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91. Spillovers from the Arab Revolts: Is Armenia next in line?

Author:
Hrant Kostanyan
Publication Date:
03-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The recent cycle of revolutions in Arab countries has caught policy-makers and experts off guard. The decades-long kleptocracy, systemic corruption, economic stagnation and censorship are merely some of named causes accounting for the shake-up of the old order in Europe's Southern Neighbourhood. The choices that citizens were deprived of making through the ballot box have been accomplished by taking to the streets. Policymakers and analysts are contemplating the possible scenarios for the countries that have finally brought down their dictators. EU leaders are debating support they can provide to help in the establishment of 'good governance.' Meanwhile questions are being asked about the possible implications of the successful revolutions beyond the Arab world and especially for the EU's Eastern neighbours. In his recent speech, the President of the European Council, Herman Van Rompuy, stated: “Although recent developments concentrated our political attention to the South, we certainly cannot afford to forget about the Union's Eastern neighbourhood.”
Topic:
Insurgency
Political Geography:
Europe, Caucasus, Arab Countries, and Armenia

92. On the Tasks of the European Stability Mechanism

Author:
Stefano Micossi, Fabrizia Peirce, and Jacopo Carmassi
Publication Date:
03-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
In recent weeks pressures on the euro and eurozone sovereign debtors have subsided. Buoyant growth in the global economy, increasingly benefiting also the European economy, has of course played an important role in calming financial markets. But even more important has been the perception that France and Germany are again working constructively for a strong economic Europe. More broadly, the acute turbulence in financial markets since the spring of 2010 may have finally convinced our political leaders, notably including the German political establishment, that the benefits of a stable currency far outweigh the costs that may have to be borne to make it work properly. The euro will only be trusted if the member states effectively coordinate their economic policies not only to ensure fiscal stability, but also to eliminate persistent divergences in productivity leading to unsustainable imbalances between national savings and investment (Schäuble, 2011).
Topic:
Security, Economics, Regional Cooperation, Monetary Policy, Financial Crisis, and Governance
Political Geography:
Europe, France, and Germany

93. The Case for 'More Single Market'

Author:
Jacques Pelkmans
Publication Date:
02-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
With the Commission's consultation period on the Single Market Act (European Commission, 2010) nearing its end, it is high time for the EU to get its act together. Priority should immediately be restored to the issue of the Single Market, and EU powers to deepen and widen the internal market, where economically justifiable, ought to be utilized to the full. This CEPS Policy Brief explains why.
Topic:
Economics and Regional Cooperation
Political Geography:
Europe

94. How to assess a rotating presidency of the Council under the Lisbon rules

Author:
Piotr Maciej Kaczyński
Publication Date:
02-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
On 1 January 2011, Hungary, the third member of the European Union to join the club in 2004, took over the presidency of the Council of the European Union. This represents the first presidency of a newer member state under Lisbon Treaty rules. After the new treaty entered into force on 1 December 2009, all rotating presidencies are, in a sense, first time presidencies. Their relative success now depends more on administrative ability than political leadership.
Topic:
Politics, Regional Cooperation, and Governance
Political Geography:
Europe

95. Debt reduction without default?

Author:
Daniel Gros and Thomas Mayer
Publication Date:
02-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
This paper proposes a two-step, market-based approach to debt reduction: · Step 1.The European Financial Stability Facility (EFSF) would offer holders of debt of the countries with an EFSF programme (probably Greece, Ireland and Portugal = GIP) an exchange into EFSF paper at the market price prior to their entry into an EFSF-funded programme. The offer would be valid for 90 days. Banks would be forced in the context of the ongoing stress tests to write down even their banking book and thus would have an incentive to accept the offer. · Step 2. Once the EFSF had acquired most of the GIP debt, it would assess debt sustainability country by country. a) If the market price discount at which it acquired the bonds is enough to ensure sustainability, the EFSF will write down the nominal value of its claims to this amount, provided the country agrees to additional adjustment efforts (and, in some cases, asset sales). b) If under a central scenario this discount is not enough to ensure sustainability, the EFSF might agree on a lower interest rate, but with GDP warrants to participate in the upside.
Topic:
Debt, Monetary Policy, and Financial Crisis
Political Geography:
Europe

