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41. Basel II: The Remaining Issues

Author:
Moritz Meier-Ewert
Publication Date:
03-2002
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
In January 2001, the Basel Committee for Banking Supervision (BCBS) presented its latest proposals for a revised Capital Adequacy Accord. The aim of this revision is to address some of the perceived shortcomings of the 1988 Accord, which is currently being applied. These new proposals include a number of important improvements, but unfortunately there is a serious risk that in some areas they are overshooting their target. As a result they could have adverse consequences not only for the structure of the banking industry, but also for developing countries and for systemic stability. Indeed, if implemented in its current form, the Accord could lead to a serious round of consolidation in the banking sector resulting in the domination of the market by a handful of internationally active banks, widen the amplitudes of business cycles as well as increase the frequency of financial crisis through enhanced procyclicality, and effectively cut off a number of developing country borrowers from bank-finance.
Topic:
Government, Human Rights, and International Organization
Political Geography:
Europe

42. The Convention on the Future of the EU

Author:
Eric Philippart
Publication Date:
02-2002
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
In December 2000, the Heads of State or Government reckoned that once the institutional changes proposed in the Treaty of Nice were ratified, the Union would be ready for the accession of new member states. Acknowledging that the post-Nice design was certainly not optimal, they also agreed in a Declaration annexed to the Treaty to convene an Intergovernmental Conference (IGC) in 2004. It stipulated that Treaty changes would only be decided after two intermediary phases aimed at deepening and widening the debate on the future of the European Union: an 'open reflection' phase encouraging wide-ranging exchanges of views in multiple national and European fora, to be followed by a phase of 'structured reflection' scheduled for 2002-3. The format of the second phase was to be defined during the European Council bringing the Belgian Presidency to a close. On 15 December 2001, the Laeken 'Declaration on the Future of the European Union' was indeed adopted. No less than 56 substantive questions were proposed as a starting point for the debate to be conducted by an ad hoc structure made of a Convention flanked by a Forum. The Declaration not only defined the mandate and the institutional contours of the new structure, it also provided a number of indications on how it should proceed in terms of deliberation, drafting and decision-making.
Topic:
Government, Human Rights, and International Organization
Political Geography:
Europe

43. Infringement of the European Convention on Human Rights by Belgium

Author:
Joanna Apap
Publication Date:
02-2002
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The judgment in the case of Conka v. Belgium of 5 February 2002 by the European Court of Human Rights in Strasbourg whereby Belgium was founded guilty of infringing the European Convention on Human Rights, has much wider implications than one might think on a first reading.
Topic:
Government, Human Rights, and International Organization
Political Geography:
Europe and Belgium

44. The Assignment of Tasks in an Evolving European Union

Author:
Guido Tabellini
Publication Date:
01-2002
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
How should tasks be divided between the EU and its member states? And what institutional reforms are needed to insure that these tasks (but only these tasks) are efficiently performed by the EU? This is the main problem to be addressed at the upcoming European Convention. This paper argues that EU tasks in the first pillar should not be expanded further, though some changes in the direction of both more and less intervention are desirable. The single market remains to be better enforced, and this might require further centralization of tasks. On the other hand, EU meddling with redistribution should be scaled back; this would imply reforming and reducing EU intervention in agricultural policy, structural funds and the social charter. In other words, EU intervention in the first pillar should mainly aim at making sure that the single market works as effectively as possible, and at fostering competition between EU member states. Redistribution should remain a national prerogative. EU tasks should instead be expanded outside of the first pillar, namely in foreign and defense policies, in internal security and immigration. The paper ends with a discussion of what institutional reforms might be needed to accompany this allocation of tasks and increase accountability of EU decisions. Appropriate reforms should keep in mind the distinction between "bureaucratic accountability" (i.e. the control of appointed bureaucrats with a narrowly defined mission) and "democratic accountability" (i.e., the control of elected politicians with an open mandate). The former type of accountability is the most relevant in Europe today, given the lack of a true and complete European polity, and this has relevant implications for task allocation and institutional reforms.
Topic:
Government, Human Rights, and International Organization
Political Geography:
Europe

