, an important fact remains unchanged. Madrid will not authorize a legally-binding independence referendum in Catalonia, and the region’s pro-independence parties will not stop demanding it. The situation of the pro-independence leaders who were jailed after the unilateral declaration of independence in 2017 will also continue to create issues between Madrid and Barcelona.

PSOE and UP have promised to introduce a “fairer” mechanism to distribute state funds among Spain’s autonomous communities and to “reduce the ambiguity” in the policy attributions of the central state and the regional governments, both of which are meant to appease Catalonia. But they will struggle to win enough support in parliament to pass these reforms. As a result, tensions between Madrid and Barcelona probably will not be as extreme as they were in 2017 when Catalonia unilaterally declared independence, but long-term questions about the future of the region will not go away either.

So, while companies operating in Catalonia will see some degree of stability in 2020, their doubts about the future of the region will remain unanswered. Political uncertainty so far has had a modest effect in Catalonia because the region’s economy has grown nonstop since 2014. However, Spain’s National Institute of Statistics recently reported that Catalonia’s regional GDP grew at a rate lagging the average for Spain as a whole in 2017 and 2018. In the meantime, thousands of companies have moved their legal seats out of Catalonia to other Spanish regions since Catalonia’s independence declaration in 2017. While the vast majority of these companies retained operations and workers in Catalonia, the change of legal seat highlights the concern that the independence process has created among businesses in the region.

While Sanchez’s appeasement strategy probably will lead to a decrease of frictions between Madrid and Barcelona, it will create the risk of a nationalist backlash among Spain’s conservative parties. The People’s Party already has announced that it will take to the streets to protest Sanchez’s decision to keep the dialogue with Catalan separatists open, and the right-wing Vox party could do the same.

At the same time, the European Court of Justice recently ruled that ERC leader Oriol Junqueras, who was elected to the European Parliament in May, enjoyed parliamentary immunity when he was sentenced to 13 years in prison in October for his participation in the illegal Catalan independence referendum in 2017. The final decision on whether Junqueras should be released from prison is in the hands of the Spanish Supreme Court, but the European court’s ruling in favor of a convicted Catalan separatist could exacerbate Euroskeptic sentiments in Spain, particularly among Vox voters. Even if Sanchez tries to calm frictions with Catalonia, the situation in the region will continue to be a central element in Spanish politics.

An important fact remains unchanged. Madrid will not authorize a legally-binding independence referendum in Catalonia, and the region’s pro-independence parties will not stop demanding it.


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