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36731. Can Italy and Spain survive rates of 6-7%?

Author:
Daniel Gros
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The sentiment that the euro is now in real danger is based in large part on the widespread conviction that interest rates of 6-7% are simply unsustainable for both Italy and Spain., After taking a closer look at the fundamentals, however, Daniel Gros concludes in this new Policy Brief that both countries should be able to live with this level of interest rates for quite some time, but only if they mobilize domestic savings, which remain strong in both countries. For Spain, some debt/equity swaps are also needed.
Topic:
Debt, Economics, Markets, and Financial Crisis
Political Geography:
Europe, Spain, and Italy

36732. Unholy compromise in the eurozone and how to right it

Author:
Stefano Micossi
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Two years after the first Greek rescue in May 2010, crisis management in the eurozone has still failed to restore confidence. A vivid picture of the situation can be found in Figure 1: the constellation of spreads on ten-year sovereign debts over the Bund in the eurozone is wider than it was before monetary union, as though financial markets had already discounted its breakdown. Temporary respites, notably in the early part of 2012, have not interrupted the trend of increasing divergence that risks undermining the credibility of adjustment efforts under way.
Topic:
Debt, Economics, Markets, Monetary Policy, and Financial Crisis
Political Geography:
Europe

36733. Pre-empting Technical Barriers in the Single Market

Author:
Jacques Pelkmans and Anabela Correia de Brito
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Effective enforcement and compliance with EU law is not just a legal necessity, it is also of economic interest since the potential of the Single Market will be fully exploited. Enforcement barriers generate unjustified costs and hindrances or uncertainty for cross-border business and might deprive consumers from receiving the full benefit of greater choice and/or cheaper offers.
Topic:
Economics, Markets, Monetary Policy, and Law
Political Geography:
Europe

36734. Central Banks in Times of Crisis: The FED vs. the ECB

Author:
Daniel Gros, Cinzia Alcidi, and Alessandro Giovannini
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Different economic and financial structures require different crisis responses. Different crises also require different tools and resources. The first 'stage' of the financial crisis (2007-09) was similar on both sides of the Atlantic, and the response was also quite similar. The second stage of the crisis is unique to the euro area. Increasing financial disintegration within the region has forced the ECB to become the central counterparty for the entire cross-border banking market and to intervene in the sovereign bond market of some stressed countries. The actions undertaken by the European Central Bank (ECB), however, have not always represented the best response, in terms of effectiveness, consistency and transparency. This is especially true for the Securities Markets Programme (SMP): by de facto imposing its absolute seniority during the Greek PSI (private sector involvement), the ECB has probably killed its future effectiveness.
Topic:
Debt, Economics, International Trade and Finance, Markets, Monetary Policy, and Financial Crisis
Political Geography:
Europe

36735. A simple model of multiple equilibria and sovereign default

Author:
Daniel Gros
Publication Date:
07-2012
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper presents a simple model that incorporates two types of sovereign default cost: first, a lump-sum cost due to the fact that the country does not service its debt fully and is recognised as being in default status, by ratings agencies, for example. Second, a cost that increases with the size of the losses (or haircut) imposed on creditors whose resistance to a haircut increases with the proportional loss inflicted upon them.
Topic:
Debt, Economics, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
Europe

36736. A Fight for the Spoils: The Future Role of Syria's Armed Groups

Author:
Stephen Starr
Publication Date:
08-2012
Content Type:
Journal Article
Journal:
CTC Sentinel
Institution:
The Combating Terrorism Center at West Point
Abstract:
ON AUGUST 6, 2012, President Bashar al-Assad's prime minister defected, dealing another blow to the Syrian leader's efforts to preserve his regime. Since the start of the Syrian uprising in March 2011, the strong central authority the al-Assad regime built and institutionalized during four decades has been rapidly crumbling. Yet the factors that made Libya's uprising succeed—a united and organized opposition, sparse population patterns and a weak army—are absent in Syria. The country becomes more militarized after each passing week, with various, competing rebel groups gaining more leverage and territory—and even reportedly committing their own massacres. For now, the rebels—habitually termed the Free Syrian Army s¬(FSA)—mostly operate independently on tribal and geographic bases, and interaction between them, violent or cooperative, is for the most part relatively rare. Jihadist groups, such as Jabhat al-Nusra, have also definitively entered the fray.
Political Geography:
Libya and Syria

