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351. Sustainability of Greek Public Debt

Author:
William R. Cline
Publication Date:
10-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
On July 21, 2011, the heads of government of the euro area announced a new plan to address the Greek debt crisis. This policy brief presents a simulation exercise that examines whether the new arrangements are likely to provide a sustainable solution. The analysis focuses on four key measures: gross debt relative to GDP; net debt relative to GDP; net interest payments relative to GDP; and amortization of medium-and long-term debt coming due during the year in question, relative to GDP. The new Greek package shows prospective future progress on all four measures, and Greek debt looks much more sustainable after the package than before. Debt also appears considerably more manageable if the criterion is net debt or interest burden rather than gross debt ratio, although even for gross debt the ratio is down substantially by 2020. It also becomes clear that the major contribution of the private-sector involvement (PSI) part of the package is in the form of sharply cutting amortization due, although by avoiding large new borrowing at crisis-level interest rates it also alleviates the interest burden that would otherwise occur.
Topic:
Debt, Economics, Regional Cooperation, and Financial Crisis
Political Geography:
Europe and Greece

352. Swimming in murky waters: Challenges in developing the EU's external representation

Author:
Piotr Maciej Kaczyński
Publication Date:
09-2011
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
In the area of external affairs, the Treaty of Lisbon has introduced a number of innovations into the functioning of the European Union. The initial phase of these innovations was in 2010 when two parallel processes took place. First, the set-up of the European External Action Service (EEAS) was negotiated and subsequently implemented. Second, a number of developments have taken place in the sphere of the EU's external representation. Soon after December 2009, when the new treaty entered into force, it became clear that it was wide open to interpretation. Since most actors continued to interpret the treaty provisions in their favour, the EU had to engage in difficult negotiations on several occasions. In fact, the new treaty impacts not only EU relations with third states and within international organizations, it also has a significant impact on the member states' relations with third states as well as on their representation within international organizations.
Topic:
Foreign Policy, Regional Cooperation, and Treaties and Agreements
Political Geography:
Europe

353. Pro-European Presidency: Poland on the way to the club of heavyweight EU members

Author:
Tiia Lehtonen
Publication Date:
09-2011
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
On 1 July 2011, Poland took over the Presidency of the Council of the European Union. It is the first Presidency for Poland during its seven-year EU membership. As an ambitious, large and relatively new member state, Poland is now striving towards joining the club of heavyweight players in the EU. Although the Polish Government and political elite are highly pro-European, this work remains nothing but demanding. Nevertheless, Poland is no doubt the most powerful state in the Presidency trio compris¬ing of Poland, Denmark and Cyprus.
Topic:
Regional Cooperation and Governance
Political Geography:
Europe and Poland

354. Forever a Pilot? Assessing the policy dialogue and project-based cooperation in energy efficiency between the EU and Russia

Author:
Vadim Kononenko
Publication Date:
09-2011
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs
Abstract:
Cooperation between the EU and Russia in the field of energy efficiency has come under the spotlight in the past two years. In Europe and Russia alike, enthusiasm and expectations are rising that energy efficiency will become an area for successful cooperation including the EU-Russia Partnership for Modernization and other frameworks for cooperation. Yet, the practicalities of that cooperation can still be characterized as being in the "pilot phase". This has become apparent in most of the interviews conducted during this study. Despite the enthusiasm, there is a noticeable and recurring feeling of uncertainty over how the cooperation might turn out in practice and whether the declared goals and intentions will be matched by material results. At the same time, the view that was also commonly expressed was that the actors involved in the cooperation activities were ready and willing to steer cooperation forwards onto a more project-oriented footing, not focusing on merely talking and exchanging views and experiences.
Topic:
Energy Policy, Regional Cooperation, and Bilateral Relations
Political Geography:
Russia and Europe

355. Eurozone finally agrees a deal but uncertainties remain unresolved

Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Oxford Economics
Abstract:
After protracted negotiations, Eurozone leaders finally agreed on a new package of measures last week. The outline deal has a three-pronged approach aimed at tackling the main aspects of the crisis: reducing Greece's debt burden, avoiding a credit crunch by recapitalising European banks, and preventing contagion to other countries via a boost to the EFSF.
Topic:
Debt, Economics, Markets, Regional Cooperation, and Financial Crisis
Political Geography:
Europe and Greece

356. After €urogeddon? Frequently asked questions about the break-up of the euro zone

Publication Date:
11-2011
Content Type:
Working Paper
Abstract:
Thirteen years since its launch, Europe's common currency is in crisis. A Greek debt restructuring is inevitable, and concern is now focusing on contagion among the larger euro area economies. The prospect of a cascade of disorderly sovereign defaults is chilling investors, and the departure of some members from the common currency is increasingly being discussed. The Economist Intelligence Unit's central forecast is that the currency area will survive, but the odds of failure are too high to ignore. To help clients anticipate the implications for their operations of a collapse in the euro zone, we have compiled a list of frequently asked questions (FAQ), exploring the potential scope and impact of a euro-area break-up. We look at what “break-up” could mean, although in practice numerous possible permutations exist between the extremes of departure by a single country and the exit of all 17 members.
Topic:
Economics, International Trade and Finance, Markets, Regional Cooperation, Monetary Policy, and Financial Crisis
Political Geography:
Europe

357. Between consensus and confusion: Institutional changes and policy challenges in the EU's development policy Post-Lisbon

Author:
Marikki Stocchetti
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The Lisbon Treaty anchored the EU development policy at the forefront of the Union's external relations. For the development policy, this provides an opportunity to improve its own role and functions in relation to its own targets, as well as in relation to the Common Foreign and Security Policy and the trade policy. To take this opportunity, the EU development policy actors need to find a means and a vision in the context of the changing institutional landscape and the EU development policy overhaul. A stronger EU development policy as a part of the external relations equation depends on the EU development actors' capability to act jointly in the area of shared competency, and to define the policy's focus and content vis-à-vis the other branches of the EU's external relations. This is of utmost importance in the new institutional context that was formed to implement the Lisbon Treaty. Most notably, the European External Action Service (EEAS) risks inheriting the previous organizational challenges of the EU development policy and creating new ones. The EU Commission proposal 'Agenda for Change' (October 2011) still passes up the opportunity to present a strong vision for the development policy in the EU's external relations along the lines of the Lisbon Treaty. While enhancing the common agenda for the CFSP and the development policy is conducive to development policy objectives, it is alarming that the policy proposal turns a blind eye to the role of the EU trade policy.
Topic:
Development, International Trade and Finance, Regional Cooperation, and Treaties and Agreements
Political Geography:
Europe and Lisbon

358. The empowered European Parliament: Accommodation to the new functions provided by the Lisbon Treaty

Author:
Teija Tiilikainen
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The European Parliament achieved full legislative powers when the Lisbon Treaty came into force, as most of those policy fields that had formerly been beyond the reach of the EP were duly added to these powers. In the implementation of the Lisbon Treaty, the EP's strengthened position is characterized as a vigorous promotion of arrangements favourable to its own position in the EU decision-making process. Important changes have taken place in the roles and functions of major parliamentary committees along with the extension of the EP's powers; the changes are most substantial in the Committee on Agriculture and Rural Development (AGRI) and in the Committee on International Trade (INTA). Concerns about the spread of undemocratic legislative practices and weaknesses in administrative capacities have been raised since the EP has been accommodated to its new powers.
Topic:
Democratization, Regional Cooperation, Treaties and Agreements, and Governance
Political Geography:
Europe and Lisbon

359. 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

360. 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