Good afternoon everybody. You're all very welcome. My name is Joe Brosnan. I'm a member of the Justice Group here in the Institute and Nora Owen who normally chairs the group can't be with us today, so I'm deputizing for for Nora. Before we start just a couple of housekeeping points. First of all, would you please switch your phones off or hold them off? If you want to tweet, that's fine. As long as your phone is on silent and the handle is at IIEA. The address by Marie will be on the right card. It's up to you whether you want the question and answer to be on the right card. You don't mind? You don't mind? I don't mind. That says we have to go into the Chatham House Rules because there will be no Chatham House Rules today. Our speaker today is Dr. Marie DeSommer. She's head of the Migration and Diversity Programme at the European Policy Centre in Brussels with a specific focus on EU family reunification, asylum law and the Schengen Free Movement area. She's also a guest professor at the Catholic University of Levin where she teaches EU human rights law. And prior to joining the EPC she worked at the European Commission, Maastricht University and the other prominent think tank on European matters in Brussels, CEPS. In her address today she will give an overview of developments in relation to refugees and to asylum applications in Europe and in particular the difficulties that have arisen for the operation of the Dublin Regulation on the issue of which member states should be responsible for examining asylum applications and also on the impact on the operation of the Schengen area of borderless free movement of persons. So this is in a way perhaps a somewhat technical aspect of one of the big problems that is facing Europe at the moment and is at the centre of politics in Europe at the moment. And the fact that it's technical or legal in nature doesn't lessen its importance. In fact it's quite central to the whole issue and to where we go from here in terms of trying to deal with the issue of the refugee influx into Europe. So without further ado I'll hand over to Marie. Thank you very much. Thank you also for the kind invitation. It's really a pleasure for me to be here and to talk to you about what I think is a very complex set of issues. I was introduced I'll be speaking about Dublin and I'll also be looking at the problems in the Schengen area and introducing how they are interdict. Very briefly on those problems and to sketch a bit of an overview there. The Schengen free movement area to begin with has in fact not been border control free now for over three years. We saw the first three introduction of border controls in September 2015 by Germany. Germany was followed by Austria and then later on and in that respective order the following countries did the same. Slovenia, France, Hungary, Sweden, Norway, Denmark and Belgium. Out of these nine countries six have continued to continuously reintroduce what were supposed to be only temporary controls since then. Those six are Austria, Norway, Sweden, Denmark, Germany and France. And most recently so earlier this month those six countries have also again given a notification to the European Commission that they will again be re-extending these border controls now for a period running up to November 2019. So sadly we will soon be seeing in September 2019 the fourth anniversary of border controls in the Schengen free movement area. On the Dublin side the situation is equally problematic I would say. The Dublin regulation as already mentioned organizes amongst other things which country is responsible for dealing with an asylum application and has been the subject of very heated extremely antagonistic debates amongst member states also since by and large the summer and fall of 2015. At the moment after more than three years of very intense debates and again very antagonistic debates the political deadlock is complete. In February 2019 the last new presidency to work on the file which was Romanian presidency definitively through in its owl stating we cannot make any progress anymore before the European Parliament elections which we have now just had. So I would like to address today two questions. First how exactly did we get here? Where do these problems come from? And second how can we move forward? To manage expectations I will not unfortunately be providing the definitive solutions here in my answer to that second question. I will instead elaborate on two scenarios that I think are currently quite dominant in policy making circles both in Brussels as at the national level. I'll provide my comments on them highlighting what I think can be improved or should be done instead. But before getting there and as highlighted I would first like to give an overview of how we got there. Where do the problems come from? How are they also interlinked? Because I think it's crucial to inform any understanding and any thoughts on how to move forward from there. I will not elaborate in doing so on the migration developments in 2015 and 2016 because I imagine this audience is quite familiar with them. The short recap would be that in those years Europe received over 1.2 million people annually. Filing asylum claims which was by and large doubled the amount which we were receiving in the period of 2010 up to 2014 and constituted in any case the largest inflow of refugees to Europe since the Second World War. While these events and exceptionally large numbers of course provide the context too and certainly marked the start of the manifestation of the problems I described at the outset they are not in my view the actual root cause or the source of the current difficulties. I actually think that what happened in 2015-2016 was only the uncovering of problems that were already there and I mean this specifically in relation to the Dublin system which in my view has embedded from its earliest conception here in Dublin in 1999 the First Dublin Convention now a regulation has embedded a structurally asymmetric design in assigning responsibility over refugees among EU member states. To briefly elaborate on these rules generally they provide that the member state that is responsible is the one to which an asylum seeker holds prior links and such prior links can be expressed for instance through the presence of family members in that member state possession of a visa or residence permit or prior states in that state. The default rule however which is the rule that applies when none of those criteria are met establishes that the responsibility for an asylum claim resides with the state through which the asylum seeker first entered the EU. The default rule is a use that the rule that is at current most frequently applied because most asylum seekers do not actually have any prior links with the member states and this is problematic because that default rule places a disproportionate share of responsibility located at the EU's external border and for that reason constituting most obvious first entry points. How did we get to such a poor design and how is it possible that we never address this in the long period that has followed since between 1999 and 2015? Two elements are important there I think. Firstly the problems in the very beginning and that is a period that I define as roughly running up to the mid-2000s the problems with that system didn't manifest themselves. We should also bear in mind that the Dublin Convention was signed in 1999 which means that discussions on that Dublin Convention predate 1999 hence they took place in the 1980s when Europe actually did not have many spontaneous arrivals amongst others because of the fact that we still had the iron curtain in place at that time and this is at least part of the explanation as to why to put it very simply policymakers simply did not spend sufficient thoughts on how the system would operate if and when larger migrant arrivals would be registered. From the early 1990s onwards of course the situation changed we did see the end of the iron curtain and with that we did also see migration movements to Europe rising particularly from east to west in the context of the political turbulence after the dissolution of the Soviet bloc. Still however the Dublin system did not pose any problems because at that time the state at the external border from the point of view of the migration movements going east to west was still Germany on the one hand Germany was the first arrival and was also the country of preferred destination for many of those asylum seekers at that time so there was no need for what are currently very problematic Dublin transfers and of course Germany was also a country which because of its