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11. Modernizing conventional arms control in the Euro-Atlantic region

Author:
Peter van Ham
Publication Date:
09-2018
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
Europe’s conventional arms control architecture requires a thorough makeover. Today’s arms control and confidence-building arrangements are based on two legally binding pillars: the Conventional Armed Forces Europe (CFE) Treaty of 1990 and the Open Skies Treaty of 1992. The Vienna Document on Confidence- and Security-Building Measures (CSBMs), originally adopted in 1990 and most recently updated in 2011, is politically binding and aims to increase the transparency of military postures and activities in Europe. Today, these arrangements are either blocked or in dire need of modernization.
Topic:
International Relations and International Political Economy
Political Geography:
Europe

12. Take a different look at the neighbours

Author:
Luuk van Middelaar and Monika Sie Dhian Ho
Publication Date:
09-2018
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
The Netherlands shouldn’t dramatize Britain’s departure from the European Union. Sure, it’s a downer for the economy and a political blow, but not a catastrophe. Brexit may even help us to break the established patterns of our foreign policy. And that is urgently needed: Brexit and Trump require us to reset our geopolitical compass towards our neighbours and partners on the continent. In this Alert authors Luuk van Middelaar and Monika Sie Dhian Ho give four tips for a new Europe policy.
Topic:
International Political Economy and International Affairs
Political Geography:
Europe

13. Russia’s evolving gas relationship with the European Union: Trade surges despite political crises

Author:
Marco Siddi
Publication Date:
09-2018
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Gas trade between the European Union and Russia increased considerably in both 2016 and 2017, despite the ongoing political crisis. Simultaneously, two long-standing disputes in the EU-Russia gas relationship – regarding Gazprom’s monopolistic practices and the EU’s third energy package – were settled. Russian companies have invested in new infrastructural projects for the export of gas to Europe, including the launch of the Yamal LNG terminal in December 2017 and the construction of the TurkStream and Nord Stream 2 pipelines. However, significant challenges remain for the relationship, most notably the intra-EU controversy on Nord Stream 2 and uncertainty about future gas transit in Ukraine.
Topic:
Energy Policy, International Political Economy, International Affairs, and Geopolitics
Political Geography:
Russia and Europe

14. The Future of the European Central Bank

Author:
John Ryan
Publication Date:
06-2018
Content Type:
Special Report
Institution:
LSE IDEAS
Abstract:
This report explores the need to make the ECB more transparent and democratically accountable to prevent the next Eurozone crisis. The ECB can justly claim to have held together a poorly-designed system in difficult circumstances, but its overlapping roles create potential conflicts of interest. What does this mean for the countries, companies, and banks that have grown to depend so much on the ECB?
Topic:
International Political Economy and International Affairs
Political Geography:
Europe

15. Global Cities and Integration

Author:
Matteo Villa
Publication Date:
09-2018
Content Type:
Special Report
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
European cities are at the forefront of tackling the complex challenges of integration. The foreign-born population is constantly growing and already exceeds 30% in Berlin, Vienna, and London. Local authorities are therefore playing a more and more important role in managing increasingly complex integration processes. Integrating foreigners requires a commitment to the coordination of policies in diverging areas such as: reception, education, the labour market, health services, and fighting segregation. This report addresses the issue of urban diversity by answering some crucial questions: what problems do cities face in addressing the challenge of integration? How can best practices be replicated? And how can the dialogue between cities, regions, national governments, and European institutions be improved?
Topic:
International Political Economy
Political Geography:
Europe

16. There Is an Alternative A Two-Tier European Currency Community

Author:
Fritz W Scharpf
Publication Date:
11-2018
Content Type:
Commentary and Analysis
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The performance of EMU member economies is shaped by different and structurally entrenched “growth models” whose success depends on specific macro-regimes – restrictive for export-led growth, accommodating for demand-led growth. These two types of models cannot be equally viable under a uniform macro regime, and their divergence threatens the stability of the EMU. The present attempt to enforce structural convergence in the eurozone appears economically ineffective and lacks democratic legitimacy on the national and the European level. Assuming that complete integration in a democratic federal state is presently unattainable, the paper presents the outline of a more flexible European Currency Community that would include a smaller and more coherent EMU and the member states of a revised “Exchange Rate Mechanism II” (ERM) whose currencies are flexibly linked to the euro. It would restore the external economic viability of autonomous domestic policy choices, and it would protect its members against speculative currency fluctuations.
Topic:
International Political Economy
Political Geography:
Europe

17. Explaining the Growth of CSR within OECD Countries: The Role of Institutional Legitimacy in Resolving the Institutional Mirror vs. Substitute Debate