36737. Governing for the Future: What Governments can do

Author:
Peter Ho
Publication Date:
09-2012
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
The paper looks at how governments can be better prepared to deal with increasing complexity. Complexity produces strategic shocks and generates wicked problems. But complexity is different from merely complicated. A more complex operating environment increasingly challenges the paradigm of governments. A whole-of-government approach is a vital response to managing an increasingly complex world. There are also various tools that can be deployed to help governments better deal with complexity, and reduce the frequency and amplitude of strategic shocks.
Topic:
Security, Development, Economics, Government, Political Economy, Politics, and Governance

36738. The Durban Platform Negotiations: Goals and Options

Author:
Daniel Bodansky
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
In December 2011, parties to the United Nations Framework Convention on Climate Change (UNFCCC) adopted the Durban Platform for Enhanced Action, which launched a new round of negotiations aimed at developing "a protocol, another legal instrument or an agreed outcome with legal force" for the post-2020 period. The Durban Platform negotiations got underway this year and are scheduled to conclude in 2015. This Viewpoint analyzes the elements of the Durban Platform and the possible role that a new instrument might play.
Topic:
Climate Change, Energy Policy, Treaties and Agreements, and United Nations

36739. Global Oil Production is Surging: Implications for Prices, Geopolitics, and the Environment

Author:
Leonardo Maugeri
Publication Date:
06-2012
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
Oil Production Growth is Global. Global oil output capacity is likely to grow from 93 million barrels per day today to 110 million barrels per day by 2020—the largest increase in a single decade since the 1980s. The surge in oil production capacity will occur almost everywhere, with the largest increases in Iraq, the United States, Canada, Brazil, and Venezuela. United States Will Experience Unprecedented Output. Technological advances will increase the production of “unconventional” oil in the United States, which is in the midst of a shale boom. The Bakken/Three Forks formation in North Dakota alone has as much untapped shale/tight oil as a Persian Gulf country. Oil Prices May Collapse. If oil prices remain at or above $70 per barrel, investments will sustain the 20 percent increase in oil production capacity by 2020. However, world demand is sluggish due to the lagging economy and focus on energy efficiency. If these trends continue, we could see a significant dip—or even a temporary collapse—of oil prices. Shifting Market Has Geopolitical Consequences. While the Western Hemisphere could become oil self-sufficient by 2020, Iraq's oil output will also substantially increase as it stabilizes. China may escalate its competitive and political influence in the Persian Gulf and other oil-producing hotspots, including Canada, Venezuela, and possibly the United States. Oil Boom Must Trigger Environmental Action. Enforcement of environmental regulation and major investment in emission-reducing technologies must accompany the development of unconventional oil. Without this balance between industry and environmental interests, new oil production projects will be stymied or delayed.
Topic:
Economics, Industrial Policy, Oil, Political Economy, and Natural Resources
Political Geography:
United States

36740. Getting Better Value for Money in Malaria Control

Author:
Amanda Glassman and Paul Wilson
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Malaria kills hundreds of thousands of people every year and is among the leading causes of death for children under five. While funding for malaria control increased dramatically in recent years, gains are fragile and budgets are now stagnating. In that fiscal reality, getting better value for money is more important than ever. In this brief, we present a framework for increasing the efficiency of malaria-control initiatives that addresses where to intervene, what interventions are best, and how to deliver them most effectively. Much of what is spent on malaria control is already spent well, but health policymakers and practitioners could get better value and save more lives by implementing the following recommendations: Improve procurement procedures for bednets. Reduce overlap of insecticide-spraying and bednet programs. Expand the use of rapid diagnostics. Scale up intermittent presumptive treatment for pregnant women and infants.
Topic:
Health and Infectious Diseases