size and economy had quite a bit of possibility to observe these newcomers with a degree of relative ease so up until the mid 2000s I think the reason as to why the system continued to be in place is because it wasn't posing any problems and this changed as from the mid 2000s onwards and with that of course problems as problems became visible two reasons account for why we saw problems then to begin with and straightforwardly migration flows to Europe started increasing and diversifying including increased movements from the African continent to then arriving in southern European countries in addition the EU's external borders also shifted with the 2004 accession of 8 central and eastern European countries moving that border eastward and to a lesser extent also southward with the accession of Cyprus and Malta in that same year and this is how and when we saw the first cracks in the system can't provide an exhaustive overview of that cracks but just to give a bit of a flavor with some examples for instance in Eastern Europe already immediately in the mid 2000s we had frequent observations, frequent reports of receptions, conditions being so structurally overwhelmed that there were structural so hunger strikes by asylum seekers in protest of the conditions they were living in in the south similarly we observed overcrowded facilities particularly on the Canary Islands in Malta and then of course as well in Italy and Greece leading amongst others later on to the famous MSS case of the European Court of Human Rights first of line of case law to follow precluding the new Dublin transfers back to those countries because conditions were found to be so problematic that they amounted to degrading treatment as prohibited by article 3 ECHR so the problems were there as from the mid 2000s onwards why were they not addressed it was certainly not due to the fact that reform exercises taking place it was also not due to the fact that there were no complaints or no pressure from the countries particularly in southern Europe the main reason and at the risk of simplification but the main reason generally speaking is that at the time the northern western European states had an interest in retaining the status quo as it stood and their political weight in the context of council decision making in that respect was definitive in blocking any meaningful reforms to that responsibility sharing system so first because of the early poor design and second because of the absence of any meaningful political will to reform that rule what I think we witnessed in 2015 and 2016 was a system that collapsed under its own weight because of poor design once it was faced with larger rival numbers and actually needed to start operating at a larger scale so 2015-2016 already under resource reception conditions facilities in eastern and southern Europe became structurally overwhelmed which resulted in mass secondary movements of asylum seekers from those countries to northern and western European states particularly to Sweden and Germany and providing us with the images that we're familiar with of people walking for days in deplorable conditions being stuck in train or bus stations etc so the collapse was triggered by the exceptionally high numbers but its structural reasons reside almost in the lack of political will and concerted action to address the flaw earlier I leave Dublin there for a bit I'll come back to it I want to now explain you why we continued why we started seeing problems in the Schengen area at that same time I want to argue there that those problems in the Schengen area also stem from that structural design flaw that has marked the Dublin system from its very beginning but their perpetuation today however is the result of political choices that I think are ill advised I'll explain first by highlighting how Dublin and Schengen have in essence always been interlinked the Dublin system and as likely many of you are aware but just to recap has actually originated out of the discussions that marked the creation of the Schengen Free Border Free Zone so the original Schengen Agreement as is well known was signed in 1985 by three Benelux countries plus Germany and France and in 1985 immigration was not yet a big concern there were only three articles devoted to it at the time however in the discussions that followed in the run-up to what would become the Schengen Implementing Convention on the exact rules and procedures on lifting these controls immigration did become a concern more specifically, policymakers at the time feared that if they were to abolish internal controls they would be faced with a security loss in terms of migration control and in order to address this they felt the need to adopt compensatory or flanking measures so member states reflected first on measures to strengthen what would now become a common external border and second they were also worried about a potential increase in so-called asylum shopping movements whereby in a border free zone asylum seekers who lodged their claims either in multiple states or would move from one state to another in an event of an unfavorable application an event of an unfavorable response to their application so as you can see these two concerns were then later on reflected in the Dublin Convention signed in the same year as the Schengen Implementing Convention in 1999 providing to begin with the common external border had to be controlled with more force and that there should be rules on how to allocate responsibility for asylum seekers in the common space as already highlighted it's important to keep that original logic in mind because in essence what I think happened in 2015 and why the Schengen system also got into trouble is because there was a spillover from the problems in the Dublin system that I described into the Schengen system and that spillover I believe followed the exact same pathway that was the one that led to the creation of Dublin out of the discussions on Schengen however in the opposite direction I'm a bit abstract here I will explain it better after the system's factual collapse and in the face of the huge secondary movements that we were witnessing in 2015 and 2016 and the clear evidence as well that Southern and Eastern Europe were no longer coping with the arrival numbers the next important moment and developments in that state of affairs at that time was the German government's decision to suspend Dublin returns for Syrian refugees back to states at the external border so Angela Merkel's famous Wir schaffen das moment which of course can't be left aside in no view here this moment is often in my view incorrectly described as an opening of the borders it was instead only a decision to suspend Dublin returns from Germany back to countries at the external border which would in many cases have been extremely difficult and in fact what is striking is that the outcome was really not an opening of the borders it was the opposite we reintroduced border controls because following that decision to suspend domestic returns Angela Merkel in Germany started facing increasing domestic political pressure particularly stemming from Bavarian politicians of the CESU party the Bavarian federal state in Germany had actually been dealing with high numbers of arrivals that were entering its states border with Austria and among starters in response the finance, the Bavarian finance minister at the time and CESU politician Markus Söder publicly stated that when the EU's external borders are not protected the German government needs to think about how it will protect German borders and that's where the logic is reversed so we needed Dublin because of in order to provide compensatory measures of Schengen and now the statement was if the Dublin operation is not fully functional we have to rewind Schengen but the logic is essentially the same and it's also what happened then two weeks after Angela Merkel's first decision to stop the returns internal border checks were introduced because of the domestic pressure at the German-Austrian land borders as mentioned at the beginning this led to a sort of domino effect Austria followed, Slovenia followed those countries originally wanted to avoid becoming sort of dead ends from where migrants could no longer travel on in total nine countries followed and six countries continued to have that control in place up until today the justification adduced at the time was fear of secondary movements of asylum seekers already then you can raise questions as to whether some countries then reinstating internal border controls is a structural answer that would have been needed to address those secondary movements but at