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971. The internal nature of the Alliance’s cohesion

Author:
Thierry Tardy
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
NATO Defense College
Abstract:
NATO Summits take stock of recent political and security developments, assess how they affect the Alliance’s posture and adaptation agenda, and decide on possible new directions. From the outside, a key feature of any Summit is also what it reveals about NATO’s political cohesion and relevance. The political cohesion of an international organization results from a general consensus among its key member states about its mandate, objectives and methods of operation. Relevance is about the extent to which an institution delivers on its mandate and therefore serves its purpose; relevance may be real or perceived, but is in any case essential to political cohesion. Cohesion and relevance can be undermined in at least three different ways. First, an institution’s cohesion and relevance are jeopardized whenever that institution proves unable to effectively deliver on the mandate it was established for. Second, cohesion and relevance are at stake when member states no longer agree on the objectives or methods of the institution, and as a consequence on the level of resources to allocate to it. Third, institutions’ cohesion and relevance may suffer from a lack of public buy-in for what they are and do. At all levels, the assessment results from a mix of rational analysis and a dose of manipulated subjectivity.
Topic:
Defense Policy, NATO, Regional Cooperation, and Military Strategy
Political Geography:
Europe, North Atlantic, North America, and Western Europe

972. Projecting stability in practice? NATO’s new training mission in Iraq

Author:
Kevin Koehler
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
NATO Defense College
Abstract:
Since the 2016 Warsaw Summit, the notion of projecting stability has made a return to NATO’s policy discourse. A central tenet of this agenda is the idea of securing the Alliance by stabilizing its periphery: “If our neighbours are more stable, we are more secure”, says the Secretary General Jens Stoltenberg. At the core of this approach is therefore an attempt at shaping the security environment in NATO’s neighbourhood, relying to a significant extent on partnership with individual countries and other international organizations. But how does projecting stability work in practice? Can NATO develop a type of small-footprint, large-effect interaction with partners in its periphery? How can potential interest asymmetries between NATO and partners be addressed in this context? The new NATO
Topic:
NATO, Imperialism, Regional Cooperation, and Political stability
Political Geography:
Iraq, Europe, North Atlantic, Middle East, and North America

973. Egypt, a future gas supplier to the European Union?

Author:
Jan Mazač and Lukáš Tichý
Publication Date:
04-2018
Content Type:
Working Paper
Institution:
Institute of International Relations Prague
Abstract:
The main objective of the external dimension of the EU energy policy in line with the Energy Union strategy is primarily to ensure energy security by diversifying external energy supplies, transport routes and suppliers, mainly in the gas domain. Egypt’s recent offshore and onshore gas discoveries increased its natural gas reserves estimate. Its natural gas production is thus expected to double in 2020 and transform the country back into a gas supplier in the eastern Mediterranean region. The European Union (EU) should thus strengthen its relations with Egypt to allow its gas production to reach European markets.
Topic:
Energy Policy, Markets, Oil, European Union, and Gas
Political Geography:
Europe, Middle East, North America, and Egypt

