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382. Reforming the Composition of the ECB Governing Council in View of Enlargement: An Opportunity Missed!
- Author:
- Daniel Gros
- Publication Date:
- 05-2003
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies
- Abstract:
- It is widely accepted that enlargement requires reform of the highest decision-making bodies of the European Central Bank (ECB). In particular, there are concerns that the Governing Council, which is composed of the six-member Executive Board of the ECB plus the governors of the participating national central banks (NCBs), will grow too large to work efficiently. In the absence of reform, it could end up having over 30 members - resembling more a mini-parliament than a decision-making body that has to manage a global currency in fast-moving financial markets. Moreover, the accession of a number of small countries is often perceived as a threat to the "power balance" in the Governing Council.
- Topic:
- Government, Human Rights, and International Organization
- Political Geography:
- Europe
383. Constitutionalising the Open Method of Coordination - What Should the Convention Propose?
- Author:
- Gráinne De Búrca and Jonathan Zeitlin
- Publication Date:
- 03-2003
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies
- Abstract:
- Within the Convention process, the final reports of no less than four separate working groups - those on Simplification, Complementary Competences, Economic Governance and Social Europe - have come out in favour of including the 'Open Method of Coordination' (OMC) within the Constitutional Treaty. The relevant sections of these reports are attached in an annex.
- Topic:
- Government, Human Rights, and International Organization
- Political Geography:
- Europe
384. A Public Stability Pact for Public Debt?
- Author:
- Daniel Gros
- Publication Date:
- 01-2003
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies
- Abstract:
- There is an urgent need to link the excessive deficit procedure with the issue of sustainability and hence the evolution of public debt. This note shows that there exists a simple way to introduce the evolution of public debt in the Stability Pact, which so far has focused exclusively on deficits. The link starts from the Maastricht criterion for participation in EMU concerning public debt and its reference value of 60% of GDP. The Maastricht criterion on public debt stipulates that if public debt exceeds 60% of GDP, it must be 'sufficiently diminishing and approaching the reference value at a satisfactory pace''.This note provides a numerical rule for evaluating whether public debt is indeed diminishing 'at a satisfactory pace'. This numerical rule is in accordance with the reference values in the Treaty and could be used as the basis for an 'excessive debt procedure'.
- Topic:
- Government, Human Rights, and International Organization
- Political Geography:
- Europe
385. Estimating the Effects of Fiscal Policy in OECD Countries
- Author:
- Roberto Perotti
- Publication Date:
- 10-2002
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- This paper studies the effects of fiscal policy on GDP, prices and interest rates in 5 OECD countries, using a structural Vector Autoregression approach. Its main results can be summarized as follows:1 ) The estimated effects of fiscal policy on GDP tend to be small: positive government spending multipliers larger than 1 tend to be the exception; 2) The effects of fiscal policy on GDP and its components have become substantially weaker over time; 3) Under plausible values of the price elasticity, government spending has positive effects on the price level, although usually small; 4) Government spending shocks have significant effects on the nominal and real short interest rate, but of varying signs; 5) In the post-1980 period, net tax shocks have positive short run effects on the nominal interest rate, and typically negative or zero effects on prices; 6) The US is an outlier in many dimensions; responses to fiscal shocks estimated on US data are often not representative of the average OECD country included in this sample.
- Topic:
- Economics and Government
- Political Geography:
- United States and Europe
386. Improving the Governance of European Foreign Aid: Development Co-Operation as an Element of Foreign Policy
- Author:
- Carlos Santiso
- Publication Date:
- 10-2002
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- Should European Union (EU) member states 're-nationalise' foreign aid? Considering the dismal record of the aid managed by the European Commission, this is a legitimate question that European leaders nevertheless seem unwilling to address seriously. Like in America, there is heightened debate across Europe on the purpose of the aid it provides to developing countries. The current debates on poverty reduction, debt relief and, more broadly, the effectiveness of development assistance have brought renewed light on foreign aid.
- Topic:
- Foreign Policy, Development, and Economics
- Political Geography:
- America and Europe
387. The Economic Impact of Enlargement on the European Economy: Problems and Perspectives
- Author:
- Paul Brenton
- Publication Date:
- 10-2002
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- Much of the attention on the economic aspects of the forthcoming enlargement of the EU have concentrated upon the high-profile issues which are linked to the level of relative economic development in the acceding countries; the perceived threat of large-scale migration and the budgetary costs arising from implementation of EU agricultural and regional policies. This paper briefly discusses that these are not insurmountable problems and stresses that the main difficulties from the next enlargement may arise from the effective inclusion of the acceding countries into the Single Market, the microeconomic hub of the EU. We discuss that the process of regulatory harmonisation will become more difficult in an EU of 25 or more members, which entails greater emphasis on the principle of mutual recognition as the main tool for ensuring freedom of movement of goods and services. However, mutual recognition has its limits and is likely to be less effective the more diverse the countries involved.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- Europe
388. Who Needs Foreign Banks?
- Author:
- Daniel Gros
- Publication Date:
- 09-2002
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- This paper shows that countries with weak banking system and fiscal institutions, might benefit from the presence of foreign banks, which can constitute a commitment and transparency device. Foreign banks can also reduce the probability of self-fulfilling speculative attacks. A strong presence of foreign banks can make a currency peg feasible in the first place by rendering it more resistant to speculative attacks. The European experience is instructive in this respect. In all of the candidate countries from Central and Eastern Europe (CEEC) the banking system is now dominated by foreign banks. This is now taken for granted, but it is unusual if one looks at the existing EU-15 members, where foreign banks play a marginal role in even the smallest economies.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- Europe
389. Interdependent Growth in the EU: The Role of Trade
- Author:
- María Garcia-Vega and José A. Herce
- Publication Date:
- 08-2002
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- After properly modelling growth externalities and using spatial econometric techniques we investigate whether economic integration promotes interdependent growth among countries. We conclude that this has been indeed the case for advanced OECD countries and that, for those countries belonging to the EU, through successive enlargements, the effect has been even stronger. More precisely, if every (trade) partner of a given country experiences an extra growth of 1 percentage point, this economy will profit from an extra 0.5 point, and if this country belongs to the EU it will have an additional increase of its rate of growth of 0.2 points. Both figures can be interpreted as growth externalities with the latter suggesting that an integration process like the one followed by the EU has an (positive) effect on growth.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- Europe
390. Making EU Trade Agreements Work: The Role of Rules of Origin
- Author:
- Paul Brenton and Miriam Manchin
- Publication Date:
- 03-2002
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- A key element of the EU's free trade and preferential trade agreements is the extent to which they deliver improved market access and so contribute to the EUs foreign policy objectives towards developing countries and neighbouring countries in Europe, including the countries of the Balkans. Previous preferential trade schemes have been ineffective in delivering improved access to the EU market. The main reason for this is probably the very restrictive rules of origin that the EU imposes, coupled with the costs of proving consistency with these rules. If the EU wants the 'Everything but Arms' agreement and free trade agreements with countries in the Balkans to generate substantial improvements in access to the EU market for products from these countries then it will have to reconsider the current rules of origin and implement less restrictive rules backed upon by a careful safeguards policy.
- Topic:
- Foreign Policy, Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
- Political Geography:
- Europe and Balkans