least it can't be disputed that there were in fact large numbers of such secondary movements however, arrival numbers have actually started decreasing strongly as from mid-2016 and at current we are actually back to pre-2015 levels of arrivals for the EU as a whole and we also know that that has been reported on by the European Commission that the secondary movements as a result have in parallel become limited nevertheless and strikingly the recent justifications deduced including the one put forward this month of May still referred to a fear of secondary movements or to a security situation at the external border some member state politicians explain this weird justification by claiming that even if secondary movements are no longer there there is still a legitimate fear of such movements taking up again in the future because large numbers of migrants remain present in Italy and Greece but then we cannot address this continued pressure without reforming the Dublin system so in that way the debate also comes full circle or at least we are talking in circles what I think explains the continued internal border controls better than actual fear of secondary movements at this stage is their symbolic value and the instrumentalization of that symbolic value to give the impression of advancing a very tough immigration control policy. I won't go further into detail there but I am very interested to potentially discuss that with you in the Q&A session for now what I hope to have done is to already give an answer to how did we get here I'll take less time for the next question which is how do we move on and there I would like as already mentioned to discuss two scenarios with you which I have selected on the personal impression that they are currently the most dominant ones the most discussed ones as also already mentioned I'm not convinced by either I'm actually quite critical of both of them I'll outline why that is the case and then it's of course easier to say what is wrong than to say what should be done instead I really will also try to make an effort to provide some alternatives the first scenario is the one that has been in the running the longest although in different kinds of formats it's a scenario that can be entitled flexible solidarity that's also what it has been named by some of its proponents and it encompasses the idea that instead of taking on refugees from those member states who are currently overburdened the other member states can help by providing stronger financial aid or in other ways in operational terms by contributing to border control measures either in that overburdened state or in the context of relations and cooperation with origins of countries of origin and or transits. This scenario was first proposed I believe somewhere in 2016 by the four Visigat countries and they have also since remained its most vocal proponent. These four countries are also the countries that have from the very start refused any reform of the doubly system that would address the design flaw by providing a mechanism through which refugees would be moved or located in policy terms from the overburdened states to other member states typically states in northern western Europe or eastern Europe. They do not oppose such schemes and also to give the full picture there if premised on voluntary quotas of refugees so if they can choose how many they will take on they oppose the idea that such a scheme would be automatic and would have mandatory quotas. What originally was a bit striking to me or puzzling when the opposition first became clear is that and maybe to you too at least three out of those four Visigrat countries notably Poland, Slovakia and Hungary are themselves countries at the external border so they should have an interest in reforming and addressing the doubly system so that it has places less responsibility on the external border. However and what explains their opposition to some extent is that following extremely controversial and criticized policy practices including the building of fences and walls along their external border these countries are currently no longer experiencing the high rival numbers they were experiencing in 2015 and 2016 and their argumentation has been since that they cannot be expected to now participate in a relocation scheme that would be automatic and mandatory if a similar control is not established along the southern frontiers. So it's that and as mentioned they've come up with several proposals which they call flexible solidarity, increasing financial support, increasing operational support but not being obliged to taking refugees. Following the changing government, Austria changing government in late 2017 Austrian government has also started advocating for such schemes and other countries too. However these proposals have to date and as I stated at the beginning not been successful. We are and continue to be at a complete political deadlock to begin with and as is of course obvious they were strongly opposed by the countries in by several countries in the southern European sphere in addition and quite vocally German Chancellor Merkel has consistently also opposed such flexible solidarity IDs. She stated that they would amount to selective solidarity and that that would never be the way forward. It was there for very surprising and in the latest developments on this kind of scenario that we witnessed a shift in this German position in December 2018 through a leaked paper that was actually altered by Germany as well as France in which they indicated a new line much more aligned to the visual cut IDs stating that governments would still be obliged to take asylum seekers from other EU member states but exceptions could be made if countries made alternative measures of solidarity. That was quite clear why we saw that change in December 2018 was because of the urgency of still trying to move forward and still trying to come to some sort of a consensus ahead of the European Parliament elections that we have just had but as I mentioned in spite of this change in the German Franco position we did not manage to come to any sort of agreement My views on this while I agree that we really urgently need a reform I don't think we should be moving towards a flexible solidarity scheme premised on voluntary quota I think such voluntary quota and as opposition to the mandatory quota also by definition shows will likely not amount to very many actual relocation commitments so will likely not help the plight of other member states. Compensatory measures both financially and operationally are already provided to date and in quite significant ways but have not and continue not to provide the solution what the evolution of the Dublin system shows us and why I also spent quite some time on highlighting that to you is that we can actually not afford not regressing that earlier flaw it may be difficult it may take a long time but I don't think there are any alternatives it's because of the previous unwillingness to address the flaw when we went first cracks to the systems in the early and the mid-2000s that the E was caught unprepared in 2015-2016 if we continue to provide a half hearty solution and push the larger question away back into the future it will amount to repetition of the mistakes we have made in the past and will continue to greater or to smaller extents but always there to see difficulties in the operation of the system so I would argue that we need to continue investing all political capital available in moving towards the Dublin system that rectifies this earlier design flaw provides for solid responsibility sharing mechanism including one that is automatic and provides for mandatory quotas I would add that it will not be enough I also believe and I'm happy to be challenged on that afterwards that we need to think about providing a degree of choice to asylum seekers as to where they would want to go to not unlimitedly we can put several conditions in place we can look at which countries have not received large shares already but some kind of a system along these lines this is not a novel idea it's also not my idea it is already part of the current European Parliament report on the Dublin reforms that report has such a system in place it might not be a perfect system but the idea behind it that we should provide for some choice is a good one I think furthermore a bit more controversially I think after having received the recognition of the refugee status we may also need to consider whether we do not want to move towards a system where there is at least some free movement rights or opportunities for refugees perhaps again not unlimitedly but something