974. The Berlin Pulse 2018 (full issue)

Publication Date:
11-2018
Content Type:
Special Report
Institution:
Körber-Stiftung
Abstract:
Dear Readers, Welcome to the second edition of THE BERLIN PULSE! At times of turmoil, when the rules-based international order is put into question and traditional alliances become weaker, the majority of Germans still do not favour a more active stance in foreign policy: 55 percent of Germans prefer restraint rather than Germany engaging more strongly in international crises. Apparently, the demands by leading politicians and think tanks for Germany to take on greater international responsibility have not persuaded Germans to change their mind. THE BERLIN PULSE guides policy-makers and experts along the fine line between domestic constraints and international expectations. Political leaders such as the Polish Prime Minister Mateusz Morawiecki, German Foreign Minister Heiko Maas and the President of Estonia Kersti Kaljulaid express their hopes and expectations for German foreign policy in 2019. Their perspectives meet the attitudes of the German public – sometimes they overlap, sometimes they clash. This year’s issue brings together data, analysis and different perspectives on the most pressing challenges for German foreign policy today and in the years to come – including some trends and outliers that may surprise you. With its new focus topic “The Value of Europe”, Körber Foundation is contributing to the debate on the past, present, and future of the European project and is paying special attention to the question of how a new split along the former “Iron Curtain” can be avoided. We are witnessing a growing internal division in the European Union: 77 percent of Germans believe the cohesion between EU member states has recently weakened. A striking 46 percent of Germans believe the EU’s Eastern enlargement in 2004 was not the right decision. At a time when the transatlantic relationship is going through turbulent times, three out of four Germans describe US-German relations as “somewhat bad” or “very bad” and favour a more independent foreign policy from the US. However, this alienation is not mirrored in the US: even if they consider Germany not a very important partner, 70 percent of Americans believe the relationship between the US and Germany is somewhat good or very good. We thank our transatlantic partners from the Pew Research Center for fielding joint questions on the transatlantic relationship in the US together with us. The results of the representative survey commissioned by Körber Foundation in September 2018 should enrich the conversation about German foreign policy during and beyond the Berlin Foreign Policy Forum, which we are proud to host together with the German Federal Foreign Office. “Talk to each other rather than about each other” – the motto of our founder Kurt A. Körber continues to guide Körber Foundation’s activities today. I hope you enjoy reading. Thomas Paulsen
Topic:
Foreign Policy, Defense Policy, International Cooperation, Military Affairs, and Military Intervention
Political Geography:
Europe and Germany

975. Study and Reports on the VAT Gap in the EU-28 Member States: 2018 Final Report

Author:
Adam Śmietanka, Alejandro Esteller Moré, Grzegorz Poniatowski, José María Durán-Cabré, and Mikhail Bonch-Osmolovsky
Publication Date:
10-2018
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
In this Report, the Authors present the new Value Added Tax (VAT) Gap estimates for 2016, as well as updated estimates for 2012-2016. In addition to the analysis of the Compliance Gap, this Report examines the Policy Gap in 2016 as well as the contribution that reduced rates and exemptions made to the theoretical VAT revenue losses. Moreover, the Report contains an econometric analysis of VAT Gap determinants, which is a novelty introduced from this year’s Study. In 2016, most European Union (EU) Member States (MS) saw positive tailwinds with a combined real GDP growth of 2.0 percent. As a result of a growing base and increasing VAT compliance, VAT revenue increased in all MS with three exceptions. Most pronounced is the case of Romania, where VAT revenue decreased in response to reduction of the standard rate by four percentage points. In nominal terms, in 2016, the VAT Gap in EU-28 MS fell below EUR 150 billion and amounted to EUR 147.1 billion. In relative terms, the VAT Gap share of the VAT total tax liability (VTTL) dropped to 12.3 percent from 13.2 percent in 2015, and is the lowest value in the analysed period of 2012-2016. Denoted at the share of GDP, the VAT Gap in 2016 amounted to 0.99% compared to 1.05% in 2015. Of the EU-28, the VAT Gap share decreased in 22 countries and increased in six—namely, Romania, Finland, the UK, Ireland, Estonia, and France. The biggest declines in the VAT Gap—of over five percentage points—occurred in Bulgaria, Latvia, Cyprus, and the Netherlands. The smallest Gaps were observed in Luxembourg (0.85 percent), Sweden (1.08 percent), and Croatia (1.15 percent). The largest Gaps were registered in Romania (35.88 percent), Greece (29.22 percent), and Italy (25.90 percent). Overall, half of EU-28 MS recorded a Gap below 9.9 percent. The Policy Gaps and its components remained stable. The average Policy Gap level was 44.8 percent, out of which 9.95 percentage points are due to the application of various reduced and super-reduced rates (the Rate Gap). Countries with the most flat levels of rates in the EU, according to the Rate Gap, are Denmark (0.93 percent) and Estonia (2.97 percent). The Exemption Gap, or the average share of Ideal Revenue lost due to various exemptions, is, on average, 35 percent in the EU, whereas the Actionable Policy Gap—a combination of the Rate Gap and the Actionable Exemption Gap—is, on average, 16.5 percent of the Notional Ideal Revenue. The econometric analysis can be considered a successful first attempt at inferring the impact of various determinants. Firstly, it can be observed that the productive structure of the economy exerts an impact on the VAT Gap. The share of retailers has the strongest impact on the VAT Gap; however, telecommunications, industry, and art also have a positive impact. Secondly, liquidity constraints and the productive structure of the economy also play a role in determining VAT compliance. The most interesting results have to do with the impact of the variables under the direct control of the tax administration. We show that the impact of the size of the tax administration and the VAT Gap is concave. On the contrary, in the case of IT expenditure, the impact is convex, albeit small, until productivity vanishes when IT expenditure is about 9.8 percent of the total expenditure of the tax administration.
Topic:
Financial Crimes, Tax Systems, Fiscal Policy, and VAT
Political Geography:
Europe, Poland, and European Union