Author:
Daniel Kinderman and Mark Lutter
Publication Date:
04-2018
Content Type:
Commentary and Analysis
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Two strands of literature have emerged to explain the rise of a new form of private governance, Corporate Social Responsibility (CSR). One camp argues that CSR expansion is likely during periods of economic liberalization because CSR tends to substitute for growing institutional voids and a lack of social regulation. The other camp argues that CSR is likely to diffuse within coordinated economies because it mirrors these institutional settings. While both camps find empirical support for their arguments, no one has yet managed to combine both perspectives. In our study, we develop three hypotheses based on two (rationalist and constructivist/sociological) strands of institutional theory. Based on a new dataset comprising the corporate membership in business-led CSR organizations in over thirty countries from 1981 to 2008, we show that economic liberalization has a strong effect on CSR expansion when the legitimacy of CSR is low. However, when the practice has achieved substantial cultural acceptance, economic liberalization no longer drives CSR expansion. In this setting, CSR expansion is most likely to occur within socially regulated economic contexts.
Topic:
International Political Economy and International Trade and Finance
Political Geography:
Europe

18. Institutional investors and home bias in Europe’s Capital Markets Union

Author:
Zsolt Darvas and Dirk Schoenmaker
Publication Date:
03-2017
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Integrated capital markets facilitate risk sharing across countries. Lower home bias in financial investments is an indicator of risk sharing. We highlight that existing indicators of equity home bias in the literature suffer from incomplete coverage because they consider only listed equities. We also consider unlisted equites and show that equity home bias is much higher than previous studies perceived. We also analyse home bias in debt securities holdings, and euro-area bias. We conclude that European Union membership may foster financial integration and reduce information barriers, which sometimes limit cross-country diversification. We calculate home bias indicators for the aggregate of the euro area as if the euro area was a single country and report remarkable similarity between the euro area and the United States in terms of equity home bias, while there is a higher level of debt home bias in the United States than in the euro area as a whole. We develop a new pension fund foreign investment restrictions index to control for the impact of prudential regulations on the ability of institutional investors to diversify geographically across borders. Our panel regression estimates for 25 advanced and emerging countries in 2001-14 provide strong support for the hypothesis that the larger the assets managed by institutional investors (defined as pension funds, insurance companies and investment funds), the smaller the home bias and thereby the greater the scope for risk sharing.
Topic:
International Political Economy, International Trade and Finance, Economic structure, and Europe Union
Political Geography:
Europe

19. Brexit and the European financial system

Author:
Uuriintuya Batsaikhan, Robert Kalcik, and Dirk Schoenmaker
Publication Date:
02-2017
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
London is an international financial centre, serving European and global clients. A hard Brexit would lead to a partial migration of financial firms from London to the EU27 (EU minus UK) to ensure they can continue to serve their EU27 clients. Four major cities will host most of the new EU27 wholesale markets: Frankfurt, Paris, Dublin and Amsterdam. These cities have far fewer people employed in finance than London. Moreover, they host the European headquarters of fewer large companies. The partial migra- tion of financial firms will thus have a major impact on these cities and their infrastructures. Banks are the key players in wholesale markets. United States and Swiss investment banks, together with one large German and three large French banks, will make up the core of the new EU27 wholesale markets. Some Dutch, Italian and Spanish banks are in the second tier. The forex, securities and derivatives trading markets are now in London. We map the current, limited market share of the four major cities that might host the EU27 client business. The expected migration of financial trading will lead to a large increase in trading capacity (eg bank trading floors). Clearing is the backbone of modern financial markets. A comparative overview of clearing facilities in the EU27 shows that Germany and France have some clearing capacity, but this will need to be expanded. The ownership of clearing is often intertwined with stock exchanges. Were the planned LSE-Deutsche Börse merger to go ahead, LSE would sell the Paris subsidiary of its clearinghouse. In terms of legal systems, there is an expectation that trading activities will be able to continue under English contract law, also in the EU27. A particular challenge is to develop FinTech (financial technology) in the EU27, as this innovative part of the market is currently based in London. We estimate that some 30,000 jobs might move from London to the EU27. This will put pressure on the facilities (infrastructure, offices, residential housing) in the recipient cities. The more the European Union market for financial services is integrated, the less need there will be for financial firms to move to one location, reducing the pressure for all facilities to be in one city (see Sapir et al, 2017, which is a companion piece to this paper).
Topic:
International Political Economy, International Trade and Finance, and Brexit
Political Geography:
Britain and Europe

20. Fundamental uncertainty and unconventional monetary policy: an info-gap approach

Author:
Yakov Ben-Haim, Maria Demertzis, and Jan Willem Van Den End
Publication Date:
02-2017
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
This paper applies the info-gap approach to the unconventional monetary policy of the Eurosystem and so takes into account the fundamental uncertainty on inflation shocks and the transmission mechanism. The outcomes show that a more demanding monetary strategy, in terms of lower tolerance for output and inflation gaps, entails less robustness against uncertainty, particularly if financial variables are taken into account. Augmenting the Taylor rule with a financial variable leads to a smaller loss of robustness than taking into account the effect of financial imbalances on the economy. However, in some situations, the augmented model is more robust than the baseline model. A conclusion from our framework is that including financial imbalances in the monetary policy objective does not necessarily increase policy robustness, and may even decrease it
Topic:
Economics, International Political Economy, and International Trade and Finance
Political Geography:
Europe