more than what currently could be achieved through the long-term residence directive as a third element we need to move towards further harmonization of asylum procedure standards on asylum procedures on reception conditions etc and move away from the current sort of minimum harmonization levels so that's also the reception systems and procedure systems become more equalized across Europe and then finally this can be complemented by increased operational support amongst others and that already is moving in the right direction for instance from the part of Feazo as well as strengthened and more centralized financial support and other kinds of support I mentioned this as the last elements I don't think as already mentioned that we should do this instead of taking on refugees nevertheless it's an important element of providing a holistic solution to the situation I hope I still have time for my second scenario I'll try to keep it shorter but it's an important one too it's one that increasingly is gaining ground and it amounts to making access to the Schengen zone and additional incorporation within the Dublin system it has not been circulating as long as the flexible solidarity ID or at least not explicitly but of course the logics are not new and could come across as sort of intuitively sensible considering the history and that's also why I spent some time on that part of Dublin as an instrument of possible security losses stemming from the establishment of the Schengen zone and as we know those logics also defined how the problems in the Dublin system spilled over in the Schengen system so working around that logic could at least on first sight be perceived as a good ID and perhaps from that point of view it's also surprising that at least publicly it was never voiced before until very recently French President Macron's so-called renaissance statement earlier this year on March the 4th in which he called for a rethinking of the Schengen area stating and now I quote him that all those who want to be part of it of the Schengen system should comply with obligations of responsibility that is stringent border controls and solidarity and silent policy with the same acceptance and refusal rules the ID of making participation in the Schengen zone conditional on Dublin has since that speech apparently been gaining ground both in public comments and that I can comment on as well as in policy circles in Brussels notably in the European Council among others Dutch Prime Minister earlier this month stated that if Eastern European countries continue to refuse solidarity they will need to start feeling the consequences in order to make them start feeling those consequences and in light as well of the value that those countries attached to their membership to the Schengen area the Schengen zone needs to start in his view to start functioning as a political lever and he added more detail in comparison to what Macron had stated he highlighted that it was not possible to push the countries out of the Schengen system or to expel them because this would require a qualified majority vote and he is correct there and so what he contemplated instead and reportedly he stated so together with the French and German state leaders was the possibility of jointly reinstating border controls along all of the borders separating west from Eastern Europe so crossing the country continent north to south in short an eye for an eye a tooth for a tooth kind of policy idea I would say in contrary to the underlying theme of Macron's speech where the idea was first to dance i.e. providing European renaissance this would amount to the opposite of what European renaissance would look like it would instead be the start of reinstatement of east-west divides on the European continent that until recently we were able to consider as a thing of the past in addition to that and also extremely problematically it would be a clear violation of European law already at the moment the internal border controls that are being upheld are subject to charges including by the European parliament and by many analysts of constituting unlawful behaviour first because their justifications do not live up to standards secondly because it's questionable to compile different legal bases as these member states have been doing that's a bit of a technical discussion but already they are on the edge of what is lawful behaviour and it might already be unlawful behaviour if we started reinstating border controls fully from north to south with as the main justification that they can serve as political lever it's fully clear to me that that would be a direct violation of the current Schengen borders code on what basis then with the western states enacting these controls still be able to claim and still hold the legitimacy to do so that the eastern European states are not playing fair and are not doing their share so I think it would be the start of a slippery slope down towards power politics that's right roughshot over commonly agreed to rules and that do not promote actually counteract a spirit of intra-European solidarity in addition the Schengen is in my view way too valuable to be instrumentalised in this way with the risk that the mechanism backfires your barometer surveys of the past years have shown that across the board EU citizens consider the Schengen free movement zone as union's most important achievement even more important than bringing about peace amongst the member states so imagine if we lost the Schengen zone or if we had a really hollowed out version of it meaning for the legitimacy of the European project as a whole both on the western side of the divide that is contemplated where the European project is under strain as well as on the eastern side where according to Paul's the majority of the population in those countries still supports the European Union membership of their country in spite of successes for such parties as the Fidesz party so I'm very critical of the idea what I do understand and what I think informs this idea is the frustration at not getting anywhere in the face of continued opposition from particularly the Fijikata countries but what we should do there then instead and if it has to come to a split between Eastern and Western Europe on this file that's at least do so by playing by the rules and there are rules that we can use for that those are the rules of enhanced cooperation which would allow those countries to consider about their willingness to move forward to move forward and those countries who want to stay out to stay out the rules are there on enhanced cooperation they are currently in article 20 TEU and interestingly their first cooperation into treaty law dates back to the Treaty of Amsterdam 1997 1999 and that was done against the background of the accession that was going to take place in 2004 including the Fijikata states that we have at the moment and because of the foresight that with these not particularly those countries but with many more countries joining it would become more difficult to find consensus to make decisions and we needed more flexibility for those countries who want to move forward to move forward it's legally possible according to the rules as they stand which would require that at least nine member states would need to participate that should not be a problem if the northern western European states that say they want new solidarity are through in that sense no member states should be excluded from the scheme if it would want to participate that should also not cause a problem immediately the council would need to authorize the endeavour by means of a qualified majority vote that should also be possible and importantly enhanced cooperation meaning the legislation cannot be adopted through the usual decision making rules which is also the case at the moment it might be a bit more difficult there because according to treaty law rules we can actually vote on the W reforms with qualified majority that's not being done because of political consideration the council prefers unanimity so technically you could say it's not at the last resort stage it's a vote by qualified majority voting we might still be able to do it but in the past there have been court of justice rulings in which the court has shown that it's quite lenient in its interpretation of what constitutes a last resort stage in legislation so I think also here we shouldn't have any problems that enhanced cooperation could take several formats include several states and by stating that ideally and in my view I would like to see the legislation with them follow the lines of what I highlighted earlier as an alternative to