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701. Outward FDI from Greece and its policy context

Author:
Aristidis P. Bitzenis and Vasileios A. Vlachos
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
With the fall of centrally planned economies in the Balkans, their liberalization and the opening of their borders to free trade and capital movements, Greece became more active in the generation of outward foreign direct investment (OFDI). Greece's OFDI stock increased from US$ 3 billion in 1990 to US$ 6 billion in 2000 and to US$ 38 billion in 2010. The Europeanization process of Turkey and the transition of the economies in the Balkans was accompanied by a gradual rise of FDI from Greece into those economies. More than half of Greece's OFDI stock – over US$ 20 billion in 2009 (67% of total) – is located in South-East Europe: in the Balkans, Cyprus and Turkey. While Greece's early OFDI flows were directed to the secondary sector to reduce costs, the bulk of later flows was directed to the services sector, as new markets were opened. This shift signifies the rise of major corporate players. The Greek Balkan policy, which commenced through the European Union, and the upgrading of the Athens Stock Exchange have positively affected Greece's position as a key regional investor. The expectations for sustaining this leading role, however, have been weakened recently since, due to the Greek sovereign debt crisis, Greek multinational enterprises (MNEs) disinvested US$ 1.6 billion from their FDI abroad in 2010.
Topic:
Debt, Economics, Foreign Direct Investment, and Financial Crisis
Political Geography:
Europe, Turkey, Greece, Balkans, and Cyprus

702. Inward FDI in Italy and its policy context

Author:
Marco Mutinelli and Lucia Piscitello
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
The attractiveness of the Italian economy for inward foreign direct investment (IFDI) has been traditionally limited, despite the country's locational advantages such as a large domestic market and a skilled labor force. The recent global crisis worsened the country's IFDI position, with flows falling from US$ 40 billion in 2007 to -US$ 11 billion in 2008 before recovering to US$ 20 billion in 2009 but down again to US$ 9 billion in 2010. Although the country's IFDI stock had grown since 2000 at a rate similar to that of the European Union as a whole, in 2010 IFDI stock contracted vis-à-vis 2009, reflecting how Italy, compared to other key European countries and to its own potential, continues to underperform. The main obstacles to exploiting the country's potential for IFDI lie both in the largely insufficient actions undertaken to attract and promote IFDI, and especially in the lack of coordination with other relevant policy measures (e.g. infrastructure development) within a broader framework aimed at regional and national development.
Topic:
Development, Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Europe and Italy

703. European Neighbourhood Policy: How to Reconcile EU's Offer with Neighbour's Expectations?

Author:
Beata Wojna and Monika Arcipowska
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
The Polish Institute of International Affairs
Abstract:
Since its launch in 2004, the ENP has succeeded in bringing about a strengthening of economic relations, especially trade, between the EU and its neighbours. However, the political record of the seven-year implementation of this policy is relatively poor. The violent, unprecedented socio-political changes in North Africa and the Middle East, which started in January 2011, revealed weaknesses and problems in the European policy towards its southern neighbours as developed in the framework of the Barcelona Process and the Union for the Mediterranean. Arab spring has shown that the EU support to introduce political reforms and to build and consolidate democracy in the southern neighbouring countries has yielded very limited results. The Eastern Partnership seems to be one of the few positive manifestations of the European Neighbourhood Policy's evolution in recent years but is not free from problems. The most tell-tale sign of the Eastern Partnership's deficiencies is a palpable relapse in democratisation.
Topic:
Foreign Policy, Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Africa, Europe, and Middle East

704. Between Revolution and Stagnation: Perspectives for Belarus

Author:
Anna Maria Dyner
Publication Date:
08-2011
Content Type:
Policy Brief
Institution:
The Polish Institute of International Affairs
Abstract:
Belarus faces a serious economic and financial crisis, which may have a significant impact on the political transformation of that country. Because of increases in living costs, which are part of the aftermath of the devaluation of the Belarusian ruble and rapidly rising inflation, an explosion of mass public protests is forecast for the autumn. However, it is not expected that the protests will bring about a rapid (pro-European) turn in the political situation in Belarus. Moreover, the weakness of the opposition, which after the presidential election of 2010 became even more divided than before and still has no charismatic leader, is not propitious to radical, pro-European changes.
Topic:
Economics, Social Stratification, and Financial Crisis
Political Geography:
Europe and Asia

