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21. Trade policy issues in the Wider Europe – that led to war and not yet to peace

Author:
Michael Emerson
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper looks at the trade policy landscape of the EU and the wider Europe, with a focus on issues arising from the signature on 27 June 2014 of Deep and Comprehensive Free Trade Agreements (DCFTAs) between the EU and three East European countries (Georgia, Moldova and Ukraine), and actual or prospective issues relating to the customs union of Belarus, Russia and Kazakhstan (BRK), and the Eurasian Economic Union whose founding treaty was signed on 29 May 2014. While the contrived collision between these projects has tragically induced Russia to break all the established international security norms by waging war against Ukraine, the present paper deals essentially with trade policy issues. The huge expansion of intercontinental free trade area negotiations currently underway, in which the EU is an active participant alongside much of the Americas and Asia, stands in contrast with Russia's choice to restrict itself to the Eurasian Economic Union, which is only a marginal extension of its own economy. Alone among the major economies in the world, Russia does not seek to integrate economically with any major economic bloc, which should be a matter of serious concern for Moscow. Within the wider Europe, the EU's DCFTAs with Ukraine, Moldova and Georgia are a major new development, but Russia now threatens trade sanctions against Ukraine in particular, the economic case for which seems unfounded and whose unilateral application would also impair the customs union. The Belarus-Russia-Kazakhstan customs union itself poses several issues of compatibility with the rules of the WTO, which in turn are viewed by the EU as an impediment to discussing possible free trade scenarios with the customs union, although currently there are far more fundamental political impediments to any consideration of such ideas. Nonetheless this paper looks at various long-term scenarios, if only as a reminder that there could be much better alternatives to the present context of conflict around Ukraine.
Topic:
Economics and International Trade and Finance
Political Geography:
Russia, America, Europe, Ukraine, Kazakhstan, Asia, and Georgia

22. Flexibility clauses in the Stability and Growth Pact: No need for revision

Author:
Stefano Micossi and Fabrizia Peirce
Publication Date:
07-2014
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The policy debate about how best to restore growth in the flagging eurozone economy has been plagued by demands from some highly indebted member countries that the Stability and Growth Pact (SGP) be loosened to leave greater room to support the economy with budgetary instruments. These demands have been met with an instant rebuff from the Commission and other financially solid members who argue that loosening the Pact would do little to restore sound growth. This question has also hindered the broader discussion on the need for and content of a renewed growth strategy for the eurozone and the European Union, no least by fuelling fresh mistrust among their member states.
Topic:
Economics, International Trade and Finance, and Reform
Political Geography:
Europe

23. Ukraine, Russia and the need for more flexibility in EU foreign policy-making

Author:
Steven Blockmans
Publication Date:
07-2014
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The downing of Malaysia Airlines flight MH17 over eastern Ukraine has unleashed a storm of grief and anger in the EU and around the world. Heads of state and government have joined the public outcry and called for tough action against those directly and indirectly responsible for this heinous crime. The EU's reaction, however, has been lame so far by comparison.
Topic:
Foreign Policy, Territorial Disputes, and Sanctions
Political Geography:
Russia, Europe, and Ukraine