the flexible solidarity scheme i.e. structural responsibility sharing mandatory quotas a degree of choice of refugees joint legislation beyond minimum standards increased financial operation supports and a degree of free movement rights I hope we have given now a lot of ground for discussion thank you for listening thank you very much Marie you have gone over time but I think it was worth it you've given a very comprehensive and rigorous analysis of how we've got to where we are with this whole problem and I particularly like the fact that you haven't just left it there with an analysis of the problem but you've gone on to talk about the potential solutions as well none of which is ideal or problem free but that's what else is new I found it interesting that you come back to enhanced cooperation because as you said the link between Schengen and Dublin was there from the start and Schengen really was a kind of an early example of enhanced cooperation because it was a treaty drawn up between a number of member states less than the complete number of EC member states at the time and in fact the reason that you have the Schengen Treaty which is outside of the EC framework as such initially it was and you have the Dublin Convention the original convention which was an instrument between the member states all the member states is because the whole idea of possibly having border free movement the EC as a whole was still alive at that stage and the whole debate was going on with the UK about whether it was sufficient to put all your legs in the basket of external border controls in order to enable free movement to take place border free within the EC area and of course Britain famously held out against that idea and we as part of the common travel area went the same road as they did I think it is what recalling that and you mentioned this yourself that at the time the Dublin Convention it was a very different world as far as asylum seeking was concerned and as you said there were no overland entries into Europe from problematic places from an asylum seeking point of view there were no overseas into regular ports the kind of things we've been seeing in the Mediterranean unfortunately in recent times so you're basically talking about controls at airports and proper seaports and there were genuine concerns about asylum shopping particularly on the part of the better off member states because if you could move freely once you got into the EU with any considerations about the likelihood was that the vast majority of asylum seekers were going to move to the better off member states where they could expect a better standard of living so I think there is a lot of background to the reasons for the rules in Dublin but of course it's been completely overtaken by events not least since the Arab Spring and the Syrian War but even before that as you have also mentioned so I'd like to throw the floor open for questions comments discussion at this stage and just to say briefly before I do that if you do want to contribute could you please just give your name and indicate if you're affiliated to any organisation or group please Hi, the British Network part of the ESRI Thanks Marine for the presentation we enjoyed a lot my question might be an obvious one a little bit but I'm just wondering if I could get a comment from you about the problems that you're talking about in the context now of the election that we've just seen are the solutions that you talked about are any of them more likely or less likely now the two big takeaways I think just in the context of opening from the election for me at least were that we've seen increase in greens the Liberals in the European Parliament and to overtake what it being that we've seen reinforcement of the policies in place in Poland and Hungary especially in Italy as well so in that context I'm just wondering when we have an appointment perhaps over a compromise candidate as commission president for example and the best thing that has been spoken about now is the possible compromise are those kind of changes going to make some solutions that you spoke about possible solutions and more or less likely thank you, it's an interesting question indeed and one that I reflected on as well and I followed of course the elections with great interest I believe however that really where the weight of the discussion lies at the moment is still in the council we saw it in the past already that the parliament was able to come to a common understanding of what the Dublin reforms had to look like and the big question is now in that respect if that parliament report will still be upheld in the next parliament term depending also on what the committee of presidents decides in that sense but for both scenarios of course the parliament is important and the council will have to look at the parliament for whatever moves it makes in this respect but I think at this stage the discussion is still very much council centered and we're still not getting out of the discussions between member states so whilst elections are important they're not immediately effecting I think the debate at this stage but of course later on if either of the scenarios becomes more dominant or any of the alternatives then it would come to play again that remains to be seen please my name is Mrs. Mary Kelly I am the member of the institute thank you for the presentation my question is with the Schengen area court in terms of people but the EU citizens who look like me black EU citizens wait a while I don't have any assessment of that how does that affect them and the reason I'm asking you it's because I no longer travel freely especially from that area because I'm travelling under the influence of being black I find myself being questioned my citizenship being questioned because of that and in terms of the Schengen area the Dublin regulation you are saying you acknowledge that it's no longer waiting but people are holding on to it only comment it suits people to hold on to that because they take less responsibilities this thing of fair share of responsibilities in terms of EU member states or the Dublin was created so that people will be going around shopping for asylum now it's going on the other way around the EU member states are going around shopping for asylum seekers which has got the characteristics that suits the country and that is wrong if we look at the beings on the side of human beings instead of policies look at the human suffering instead of policies you make a point of that you think that asylum seekers should choose where they go I agree as you're saying it's very controversial but we are where we are and this is globalization and no one can not go back asylum seekers I think there is a problem where they think people are asylum seekers because they are called refugees asylum seekers they lack intelligence and they don't have a free will which everyone was given they do the circumstances doesn't allow them but they do have that free will on that respect because of globalization people should choose where they go within boundaries within rules every country has got its own rules you have to come and say to the country I want things to be like this we respect that but sometimes when rules are made are made as if people because they are refugees or asylum seekers they lack they don't have intelligence they do and I think if we look at the things when the policies are enacted look because those people are in these places are talking among themselves and because their voices are heard among themselves they start to believe that what they are talking about is right but they don't look on the other perspective interesting points and generally I take them but quick reactions to them I think the first point you made was questions on racial profiling in internal border checks and it's true they are happening particularly problematically amongst others at German land borders there have been reports as well of racial profiling in flights leaving from Greece to Germany and they are remaining under the radar and it's really a problem the only newspaper that has seriously reported on it and I would welcome to laud it is the Financial Times which gave a full article to the problem there in the summer of 2018 and I continue monitoring the news I might have missed things here and there but it's surprising I agree with you that this is not receiving more attention and that this is not being more seriously addressed as well by other institutions I also agree that shopping for asylum seekers so the converse kind of logic is equally problematic we saw this particularly happening happening from the side of the fish cat