96. Strategic Oil Stocks and Security of Supply

Author:
Giacomo Luciani and François-Loïc Henry
Publication Date:
06-2011
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Holding strategic oil stocks is at first sight an obvious tool to address potential disturbances in supplies. Rationally defining the desirable size of stocks and designing rules for their predictable use is an elusive task, however. A key conceptual difficulty arises in the distinction between commercial and strategic stocks, because a physical shortfall in the oil supply will inevitably lead to an increase in prices. But if strategic stocks are utilised when prices increase they become indistinguishable from commercial stocks. This paper reviews the legislation in force in the US and the EU on the use of strategic oil stocks as well as the emergency response systems of the International Energy Agency. It finds that such measures have been activated rarely and in dubious circumstances. Alternative approaches are proposed consisting of encouraging companies and major consumers to hold larger stocks and seeking a cooperative agreement with oil-producing countries for mutually beneficial stock management.
Topic:
Security, Energy Policy, Markets, and Oil
Political Geography:
United States and Europe

97. Distributional Consequences of Climate Change Impacts on the Power Sector: Who gains and who loses?

Author:
Dirk Rübbelke and Stefan Vögele
Publication Date:
05-2011
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Climate change tends to negatively affect the power sector, inter alia, by causing cooling problems in power plants and impairing the water supply required for hydro-power generation. In future, when global warming is expected to increase, autonomous adaptation to climate change via international electricity markets inducing reallocations of power generation may not be sufficient to prevent supply disruptions. Furthermore, the consequent changes of supply patterns and electricity prices might cause an undesirable redistribution of wealth both between individual power suppliers and between suppliers and consumers. This study ascertains changes in European power supply patterns and electricity prices caused by ongoing global warming as well as related redistribution of wealth for different climate change scenarios. Our results confirm that autonomous adaptation in the power sector should be complemented by planned public adaptation in order to preserve energy security and to prevent undesired distributional effects.
Topic:
Climate Change, Economics, Energy Policy, and Markets
Political Geography:
Europe

98. Is the EU internal market suffering from an integration deficit? Estimating the 'home-bias effect'

Author:
Consuelo Pacchioli
Publication Date:
05-2011
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
As an alternative to measuring the extent of market integration, 'home-bias' indicates the degree to which economic agents 'over-prefer' to transact with domestic agents rather than agents from other EU countries. Such an exclusive preference is measured against a benchmark of (ideal) market integration and is called 'home-bias'.
Topic:
International Trade and Finance, Markets, and Regional Cooperation
Political Geography:
Europe

99. Governance of a Fragile Eurozone

Author:
Paul De Grauwe
Publication Date:
05-2011
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
When entering a monetary union, member countries change the nature of their sovereign debt in a fundamental way, i.e. they cease to have control over the currency in which their debt is issued. As a result, financial markets can force these countries' sovereigns into default. In this sense, the status of member countries of a monetary union is downgraded to that of an emerging economy. This makes the monetary union fragile and vulnerable to changing market sentiments. It also makes it possible that self-fulfilling multiple equilibria arise.
Topic:
Debt, Markets, Regional Cooperation, and Financial Crisis
Political Geography:
Europe

100. Taking Stock: EU Common Commercial Policy in the Lisbon Era

Author:
David Kleimann
Publication Date:
04-2011
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
The first 16 months of the EU's common commercial policy (CCP) in the post-Lisbon period provide indicative insights into how the European Parliament, the European Commission and the Council of Ministers interpret their respective roles under the new legal framework introduced by the Lisbon Treaty. This paper analyses the amendments, the institutional capacities to respond to the reform challenges and the evolving institutional balance applying to Lisbon-era common commercial policy. Against this backdrop, the paper gives an overview of the changing dynamics of EU trade and investment policy in a context of enhanced politicization resulting from the European Parliament's involvement in the decision-making process. Particular importance is given to the question whether enhanced EP involvement in decision-making has the potential to lead to a scenario resembling the policy process in the United States, where congressional responsibility for trade and investment policy has resulted in the capture of the policy agenda by special interest groups and snail-paced policy progress (if any) in recent years. Accordingly, the paper scrutinizes the political preferences that the European Parliament is introducing into current European trade policy debates as well as the framework legislation and trade agreements. Finally, it is argued that parliamentary involvement in making common commercial policy has the potential to narrow the gap between European public political preferences and perceptions, on the one hand, and actual EU trade policies on the other, and to place EU trade and investment policies on a foundation of renewed public political support. In the author's view, however, it is imperative that such an achievement is based on well-informed, responsible, sustainable and clearly communicated policy proposals from the MEPs, who respond to and seek to balance the multiplicity of interests of CCP stakeholders in European civil society and respect the Union's international obligations.
Topic:
Economics, International Trade and Finance, and Treaties and Agreements
Political Geography:
Europe