705. Asian Regional Policy Coordination

Author:
Edwin M. Truman
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
This paper addresses two central questions for Asia and the world: (1) What is the purpose of Asian regional policy coordination going forward? (2) Will Asian regional policy coordination substitute or complement global policy coordination? The paper examines the potential coverage and content of such policy coordination, what is meant by Asia in this context, and how Asia fits in with global policy coordination processes. Truman addresses three related aspects of Asian regional policy coordination: macroeconomic policies, reserve management, and crisis management. He concludes that while the countries in the Asian region have not completely exploited the scope for regional policy coordination, more ambitious efforts focused on close integration are not likely to bear fruit, in particular, if they are conceived and promoted under the banner of Asian exceptionalism. These conclusions are based on two main considerations: First, Asian economies differ, and will continue to differ, sufficiently in size and stage of development such that it is difficult to conceive of a successful voluntary blending of their interests. Second, the central lesson of the global financial crisis and its current European coda is that global economic and financial integration has advanced sufficiently that countries can run but they cannot hide individually or in sub-global groups of countries.
Topic:
Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Europe and Asia

706. Time for a Common European Effort on Raw Materials

Author:
Roderick Kefferpütz
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
At long last commodity prices have declined from their pre-summer highs. Many raw materials are now trading at significantly lower prices, giving temporary respite to industry. Red-hot copper, the bellwether of the metals sector, for example, has pulled back from its peak of $10,000 a tonne. Even the astronomical rise of the previously little-known rare earth elements has reversed.
Topic:
Economics, Markets, and Natural Resources
Political Geography:
Europe

707. Misguided policies risk breaking up the eurozone and the EU

Author:
Stefano Micossi
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
I met Tommaso Padoa-Schioppa in the early 1970s as a new young professional in the Research Department of Banca d'Italia, where he was head of the monetary policy unit. Many of us newcomers, fresh from American graduate studies, were appalled by the Bank's monetary approach, replete with quantitative controls and administrative measures to channel funds to an insatiable Treasury.
Topic:
Economics, Regional Cooperation, Monetary Policy, and Governance
Political Geography:
America and Europe

708. EU Federalism in Crisis

Author:
Karel Lannoo
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
One positive effect of the euro crisis is that it has provoked Europe to engage in a profound debate on the form and degree of federalism it needs. Even if, until recently, many would have argued that Europe is not a federal state, the EU already has many elements of such a governance model in place, of which European citizens are hardly aware. Many competences are uniquely attributed to the EU. Legislation in several fields of EU competence can be adopted with a qualified majority of member states. Only in a few areas, such as taxation, is unanimity still required, even after the new Lisbon Treaty has come into effect. The same applies for changes to the EU Treaty itself.
Topic:
Economics, Regional Cooperation, Monetary Policy, Financial Crisis, and Governance
Political Geography:
Europe

709. Agreement needed on liquidity provision to restore confidence in the eurozone

Author:
Stefano Micossi
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Some eighteen months after the first Greek rescue (May 2010), there is little doubt that the multiple attempts at crisis management in the eurozone have failed to restore confidence. Indeed, following each round of emergency measures agreed by the eurozone summits, matters have turned for the worse (see Figure 1 for the widening spreads, over the German Bund, for sovereign borrowing in the eurozone). At the time of writing, contagion has spread beyond Spain and Italy to the core sovereigns, with France close to losing its triple A rating and even Germany experiencing partial failure in a Bund auction on November 23rd. Spreads are also opening up for Austria, Belgium, Finland and even the virtuous Netherlands. Meanwhile, the banking system Europe- wide is under increasing strain, with term funding all but closed for any bank with significant exposure to distressed sovereign debtors and the interbank market close to seizing up. Deposit withdrawals have surfaced in a number of large banks from the periphery. The euro has started to weaken in foreign exchange markets, narrowing the room for a distinction between eurozone debt crisis and euro-currency crisis from which some observers were until recently drawing comfort.
Topic:
Economics, Regional Cooperation, Monetary Policy, and Financial Crisis
Political Geography:
Europe and Germany

710. Turkey: The Elephant in the Room of Europe

Author:
Hüseyin Selçuk Dönmez
Publication Date:
05-2011
Content Type:
Working Paper
Institution:
Centre for Strategic Research and Analysis (CESRAN)
Abstract:
Turkey's accession process to the European Union (EU) has been a rather challenging issue for more than two decades now. Turkey applied for membership in 1987, "that is, three years before Cyprus and Malta and between seven and nine years before applications were lodged by ten Central and Eastern European countries (CEECs)." By the year 2011, Turkey has been waiting for 24 years to become a member of the EU. No other country in history of the EU enlargement has waited this long to become a member and not managed to become one after a quarter of a century. It would not be wrong to consider Turkey's bid to join the EU as a unique case in comparison to the former applicant countries, especially CEECs. As a result of this, there has been a continuous debate about Turkey's application and whether it has been treated differently or not. The aim of this paper is to shed a brighter light on this debate by presenting examples of different treatment towards the Turkish application. Before exploring the reasons of why and how Turkey has been treated differently, there are some key facts worth mentioning while defining Turkey's difference from other applicant countries. What makes these facts important is that they have formed the foundations of hurdles and their justifications for Turkey's possible membership in the EU. These facts will be touched upon prior to a deeper analysis.
Topic:
Economics, Sociology, and Culture
Political Geography:
Europe and Turkey