states there are also difficulties with the kind of even within the relocation mechanism the ad hoc one that was adopted earlier the kind of criteria that were used for identifying the kind of asylum seekers that would be eligible for relocation there are problems there that indeed need to be addressed as well and then it was clear that like I agree that we should take into account asylum seekers free will or that we should allow for some degree of choice it's only acknowledging the reality that indeed people have their own ideas of where they want to go and if we think that that is not the case we will just go for a system that will not work and we will be proved otherwise by reality anybody else Thanks Joan, that was a really interesting talk and a very simple one that we made as well it's good to have human being in the central of this can I just tease through your solution your enhanced cooperation solution and so what I have to do to say was that the current water controls internal water controls can be introduced within the sharing area, not to the EU law and therefore wouldn't sustain for example the Commission or another member state to join the EU and yet you're suggesting that a core group of countries within the sharing area would have to enhance their cooperation so what you would have is a core group of countries as I understand it from you enhancing their own internal cooperation but not being able to do any external water controls as long as they were within the sharing and oversharing area so it seems to me that that could be a problem and I wonder would you like to address that and then secondly as I mentioned to you earlier the core problem here is one of trust between member states trust that countries will apply the rules correctly trust that countries will take people back those trust arrangements have broken down most fundamentally perhaps because of what Joan made in 2015 whether you agree with that decision or not so the question is are there any measures that can be taken to help enhance that trust between member states and I speak of course on the happy knowledge of our countries that's not a shame and so we don't at the moment have this issue and we can opt in as the consideration very interesting points and thank you indeed I consider that as well because that could be some part of a problem in my enhanced cooperation ID but how to address it or at least part of the solution enhanced cooperation would not mean going back on the previous commitments that is also prohibited so the current Dublin system in all its flaws and the current Schengen arrangements as well would continue operating vis-à-vis the Fischicad states as well presumably them being the one outside of the enhanced cooperation so I still think and so under the Dublin arrangements that will still continue to hold as they stand first of all there might not be many asylum seekers moving from western Europe to eastern Europe if we look a bit at the figures now so from that point of view there won't be difficulties sort of continuing to having the border open and then conversely people moving from the east to the west and then starting rules as they still hold you would still be able to transfer them back to the east then you can also say but to what extent is this going to be feasible without the border control in the middle to check that on the other hand it is really going to be I know my answer is fully imperfect but is it going to change anything to the current state of affairs in any way it's really the flaw in my I'm happy you addressed it but I still believe the solution is the better one in comparison it's true that maybe in a way yeah the eastern states get away with it they don't have to cooperate and they don't have to have enhanced rules but they're currently getting away with it anyway and the alternative is to not let them get away with it by making shen conditional on Dublin and it seems that that is the dominant mode but that is in my view problematic for reasons I outlined so within two imperfect scenarios I still choose enhanced cooperation one there might be a killer app that will enhance cooperation of course not likely for the future but yeah and how to increase trust my answer at this stage I don't see any measures because I think the situation is so problematic I sometimes wonder as well particularly if I look at the Dublin and the Schengen versus Dublin arrangements to what extent also the Northern Western European states and also if you look at the shift in position of Franco-Germ France and Germany are serious and true when they state that they actually really want to participate in intra-EU solidarity mechanism because we also know we're all looking at the visual cut states who haven't done their share in the relocation system but we also know that the Northern and Western European states didn't do so good either and so I think it's also sort of time to drop the masks if possible and that would also be something that would be achieved with worst case in this cooperation not getting anywhere so either it gets somewhere and step by step trust is rebuilt with those countries in Southern Europe and Northern and Western Europe slowly but surely within a system that excludes Eastern Europe either this doesn't work but then we also know where we stand when it comes to the commitments of Northern and Western Europe and then that completely changes the game again I mean lack of trust or lack of complete trust there's always been a factor in all this even in the architecture of the Dublin Convention I think it's there it's certainly there in the fact that Britain stayed outside of complete free movement border free movement because they didn't have concerns about particular airports in Europe at the time which will be nameless any other questions? Just an observation to agree to that just because numbers are down at the moment just if one never knows what's going to happen at any moment so it is I agree really important to try to produce some sort of solution and enhance cooperation originally would be properly officially a new rule so I think that's the important factor I think the real question is to what extent does your scenario with cooperation add on to what extent does that address the problem in the round significantly better than the first scenario I think that's the question and you clearly believe that it would be an improvement on what's there at the moment and an improvement on the first scenario or are you saying it would be better than the first scenario? I think it would make things clear in comparison to where we are at the moment I'm actually not super optimistic about splitting Europe in this way but if we're going to have to move to a split which is better than just continuing to do what we're doing now let's move to it in a rule based way anybody else? I think we're past our time for finishing so if there aren't any other questions wind it up there I want to thank you Marie once again for a very comprehensive and a very searching analysis of the problem which is a really difficult one and there are no easy solutions I don't think you can be criticized for the fact that your attempts to come up with scenarios had flaws in them I don't think anybody would have a solution to deal with this question marks or flaws that could be raised about it so I think it was very useful and particularly useful because you would go into the area of what might the road be to a possible solution often when problems like this particularly difficult ones like this are discussed we get all about what the problem is but nothing about what the solution is I think it is very useful that you went in you took that further step and got into tricky territory but it was well worth doing it and I think any of the people here who are involved in this either on the government side or on the NGO side I have lots of food for thought on the basis of your presentation and your responses to the questions and answers so thank you very much indeed


