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81. Can Italy and Spain survive rates of 6-7%?

Author:
Daniel Gros
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The sentiment that the euro is now in real danger is based in large part on the widespread conviction that interest rates of 6-7% are simply unsustainable for both Italy and Spain., After taking a closer look at the fundamentals, however, Daniel Gros concludes in this new Policy Brief that both countries should be able to live with this level of interest rates for quite some time, but only if they mobilize domestic savings, which remain strong in both countries. For Spain, some debt/equity swaps are also needed.
Topic:
Debt, Economics, Markets, and Financial Crisis
Political Geography:
Europe, Spain, and Italy

82. Unholy compromise in the eurozone and how to right it

Author:
Stefano Micossi
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
Two years after the first Greek rescue in May 2010, crisis management in the eurozone has still failed to restore confidence. A vivid picture of the situation can be found in Figure 1: the constellation of spreads on ten-year sovereign debts over the Bund in the eurozone is wider than it was before monetary union, as though financial markets had already discounted its breakdown. Temporary respites, notably in the early part of 2012, have not interrupted the trend of increasing divergence that risks undermining the credibility of adjustment efforts under way.
Topic:
Debt, Economics, Markets, Monetary Policy, and Financial Crisis
Political Geography:
Europe

83. Pre-empting Technical Barriers in the Single Market

Author:
Jacques Pelkmans and Anabela Correia de Brito
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
Effective enforcement and compliance with EU law is not just a legal necessity, it is also of economic interest since the potential of the Single Market will be fully exploited. Enforcement barriers generate unjustified costs and hindrances or uncertainty for cross-border business and might deprive consumers from receiving the full benefit of greater choice and/or cheaper offers.
Topic:
Economics, Markets, Monetary Policy, and Law
Political Geography:
Europe

84. Central Banks in Times of Crisis: The FED vs. the ECB

Author:
Daniel Gros, Cinzia Alcidi, and Alessandro Giovannini
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
Different economic and financial structures require different crisis responses. Different crises also require different tools and resources. The first 'stage' of the financial crisis (2007-09) was similar on both sides of the Atlantic, and the response was also quite similar. The second stage of the crisis is unique to the euro area. Increasing financial disintegration within the region has forced the ECB to become the central counterparty for the entire cross-border banking market and to intervene in the sovereign bond market of some stressed countries. The actions undertaken by the European Central Bank (ECB), however, have not always represented the best response, in terms of effectiveness, consistency and transparency. This is especially true for the Securities Markets Programme (SMP): by de facto imposing its absolute seniority during the Greek PSI (private sector involvement), the ECB has probably killed its future effectiveness.
Topic:
Debt, Economics, International Trade and Finance, Markets, Monetary Policy, and Financial Crisis
Political Geography:
Europe

85. External versus Domestic Debt in the Euro Crisis

Author:
Daniel Gros
Publication Date:
05-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
As EU leaders muddle through the eurozone crisis, the debate about its root causes continues. CEPS Director Daniel Gros argues in this Policy Brief that the debate is important if we are to understand how to prevent future crises. In his view, external debt is the key to the turmoil in European economies and that the focus on total public debt is therefore misleading.
Topic:
Debt, Economics, and Financial Crisis
Political Geography:
Europe

86. Lobbying the European Parliament: A necessary evil

Author:
Maja Kluger Rasmussen
Publication Date:
05-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
Despite the growth of lobbying in the EU over the past two decades, the EU has taken a rather laissezfaire approach to regulating lobbying activity. While the European Parliament (EP) is in many ways more transparent and more accessible than many of the EU's national parliaments, the code of conduct for lobbyists and the Parliament's own rules of procedure are rather vague. As a result of the 'cash for laws' scandal, the EP President, Jerzy Buzek, has established a working group to draw up a new set of rules to govern the access and behaviour of lobbyists and to formulate a code of conduct for Members of the European Parliament (MEPs). The working group is currently considering seven proposals put forward by Jerzy Buzek, including a mandatory lobbying register for all EU institutions; a strengthening of MEPs' declarations of financial interests, with more frequent updates; a code of conduct for MEPs; a 'legislative footprint' for rapporteurs and tougher sanctions for non-compliance with these rules. While the reform proposal, as it stands now, offers a significant improvement of the Parliament's current rules, it does not go far enough, however.
Topic:
Regional Cooperation and Governance
Political Geography:
Europe

87. Labour Immigration Policy in the EU: A Renewed Agenda for Europe 2020

Author:
Sergio Carrera, Elspeth Guild, Anaïs Faure Atger, and Dora Kostakopoulou
Publication Date:
04-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The EU's capacity for a legitimate, coherent and migrants' rights compliant policy on labour immigration is now more than ever at a test in light of the political priorities set in the EU's 2020 Strategy and the effects of the revolutions and war in North African states during the last four months. This Policy Brief examines the incoherencies characterising the current generation of EU's labour immigration policies and the challenges towards ensuring a global rights-based approach to migration. The analysis carried out in this paper is accompanied by a synthesis of the main policy recommendations discussed at the Workshop on “The Next Phase of EU Labour Immigration Policy: Enhancing Policy Coherence and Advancing a Rights-Based Approach” organised in the context of the Conference “State of the Union: Brussels Think Tank Dialogue 2011” in January 2011.
Topic:
Labor Issues and Immigration
Political Geography:
Africa and Europe

88. The EU's Response to the Financial Crisis: A mid-term review

Author:
Karel Lannoo
Publication Date:
04-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
Two years after the London G-20, CEPS Chief Executive Karel Lannoo finds that the EU is well advanced in delivering on the commitments made for the 2013 target date. Important steps have been taken on the institutional side, and regulatory changes are moving ahead. On some issues, in fact, such as remuneration, the EU has made even greater headway than the US. But certain key sensitive matters remain, such as bank resolution or structural changes.
Topic:
Debt, Economics, Global Recession, Monetary Policy, and Financial Crisis
Political Geography:
United States, Europe, and London

89. Can the eurozone countries still live together happily ever after?

Author:
Marcello Messori
Publication Date:
03-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
After the Greek public debt crisis and the bilateral loans to Greece from the other members of the European Monetary Union (EMU), in May 2010 the Ecofin Council launched the European Financial Stabilization Mechanism (EFSM). In June of the same year the EMU countries instituted the European Financial Stability Facility (EFSF). These two mechanisms, which are charged with providing support to EMU countries in “exceptional difficulty”, received their baptism of fire with Ireland in January 2011 and successfully made their first bond issue on the market.
Topic:
Debt, Economics, and Monetary Policy
Political Geography:
Europe and Greece

90. Restoring financial stability in the euro area

Author:
Christian Kopf
Publication Date:
03-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The pricing of sovereign credit risk is a necessary component of the financial architecture of the European Monetary Union. However, unnecessarily high and volatile risk premia on government bonds are currently preventing effective financial intermediation within the euro area, thereby inhibiting its economic recovery. Several proposals have been made on how these risk premia should be brought down, namely i) permanent pooling of funding through joint bond issuance, ii) temporary liquidity assistance through multilateral funds, iii) debt buybacks using multilateral funds, and iv) debt restructuring.
Topic:
Debt, Economics, Global Recession, Monetary Policy, and Financial Crisis
Political Geography:
Europe