976. Virtual currencies and their potential impact on financial markets and monetary policy

Author:
Lukasz Janikowski and Marek Dabrowski
Publication Date:
09-2018
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
Virtual currencies are a contemporary form of private money. Thanks to their technological properties, their global transaction networks are relatively safe, transparent, and fast. This gives them good prospects for further development. However, they remain unlikely to challenge the dominant position of sovereign currencies and central banks, especially those in major currency areas. As with other innovations, virtual currencies pose a challenge to financial regulators, in particular because of their anonymity and trans-border character.
Topic:
Science and Technology, Monetary Policy, Economic growth, Currency, and Trade
Political Geography:
Europe, Poland, and European Union

977. Economic recovery and inflation

Author:
Marek Dabrowski
Publication Date:
04-2018
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
In the last decade, advanced economies, including the euro area, experienced deflationary pressures caused by the global financial crisis of 2007-2009 and the anti-crisis policies that followed—in particular, the new financial regulations (which led to a deep decline in the money multiplier). However, there are numerous signs in both the real and financial spheres that these pressures are disappearing. The largest advanced economies are growing up to their potential, unemployment is systematically decreasing, the financial sector is more eager to lend, and its clients—to borrow. Rapidly growing asset prices signal the possibility of similar developments in other segments of the economy. In this new macroeconomic environment, central banks should cease unconventional monetary policies and prepare themselves to head off potential inflationary pressures.
Topic:
Economics, Monetary Policy, Economic growth, Inflation, Macroeconomics, and Unemployment
Political Geography:
Europe, Global Focus, and European Union

978. Enhancing Credibility and Commitment to Fiscal Rules

Author:
Grzegorz Poniatowski
Publication Date:
03-2018
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The objective of this paper is to derive the characteristics of an effective fiscal governance framework, focusing on the incentives that ensure a commitment to the fiscal rules. We study this problem with the use of econometric tools, complementing this analysis with formal modelling through the lens of a dynamic principal-agent framework. Our study shows that both economic and institutional factors play an important role in incentivising countries’ fiscal efforts. Fiscal balances are affected not only by the economic cycle, but, among others, by the level of public debt and the world economic situation. We find that the existence of numerical fiscal rules, their strong legal entrenchment, surveillance mechanisms, and credible sanctions binding the hands of governments have a significant impact on curbing deficits. The relationship between the Commission and European Union (EU) Member States (MS), where the EU authorities act as a collective principal that designs contracts for MS, has elements in common with the assumptions of the principal-agent framework. These are: asymmetry of information, moral hazard, different objectives, and the ability to reward or punish the principal. We use a dynamic principal-agent model and show that to ensure good fiscal performance, indirect benefits should be envisaged for higher levels of fiscal effort. In order to account for the structural differences of exerting effort by different MS, it is efficient to adjust fiscal effort to the level of indebtedness. To ensure a commitment to the rules, MS with difficulties conducting prudent fiscal policies should be required to exert less effort than the MS with more modest levels of debt. The FIRSTRUN project is a European Union funded multinational research project that investigates the need for fiscal policy coordination in the EU.
Topic:
Debt, Economics, Regional Cooperation, European Union, and Fiscal Policy
Political Geography:
Europe and European Union