From New York, it's theCUBE, covering Blockchain Week. Now, here's John Furrier. Hello everyone, I'm John Furrier, we're here on the ground in New York City for Consensus 2018's Blockchain Week. I'm here with David Siegel as the CEO of the Pillar Project, also the author of the token economics handbooks. Entrepreneur, mentor to companies. Thanks for coming on. Thank you, John, great to be here. So I'm excited to talk with you because I've been staying all week. I love token economics. It's a core part of the business model. Disruption is part of the key formula where blockchain shines. It's where the rubber meets the road, as some say. So, let's jump in. You know, how much is being discussed here about that? I mean, obviously, ICOs are well-known and people are looking at that road, but token economics, the importance of it. First, I think it's important to understand we're at the very beginning of this. It's a steep learning curve. We have these old Model T tokens called the ERC-20 token, which we will get rid of and build better things. We have models that are mostly based on old, you know, whenever there's a new technology, we first imitate the old stuff until we see what the new. So one of the really exciting new things that's come out of this is effectively the Ethereum model where you raise some money, you build a system, and it's open source, it's free. Anyone can take it and do anything with it, but it requires its own token to work, and the people who sell those tokens, you sell about 70% to your funders, and that creates the economy, but you hold about 30% back, and as the value goes up, as the network effect kicks in, and as these things rise in value, your 30% funds the project indefinitely after you run out of the first. So that's a pretty exciting model.  You have no business model. You have no income model. You're totally open source, but your token powers your platform, and you have some tokens in your back pocket. And the general formula you see is 70, 30. Roughly is that just a pattern? That's normal. Now that's in a single sale, and what we see now in an ICO land is free sale, and then the big sale. I think we'll go to a more staged model because I think too many companies are overfunded, too many projects are overfunded, $240 million for status, and maybe we don't need that much to start a project with a white paper. So I think we're, I hope we'll go to a staged model. Where you maybe- Explain staged model. Like at launches or- Yeah, you might sell 20% and raise, what do you need to get to first base? Three million to show a minimum viable product and get traction. Yeah, makes sense. You know, what projects need more than three, maybe four, I mean, you don't need 20 million. And then you do that, but now you've got 80% of tokens in reserve. So now things are going well. Your token has gone for, let's say, five cents to 20 cents, and you can sell another 20%. So the funding of the platform as the token economics kick in, for your other example, that 30%, 70 goes to raise, and 30% funds the platform indefinitely. Yeah, that's typical. If you do the staged approach, what you're saying is there's more power in reserve to fund the platform. Because if you- Also- If you get to first base, you might get to second. I think investors have been too gullible. And they're looking at these 50, 80, $100 million raises and going, oh, me too, I have fear of missing out. I want to get in on that too. That's the big deal of the day. That is the one that's probably going to have lousy returns, right? These things are overfunded and not, there's no real give and take with the market. You know, to get, like nothing ever really works the way you planned. No business plan is ever worth anything. Think of, you know, Google, Apple, Microsoft, their first business plans are for something else. So find groups of people that you can give money to, not too much, get to first base, get some traction, make something, listen to the market, continue to build what people want. And then your token will rise and then you sell the next- So I got to ask you- It's very much like venture capital, right? We do it in stages. It's pragmatic, it's the right way. I think an investor and the entrepreneur, by the way, your point is also valid because like venture capital, if you take on too much money, you could actually fail, you're not optimized. And we've seen that before. It's not a good allocation of capital now. We got a lot of innovation to do. Wouldn't it be great if we could do a thousand projects at like two or three, four million dollar level and see which ones come out of that and then give them more. David, let's walk through a use case. So I'm a entrepreneur or I'm a growing business and I maybe bootstrapped it or maybe took a little bit of seed funding and did some cloud technology open source and whoa, I got a product. And I go, you know what? The growth strategy for me as a company is to use token economics because I got a decentralized use fit there. And I see a way to scale and grow with tokens. How should I set up my token economics? I got security tokens, I got utility tokens, do I do a service vehicle? It just sounds so complicated. I'm making funny faces, John, because I see too many tokens where we always say and I'm a token designer, well, what does the token do? Well, the answer is it raises money. That is the number one answer. It raises money. Well, does it actually do anything for the token holders? Well, I'm not sure. Maybe it gives you access to the system. Is that a good answer? So I think actually we should be turning most of these token sales into equity sales. And that's a different kettle of fish. So I honestly think people misunderstand the ICO concept and we should think of ICOs as we know them today as project finance, not corporate finance, not company, not startup finance. Startup finance should be done with equity. Equity is something you hold very dear. There's only a hundred percent of it. You sell it only if you need to to get to the next level. And equity means your shareholders are along for the ride. They may have to vote you out of your job at some point. Having me before. That's venture capital. You may be acquired. You may, any number of things can happen to equity. And project finance is different. So the Pillar project is an open source project. It's a nonprofit foundation in Switzerland. No one owns it. It can't be bought. Our goal is to do one project that we set in the white paper. We are on track to do that. But if for some reason we couldn't do that, I think the money should go back to the people who funded your white paper, not some random ride off in the hay. David, take a minute to talk about the Pillar project. I was going to get to that. Let's go to that. What's the Pillar project about? How did this come to life? What's the current status? So the Pillar project is a good example of an open source nonprofit project that uses tokenomics and is not a company and has no equity. We have a token that will give you access to our wallet which is coming this summer. And the wallet's meant to be initially just a cryptocurrency wallet like many others but with so many differences, John. So for example, there'll be a name lookup, an address book, and you'll find me by name and you'll send me tokens, currencies by name or you'll trade with me by name. You'll never see an Ether address. You'll never see a Bitcoin address. No phishing, no hacking, no wacky cut and paste errors and mistakes. For example, the Blockchain Explorer will be built into our wallet. So as you send me something or trade something, you'll be getting status information all the time. You'll never go to a Blockchain Explorer. All these nice things are built in. We have lots of features for your mom to make it easy for her to understand and keep it very simple. I think you abstracted away some of the complexities. We've added complexity on the back end to do the services that make the front end very simple. Okay, got it. And it's current status of the project. We'll be shipping the first, well, we raised money last July. We had a $20 million funding last July. That has gone up because Ether has gone up. We've got about 50 people full time. We're in London. So your first base or second base? We'll be on first base in July. We've got to get our product out the door. So what's the wallet? It's a wallet to start with, but also it will help you manage your personal data. It will help you be GDPR compliant. We'll have an exchange and we'll be doing equity ICOs. We'll be doing in the wallet. We'll be doing, for example, with the utility ICO, you'll issue your token. You'll sell it to people. They'll buy it in the wallet. And then trading will be immediate. You'll be listed. Everything right there. Don't move stuff around. We're trying to create a place that's safe for consumers. Got it. So Nuts, I love this concept about open source and it's kind of threaded. Some people are open source guys like me and you who have seen that movie go from radical and second tier citizen to primary tier power in the world. As blockchain takes a community focus, we're seeing the same business model that made Red Hat very famous. That's the power in the Linux foundation. This notion of projects and open source is a distinction between project and