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111. Only a more active ECB can solve the euro crisis

Author:
Paul De Grauwe
Publication Date:
08-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The biggest threat for the eurozone is the contagion of the Greek sovereign debt crisis to the rest of the system. If the Greek crisis could be isolated, it would barely matter for the eurozone as a whole. After countless crisis meetings of the European Council, however, it has to be admitted that the European leaders have failed to isolate the Greek crisis and to stop the forces of contagion. The latest meeting of the heads of state or government of the euro area on July 21st is no exception.
Topic:
Debt, Markets, Regional Cooperation, and Financial Crisis
Political Geography:
Europe

112. Spain's Constitutional Reform: What is seen and not seen

Author:
José M. Abad and Javier Hernández Galante
Publication Date:
09-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
On September 7th, five weeks after the European Central Bank (ECB) started buying Spanish bonds as part of its Securities Market Programme, and four weeks since Merkel and Sarkozy announced their proposal of writing debt limits into national laws, the Spanish Parliament has approved a constitutional reform that, by constraining the general government's spending and borrowing capacity, aims to mitigate concerns over public finances. This reform, the second since the current Constitution was enacted by referendum in 1978, has been made possible by an agreement between the ruling socialists (PSOE) and the main opposition party (conservative PP).
Topic:
Economics, Markets, and Labor Issues
Political Geography:
Europe and Spain

113. Why has the crisis been bad for private pensions, but good for the flat tax? The sustainability of 'neoliberal' reforms in the new EU member states

Author:
Miroslav Beblavý
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
In this paper, we examine two questions related to the sustainability of the major, neoliberal, economic and social reforms in the new EU member states, namely the flat income tax and private pension pillars. First, we look at the relationship between the political consensus/controversy at the time major policy reforms were passed and the future sustainability of these reforms after a change of government. Second, we explore what we call a paradox of reverse sustainability, whereby the flat income tax has been more politically resilient during the global financial and economic crisis than private pensions, even though ex ante expectations and the literature would lead us to expect the opposite.
Topic:
Economics and Labor Issues
Political Geography:
Europe

114. Speculative Attacks within or outside a Monetary Union: Default versus Inflation (what to do today)

Author:
Daniel Gros
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
Is a high level of public debt inherently more dangerous within a monetary union? During the 1990s it was often argued that only by entering the EMU could Italy (or Spain) protect itself from the high interest rates it had to pay on its large public debt. The argument was that by joining the single currency, Italy could convince financial markets that it would not inflate away the value of its debt and hence benefit from lower risk premia.
Topic:
Debt, Economics, and Financial Crisis
Political Geography:
Europe, Spain, and Italy

115. A Call to Members of the European Parliament: Take transparency seriously and enact the 'legislative footprint'

Author:
Lukas Obholzer
Publication Date:
10-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The code of conduct that was agreed by a cross-party working group of the European Parliament (EP), the EP Bureau and Conference of Presidents, is a watered-down compromise that lacks provision for the introduction of the 'legislative footprint' that the plenary requested the Bureau to set up. The legislative footprint is a document that would detail the time, person and subject of a legislator's contact with a stakeholder. Published as an annex to legislative reports, it would provide insight into who gave input into draft legislation. Unfortunately, the Constitutional Affairs (AFCO) Committee with Carlo Casini (EPP) as Chair and Rapporteur has so far failed to improve the draft in this respect. Against a backdrop of past scandals and recent criticism of early agreements negotiated in trilogues behind closed doors, the EP is about to miss an opportunity to show that it has learnt its lesson, and that it takes seriously its role as guarantor of legitimacy in EU decision-making. Transparency means proactive action: by adding a provision for a legislative footprint that identifies the interest representatives with whom key actors met and from whom they received advice, Members of the European Parliament (MEPs) have a chance to turn the EP into a role model for parliamentary transparency in a pluralistic democracy.
Topic:
Climate Change, International Organization, and Law
Political Geography:
Europe

116. Do Germans support the euro?

Author:
Daniel Gros and Felix Roth
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper analyses public support for the euro in Germany. Drawing from the results of regular Eurobarometer surveys, it finds that the ongoing financial and sovereign debt crisis has reduced support for the euro among German citizens, but not dramatically so – at least not yet. In the 1990s, the German public was sceptical towards the euro. But since the introduction of euro banknotes and coins, a clear majority of citizens supports the euro – despite the financial and sovereign debt crisis. Moreover, on average, support for the euro is at a similar level in Germany as it is elsewhere in the euro area.
Topic:
Economics, Regional Cooperation, Monetary Policy, and Financial Crisis
Political Geography:
Europe and Germany

117. The Enduring Popularity of the Euro throughout the Crisis

Author:
Felix Roth, Felicitas Nowak-Lehmann D., and Lars Jonung
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper analyses the evolution of public support for the euro from 1990 to 2011, using a popularity function approach, focusing on the most recent period of the financial and sovereign debt crisis. Exploring a huge database of close to half a million observations covering the 12 original euro area member countries, we find that the ongoing crisis has only marginally reduced citizens' support for the euro – at least so far. This result is in stark contrast to the sharp fall in public trust in the European Central Bank. We conclude that the crisis has hardly dented popular support for the euro while the central bank supplying the single currency has lost sharply in public trust. Thus, the euro appears to have established a credibility of its own – separate from the institutional framework behind the euro.
Topic:
Economics, Regional Cooperation, and Financial Crisis
Political Geography:
Europe

118. 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
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

119. 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
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

120. EU Federalism in Crisis

Author:
Karel Lannoo
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
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