979. The Significance of the Tobacco Product Manufacturing to Poland’s Economy

Author:
Grzegorz Poniatowski and Krzysztof Głowacki
Publication Date:
01-2018
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This report, The Significance of the Tobacco Product Manufacturing to Poland’s Economy, presents the results of the first comprehensive analysis of the impact of tobacco product manufacturing on the Polish economy. The comprehensiveness of the study results from the subject range, covering the sector’s entire value chain: from tobacco cultivation, through processing of raw tobacco and manufacturing of tobacco products, to the distribution and sale of ready products. The report includes an in-depth analysis of current conditions, discusses the challenges facing the sector and attempts to estimate the development of the branches of the economy related to manufacturing of tobacco products in the future. The main purpose of this research was to analyze the economic significance of manufacturing of tobacco products. The economic effect of consumption of tobacco products was only a peripheral element of the research. Conducting such complex research was made possible by advanced methodology. The analytical work was built on three pillars: analysis of existing data, expert interviews and a computable general equilibrium (CGE) model expanded to include production and consumption of tobacco products.
Topic:
Economics, Commodities, Fiscal Policy, Manufacturing, and Tobacco
Political Geography:
Europe and Poland

980. What’s next for healthcare in Poland: diagnosis and prognosis

Author:
Alicja Domagała, Christoph Sowada, Krzysztof Kuszewski, Marzena Tambor, and Stanisława Golinowska
Publication Date:
12-2018
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The health protection system is the object of constant pressures and difficulties in mitigating them, and even more so eliminating or at least reducing them. Changes are undertaken under the influence of a one-sided political assessment, the interests of various groups of participants or the protests of successive groups of medical staff. There is no professional and fully documented diagnosis of the system, made by independent experts, which could serve as the basis for a comprehensive health protection reform plan, rather than individual, incidental changes that disrupt the system’s already very fragile balance. A well thought-out reform, properly distributed over time, so that at no point does it cause negative health effects. A reform agreed among stake-holders and adopted with understanding of the need for changes, so that it is supported by society. A reform for which there will be funds, institutions and engaged professionals – leaders in health protection. A reform that won’t be criticized or changed when the government changes. Such a reform is waiting to be presented and debated. We begin this process by pointing out and presenting the system’s main problems. At the top of the list of issues that must be taken up urgently we place the problem of insufficient resources, but associated with other activities that are essential to achieve higher effectiveness in accomplishing health goals. There is no single miraculous way of balancing and fixing the functioning of the health protection system. This requires both greater financing, qualitatively and quantitatively appropriate staffing, and good institutions. Financial resources are a necessary condition but not a sufficient one – if there is no staff or appropriate institutions, and these are shaped over years. In this publication we present four subjects, corresponding to that list of the main issues that must be addressed urgently. We begin with the problem of good governance, meaning achieving a decisive improvement in institutional solutions in health protection. Next we take up the problem of the need for growth in financial outlays, with judicious public and individual responsibility. We strongly accent the need for development in Poland of medical and support staff, presenting the problems of neglect and the deep shortage of professionals, which is currently paralyzing the health service. The final text, though no less important in the group of priority problems in health protection, concerns public health and demands that it be properly valued by treating care for the health of the population as an investment in human capital with a measurable and significant rate of return.
Topic:
Demographics, Health, Labor Issues, Governance, Health Care Policy, Social Policy, and Public Policy
Political Geography:
Europe and Poland