45. The Declining Use of Unskilled Labour in Italian Manufacturing: Is Trade to Blame?

Author:
Paul Brenton and Anna Maria Pinna
Publication Date:
12-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
As in other industrialised countries, the manufacturing sector in Italy has recently experienced a substantial increase in the use of skilled relative to unskilled workers — skill upgrading. In this paper we estimate a model, based upon the notion of outsourcing, of the relative demand for skilled labour which allows identification of the roles of technological change and trade, the two main culprits, in skill upgrading. Compared to previous studies of Italy the model is applied to highly disaggregated industrial data and in addition the impact of trade is more precisely measured through the separate identification of import flows from low-wage labour abundant countries and those from OECD partners. Furthermore we also introduce a measure of trade variability. Our results show firstly that economic variables played little or no role in determining the relative demand for unskilled workers in the 1970s in Italy, reflecting the nature of Italian labour market institutions in the period. Subsequently, in the 1980s and 1990s, following some labour market reforms, we find that international competition, in terms of import penetration and the variability of trade prices, had a significant effect on the relative demand for blue-collar workers in Italy in skilled intensive sectors. In unskilled intensive sectors, such as textiles and clothing, where the impact of imports from low-wage countries might be expected to be more pronounced, we do not find a significant effect from imports but rather that the most important role has been played by technological change. The result is consistent with previous studies that indicate that Italian textile and clothing firms have remained internationally competitive by increasingly switching to high quality segments of the industry.
Topic:
Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
Europe and Italy

46. Shaping Europe's Migration Policy

Author:
Joanna Apap
Publication Date:
12-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
During the 1990s, Justice and Home Affairs moved, in an unexpected way, to centre stage in the European debate. Concern had been growing about immigration policy since the Maastricht Treaty institutionalised the third pillar of the European Union. This concern had been stimulated by several factors – the persistence of irregular migration and tragic incidents, such as the one in Dover in July 2000 in which 58 Chinese nationals lost their lives trying to enter illegally into the United Kingdom, the need for immigrant workers in some sectors, and the spectre of an ageing European population. More generally, the Treaty of Amsterdam, since its entry into force in 1999, represents a major development in overall Justice and Home Affairs policy, and the implementation of the treaty provisions in Justice and Home Affairs was described as the next major EU initiative after the single currency.
Topic:
Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
Europe

47. What Are the Limits to Economic Integration?

Author:
Paul Brenton
Publication Date:
11-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper discusses the continuing importance of borders, even within the EU, for the volume of international trade and global capital flows. It suggests that a range of factors, including the nature of the commercial, social and legal fabric of a country and the structure of consumers' preferences, act to constrain cross-border exchanges relative to internal transactions. Hence, whilst the process of globalisation may continue, there are likely to be distinct limits to the extent of economic integration. This entails that the traditional roles of governments in OECD countries in providing social welfare and regulating the market economy within national boundaries will not be seriously undermined. However, the situation may differ in developing countries where existing social and legal institutions may be compromised by globalisation rather than acting to dampen its impact.
Topic:
Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
Europe

48. Fiscal Policy Spillovers in the Euro Area: Where Are They?

Author:
Daniel Gros and Alexandr Hobza
Publication Date:
11-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
What impact would a fiscal expansion in Germany have on the rest of the euro area? It has been generally suggested that it could go in either of two opposite directions, depending on the relative strength of two effects: the direct trade linkage and the financial market repercussions. A review of the results from four major macroeconomic models shows that the cross-country spillover effects of fiscal policy are indeed of uncertain sign and magnitude. Different models give quite different results if used in standardised simulations in terms of the sign, magnitude and time profile of the impact of a fiscal expansion in one member country (e.g. Germany) on other euro area countries. Fewer results are available concerning the potential spillover effects of structural policies, but they are similar to the ones concerning a budgetary stimulus: the magnitude of the spillover is small and varies across countries and over time.
Topic:
Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
Europe and Germany

49. Extending Citizenship Rights to Third Country Nationals

Author:
Joanna Apap
Publication Date:
10-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Various issues arise in the European context with respect to the boundaries of citizenship; one of the main questions is to what extent the division between the European Union citizens and third country nationals will increase, especially if “deepening” of the Union leads to more tightening of its external borders. This paper addresses the question of how far citizenship rights can be extended to third country migrants in the EU?
Topic:
Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
Europe

50. The Changing Nature and Determinants of EU Trade Policies

Author:
Paul Brenton
Publication Date:
10-2000
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
EU trade policies and the environment in which they are determined are now considerably different from when the EU came into being in the 1950s. With the exceptions of agriculture and textiles and clothing, tariffs and quantitative restrictions on trade in goods have been reduced to historically very low levels. But trade policy is now about much more than border restrictions upon trade in goods. Trade in services and the impact of national differences in regulatory regimes are now firmly on the trade policy agenda. This paper describes the current multilateral and preferential trade policies of the EU. It highlights the increasing importance of regulatory issues and the fact that some of these are being addressed outside of both multilateral and standard bilateral free trade agreements. This reflects the mixed motives behind EU trade policies and that for trade with certain regions the typical political economy factors framing trade policy are no longer relevant. For example, liberalisation of transatlantic trade, in the limited form at present of mutual recognition of conformity assessment, is being strongly driven by large corporate business. This trend suggests that the pyramid of preferences usually used to depict EU trade policies is becoming very distorted.
Topic:
Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
Europe