product. Upstream projects, a community, downstream products, downstream activity is where people productize the project. I see a pattern happening in this world where you're starting to see some of that. Interesting. Your thoughts on this because that's ethos has proven this world has got a lot of growth to it. Are we seeing this open source ethos and principles architecting in some of the successful crypto projects? I would take this productization analogy pretty far because it's true in the profit world too. It's true startups often do this as well. It's a service. You get better at it. You productize it. That's pretty common. So I think that's part and parcel of just solving customer needs and then scaling, right? The nonprofit thing or the open source thing is different because you can't make money on your open source thing. You've got to find another way, right? And here in blockchain world, we're using scaling effects and tokens. So let's go to tokenomics, where you can start an ecosystem fresh with a token that has no value and ether had no value on day one, right? But it's almost no value. And through network effect and use and the fact that it's a limited number, the limited number is important. The limited number makes it so that it's scarcity, right? It's got value to people who can see, oh, later it might be worth more. So you've got both natural buyers and speculators coming into a system. And this is what's giving the SEC a hard time because they can't see whether it's, is it a security or is it like a gym membership? It's a serious problem because they don't understand it. They're causing a lot of, there's a ton of growth in my opinion. But the thing about token economics is what you're getting at. And this is where I kind of squint through the noise. I understand internet infrastructure.  Google has cost per click, all that apparatus doesn't work for network effects. So if you look at network effects as being the main value proposition of most of these opportunities, why would we use an e-commerce stack, an old model? Because how do you measure networks? Tokens are becoming and wallets are becoming a key infrastructure. I see this coming. And I see the network effect tokens becoming both an instrumentation vehicle and a transactional currency opportunity. So this is dynamic that blockchain could really, and token. So I think the huge opportunity, John, is that instead of fake news and fake everything and fragile DNS systems and things that are centralized, we can decentralize things now with a token at the center that puts skin in the game. And a great example is science. We do science pretty badly. It's whoever can get budget for whatever wacky project. And if we had a betting, a side bet system where people could bet on the outcome of projects, even when you propose them, the people who make the decisions of whether to fund these things could look at the odds first of what the crowd thinks. And if the crowd is right about the outcome, the winners take the money from the losers. And this skin in the game concept is being used. It's a marketplace. The market dynamics of what you just said, I think is very important. This changes the evaluation structure based upon new information. So the price of fake news is almost zero. And we saw that in the last election. We see that in Facebook every day. We see that on the front page of the New York Times. The price of fake news is close to zero.   Well, we have to bring you on board the cube project that we're starting. We're tokenizing our platforms. And we think about this all the time. It's very cutting edge. David, really great to have you on. Talk about the book, where can we find it? Are you on media? One quick thing, we're going to have token camp coming up in Lithuania. We've got a one week workshop and unconference in Vilnius, Lithuania. I know that sounds like nowhere. What's the date? It's July 15th to 22nd. It's free. Pillars paying for it. It's at a resort. We're taking over a resort with crazy crypto people, skin in the game tokens, token camp. We've got a business agility camp for entrepreneurs, for investors, for coders. We're going to do, in fact, I can just announce right now that we're doing a hackathon with Radix, an incredible new blockchain, and a bunch of interesting people. Lex Oakland will be there, Vinay Gupta. We're going to have learning, learning, learning for seven days and seven nights. That's a resort in Lithuania. It's all one compound. Yeah, we're taking it over. And there'll be a little golf. But it's good for families. We did it last year. I checked it out. It's got a lot of lake there, too. You got a lake. It's got golf courses. It's going to be really fun. And we did it last year, and people were learning until one o'clock in the morning. That's the capacity you're looking at for that event. 500 people. So intimate. So very intimate. It should be perfect. We're going to be blasting out. You should come. We're going to be blasting out on 4K. We've got enough bandwidth to send to YouTube and to wherever else you want to distribute video. You can be part of the media center. Awesome. Well, David Siegel, great to have you on. Final question, your takeaway from Blockchain Week. Obviously new entrants are coming into the system. Community's booming and still tighten it. But now you have finance, you have tech, and you have developers all coming together. What are your thoughts of the show this week, Blockchain Week? Yeah, one thing. The demos are pretty lame in general, I think. We still aren't paying much attention to user experience at all. I think the enterprise guys have a lot to learn because they're kind of playing their normal enterprise game, and it doesn't look so good here. Yeah, Jason was talking about the blockchain washing. Basically, putting the Blockchain. We added Blockchain to this enterprise project. And look. Is that real dynamic in your opinion? I think they're figuring it out. I think some of the academic and some of the white paper stuff I've seen is okay. And commercializing it, they're on the path to learning how to commercialize it, but they're not part of us. They're not, they'll never be crypto anarchists. Okay, fine, but they don't really seem to get us and to be part of it. It's amazing to see a conference where IBM, Microsoft, these other big names are Deloitte, in their own little pockets on the side and no one's paying enough. It's a toe in the water for them. They're not paying much attention because you go in there and it's a normal marketing jargon and brochures, and it doesn't feel like they're really engaging. I'd love to see more engagement with our community. And they've got to really get engaged in. The good news is for IBM, at least, they're part of the Linux Foundation, the Hyperledger project, so we're seeing some open source is there. I'd like to see more thought leadership, more real. Publish some papers, come to our conferences and give us some substance. Well, I mean, I talked to Michael Dell and Pat Gelsinger, for instance, and they are into blockchain. Michael Dell's watched a lot of videos. He'll probably watch this video. They're learning, and the statement is, what they're doing is they're giving it to their R&D teams. So Office of the CTO, they're not really, so it's very academic to your point. They haven't really operationalized the ethos. You know what, it's time for experiments. There's no way you're going to blockchain your whole company, your whole supply chain. It is time for experiments, and it's time for guys like Michael Dell to jump in and say, we're- What's your advice to Michael, what did you tell him to do? It's time for experiments. We're going to do some things. We're going to try some things. We're going to partner up the Hyperledger stuff. You know, try more than that. Don't just be going to meetings and summits and top down. Try some bottom-up stuff. Empower your employees, Michael.  They might even not be, they might be quasi-legal, but if it's an experiment, you're going to learn something, and then you can talk to the lawyer. Don't have the lawyers and the management say what the program is. Because that'll put it in a box. They won't get it. They won't get it. They'll stop the action. They won't find that- Ask for forgiveness, not permission. Ask for forgiveness. Go do it.  David, great conversation. We could go for another hour. You're going to be a regular, I can tell, on theCUBE. When we do our live format, we're going to certainly have you back. Keep in touch. I'm John Furrier here at Blockchain Week and Consensus is wrapping up the day three of coverage. I'm John Furrier, thanks for watching. Be right back.