24. Trade policy issues in the Wider Europe - that led to war and not yet to peace

Author:
Michael Emerson
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper looks at the trade policy landscape of the EU and the wider Europe, with a focus on issues arising from the signature on 27 June 2014 of Deep and Comprehensive Free Trade Agreements (DCFTAs) between the EU and three East European countries (Georgia, Moldova and Ukraine), and actual or prospective issues relating to the customs union of Belarus, Russia and Kazakhstan (BRK), and the Eurasian Economic Union whose founding treaty was signed on 29 May 2014. While the contrived collision between these projects has tragically induced Russia to break all the established international security norms by waging war against Ukraine , the present paper deals essentially with trade policy issues . The huge expansion of intercontinental free trade area negotiation s currently underway, in which the EU is an active participant alongside much of the Americas and Asia, stands in contrast with Russia's choice to restrict itself to the Eurasian Economic Union, which is only a marginal extension of its own economy. Alone among the major economies in the world, Russia does not seek to integrate economically with any major economic bloc, which should be a matter of serious concern for Moscow. Within the wider Europe, the EU's DCFTAs with Ukraine, Moldova and Georgia are a major new development, but Russia now threatens trade sanctions against Ukraine in particular, the economic case for which seems unfounded and whose unilateral application would also impair the customs union. The Belarus-Russia-Kazakhstan customs union itself poses several issues of compatibility with the rules of the WTO, which in turn are viewed by the EU as an impediment to discussing possible free trade scenarios with the customs union, although currently there are far more fundamental political impediments to any consideration of such ideas. Nonetheless this paper looks at various long-term scenarios, if only as a reminder that there could be much better alternatives to the present context of conflict around Ukraine.
Topic:
International Relations, Diplomacy, Economics, and International Trade and Finance
Political Geography:
Russia, Europe, Ukraine, and Kazakhstan

25. Was the ECB's Comprehensive Assessment up to standard?

Author:
Willem Pieter De Groen
Publication Date:
11-2014
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The Comprehensive Assessment conducted by the European Central Bank (ECB) representsa considerable step forward in enhancing transparency ineuro-area banks' balance sheets. The most notable progress since the previous European stress test has been the hamonisation of the definition of non-performing loans and other concepts as well as uncovering hidden losses, which resulted in a €34 billion aggregate capital-chargenet of tax. Despite this tightening,most banks were able to meet the 5.5% common equity tier 1 (CET1) threshold applied in the test, whichsuggests that the large majority of the euro-area banks have improvedtheir financial position sufficiently to no longer constrainthem in financing the economy.Our own estimation based on the detailed results, however,provide a more nuanced picture, with a large numberof the banks still highly leveraged and in many cases unable to meet the regulatory capital requirementsthat will be introduced in the coming years underthe adverse stress test scenario.
Topic:
Debt, Economics, International Trade and Finance, and Global Recession
Political Geography:
Europe

26. The EU's Enlargement Agenda — Credibility at stake?

Author:
Erwan Fouéré
Publication Date:
10-2014
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
It is a damning reflection of our times that one of the EU's most successful foreign policy achievements has never been under so much criticism. During the recent elections for the European Parliament, populist eurosceptic parties were in the forefront of those campaigning against the EU's enlargement agenda. Their attempts at equating further enlargement with the dangers of increased immigration from Turkey, the Western Balkans and even other EU member states were bolstered by the leaders of some long-standing member states, such as the UK, openly calling for restrictions on freedom of movement — one of the fundamental pillars of the EU.
Topic:
International Cooperation, Governance, and Reform
Political Geography:
Europe, Turkey, and Balkans

27. Does ASEM work?

Author:
Jacques Pelkmans and Weinian Hu
Publication Date:
10-2014
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
This CEPS Policy Brief is based on a larger study for the EEAS and European Commission, written by the same authors in the run-up of the Milan ASEM summit of 16-17 October 2014. The main idea of the study is to assess whether ASEM works and how, by verifying the factual evidence in detail. After all, ASEM has no institutions, no budget and no treaty, whilst dialogues and a loose improvement over time in Asia-Europe relations refer to process much more than genuine 'results'. The stocktaking covers all ASEM activities since the 2006 Helsinki summit. Summit and foreign ministers' declarations and ASEM calendar of activities (and interviews) are used to trace ASEM activities in the three ASEM pillars (political, economic, and peoples-to-peoples/cultural). All the 'regular' ASEM meetings at ministerial and other levels (many of which are only known to relatively few) have been mapped. Also the ASEM working methods, based on the 2000AECF framework and many subsequent initiatives, have been scrutinised, including whether they are actually implemented or not or partially. Such methods refer to how to work together in areas of cooperation (beyond the typical ASEM dialogue), organisation, coordination and ASEM visibility.
Topic:
International Cooperation, Regional Cooperation, and Governance
Political Geography:
Europe and Singapore

28. Russia's Punitive Trade Policy Measures towards Ukraine, Moldova and Georgia

Author:
Michael Emerson, Denis Cenusa, Tamara Kovziridse, and Veronika Movchan
Publication Date:
09-2014
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
While EU and US sanctions against Russia over its aggression in Ukraine, and Russia's counter-sanctions, are much discussed due to their evident political significance, less attention has been given to Russia's punitive sanctions against the three Eastern European states – Ukraine, Moldova and Georgia – that have signed with the EU Association Agreements (AA), which include Deep and Comprehensive Free Trade Area (DCFTA) provisions. This paper therefore documents these trade policy restrictions and embargoes imposed by Russia, and provides some first indications of their impact. The immediate impact on trade flows, especially for agri-food products, has been substantial, albeit with some leakage through Belarus. The main instrument for the Russian measures has been allegations of non-conformity with Russian technical standards, although the correlation of these allegations with movements in Russia's geopolitical postures makes it obvious that the Russian technical agencies are following political guidelines dressed up as scientific evidence. These measures also push the three states into diversifying their trade marketing efforts in favour of the EU and other world markets, with Georgia already having taken significant steps in this direction, since in its case the Russian sanctions date back to 2006. In the case of Ukraine, Russia's threat to cancel CIS free trade preferences infiltrated trilateral talks between the EU, Ukraine and Russia, leading on 12 September to their proposed postponement until the end of 2015 of the 'provisional' implementation of a large part of the AA/DCFTA. This was immediately followed on 16 September by ratification of the AA/DCFTA by both the Rada in Kyiv and the European Parliament, which will lead to its full and definitive entry into force when the 28 EU member states have also ratified it. However Putin followed the day after with a letter to Poroshenko making an abusive interpretation of the 12 September understanding.
Topic:
Economics, International Trade and Finance, Power Politics, and Sanctions
Political Geography:
Russia, Europe, Ukraine, Moldova, and Georgia

29. The Asset Quality Review and Capital Needs: Why re-capitalise banks with public money?

Author:
Daniel Gros
Publication Date:
12-2013
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
There are three aggregate numbers that describe the problem the Single Supervisory Mechanism (SSM) is inheriting: the 130 banks under its direct supervision hold assets worth 250% of the euro area's GDP, their capital is equivalent to only 4% of their assets' value and they have made zero profits, in the aggregate, over the last four years.
Topic:
Debt, Economics, Markets, Financial Crisis, and Reform
Political Geography:
Europe

30. Net Neutrality and Mandatory Network-Sharing: How to disconnect the continent

Author:
Andrea Renda
Publication Date:
12-2013
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
A lively debate emerged on the proposed "Connected Continent" legislative package presented by the European Commission in September 2013. The package contains a proposed rule on the 'open Internet', which was heavily discussed in European Parliament hearings in early December. This commentary argues that while the proposed rule is in principle balanced and appealing, it is utterly impractical due to the enormous uncertainty that its application would entail. At the same time, the rule is very far from what neutrality proponents have argued for almost a decade: rather than the place for internet freedom, it would transform the Web into a place requiring constant micro-management and tutoring of user behavior. Both arguments lead to the conclusion that the current proposal should be at once reformed and analysed under a more holistic lens. On the one hand, Europe should launch an ambitious project for the future, converged infrastructure by mobilising resources and reforming rules to encourage investment into ubiquitous, converged, 'always on' connectivity. On the other hand, enhanced legal certainty for broadband investment could justify a more neutrality-oriented approach to traffic management practices on the Internet. The author proposes a new approach to Internet regulation which, altogether, will lead to a more balanced and sustainable model for the future, without jeopardising user freedom.
Topic:
Debt, Economics, Monetary Policy, Infrastructure, and Financial Crisis
Political Geography:
Europe