CEPS Commentaries

211 - 240 of 401
29 March 2011

After numerous delays, the European Commission’s second Raw Materials Communication has now been published. Initially foreseen for November 2010 under the guidance of Enterprise and Industry Commissioner Tajani, the document finally saw the light of day in February 2011, after having been more or less appropriated by the cabinet of President Barroso.

18 March 2011

The economic philosophy behind the Competitiveness Pact now before the European Council can be summarized by two hypotheses:
1. If we fix (relative?) wages, no external imbalances can arise since relative costs determine export performance.
2. Higher productivity always means more ‘competitiveness’, and is thus always useful to reduce divergences.
On first sight, this Commentary finds that both theses seem to make sense, but on closer inspection, neither corresponds to reality.

18 March 2011

Europe now must decide which countries and banks have access to funding, and at what cost. Drawing on the timeless wisdom of William Shakespeare, Daniel Gros warns that those countries now struggling under a mountain of debt should have realized earlier that excessive reliance on borrowing invites excessive consumption and wasteful investment. But the leaders of Germany and the other creditor countries should also be aware that a lender can lose both its capital and its friends.
Daniel Gros is Director of the Centre for European Policy Studies.

16 March 2011

At the European Council on 11 March 2011, EU leaders agreed to the outlines of a new mechanism to deal with eurozone debt problems after the current mechanism expires in 2013. This Commentary argues that this mechanism is a continuation of the leaders’ preference for ‘tough talk and soft conditions’ and warns that the package is merely the next step down the slippery slope of EU taxpayers sharing the burden with Greek taxpayers.
Daniel Gros is Director of CEPS.

09 March 2011

Europe’s leaders have promised to find by the end of this month (March 2011) a comprehensive package, not only to end the euro crisis, but also to preserve the stability of the euro for the future. In the view of CEPS Director Daniel Gros, they are unlikely to succeed, unfortunately, because most of the elements of the package on the table so far at least deal with the symptoms and not the underlying cause of the crisis.

11 February 2011

Various forms of common ‘European bonds’, or more precisely eurobonds, have been proposed recently as a way out of the current euro crisis, with proponents stressing the promise of lower borrowing costs. While acknowledging that the proposal is tempting and even quite promising in theory, this Commentary by CEPS Director Daniel Gros finds it seems mostly to be wishful thinking.

10 February 2011

In this new Commentary, CEPS Chief Executive Karel Lannoo surveys the radical shift in bank capital requirements confirmed by the new Basel III Accord, with its focus on more and better quality capital, especially for the large banks. He finds, however, that the new framework is becoming very complex, and asks the big question that emerges: how does one determine when a bank is effectively Basel III-compliant, as some will soon start to claim.

07 February 2011

Michael Emerson asks in this latest CEPS Commentary: What next after the heady days of revolutionary euphoria in Tunis and Cairo? He observes that “now is that poignant moment of total uncertainty over the future, except for the certainty that the status quo cannot last much longer”. Inevitably, next comes the long haul of struggling democratic transitions, or other scenarios. He outlines four regime options for consideration by the various parties in the region.

25 January 2011

This Commentary argues that the EU should build up a world-class diplomatic corps, capable of becoming a major actor in global affairs. It is a collective effort by a group of EU policy analysts based at research institutes in Brussels and Leuven. It draws upon the findings and policy recommendations put forward in their new book Upgrading the EU’s Role as Global Actor – Institutions, Law and the Restructuring of European Diplomacy.

19 January 2011

The hangover from the rich countries' housing bust is likely to depress growth and keep unemployment high in 2011 – and for much of the next decade. But, as CEPS Director Daniel Gros explains in this new Commentary, the dream of homeownership is very much alive – and is a powerful economic force – in the emerging world.

19 January 2011

For the second time in a decade, central banks around the world have responded to the collapse of an asset bubble by moving aggressively to ease monetary policy, a tactic explicitly justified by the need to avoid a Japanese-style ‘lost decade’. The problem, however; as argued in this Commentary, is that Japan never lost a decade…
Daniel Gros is Director of CEPS.

19 January 2011

This Commentary presents preliminary key messages and recommendations of the CEPS Task Force on “The Strategic Energy Technology Plan: From Concept to Practice”, Taking the form of an ‘open letter”, it aims to express the views of the Task Force members in the run-up to the meeting of the Energy and Innovation European Council on 4 February 2011. It argues that a successful innovation policy needs an efficient Strategic Energy Technology (SET) Plan.

14 January 2011

To help both the United States and Europe grapple with their rising levels of government debt and large budget deficits, this Commentary suggests that EU policy-makers might be well advised to consider an innovative albeit quirky approach devised by Slovakia to deal with the problem, in which the personal prosperity of top national officials is based not only on wage developments in the economy, but also on the country’s fiscal prudence.

06 January 2011

In response to the horrific clan-based criminality, human trafficking and corruption that is rampant throughout Kosovo, Michael Emerson and Jan Wouters explore the options available to the EU in its self-appointed role as the leading force for the political transformation and economic integration of the whole of the Western Balkans into modern Europe and its values.

08 December 2010

Citing evidence that the levels of net trust in the national parliaments have dropped to -50% in three of the four troubled periphery eurozone countries (Ireland, Spain and Greece), this Commentary warns that the European and national policy-makers’ strategy of the three no’s – no bail-out, no default and no exit –appears to threaten political stability in these countries.
Felix Roth is a Research Fellow at CEPS.

07 December 2010

In his latest Commentary, CEPS Director Daniel Gros draws an analogy between the situation in the eurozone for investors today and a crowded cinema with only one emergency exit: everyone knows that in case of fire, only the first to leave will be safe. To avoid a stampede, he calls upon the IMF and the ECB to show investors that they have enough funding to finance the simultaneous exit of all short-term investors by immediately widening the exit door and by prominently displaying huge fire extinguishers.

06 December 2010

Despite its large size relative to the small Irish economy, the bailout announced by the Eurogroup following its meeting of 28 November 2010 is not working, as evidenced by the continuing rise in risk premiums. CEPS Director Daniel Gros argues in this commentary that part of the problem lies in a seemingly innocuous provision in the proposed permanent successor to the current European Financial Stability Facility in 2013.

06 December 2010

Muddling through isn’t working. This commentary argues that troubled eurozone nations should simultaneously open restructuring talks while continuing to service their debts normally. Germany, France and other core eurozone nations would have to stand ready to recapitalise the banks most exposed to the restructured debt. The ECB would then stabilise the banking system and the EFSF would stabilise sovereign debt. This big bang could be prepared in a weekend; the market already seems to be pricing it in.

Daniel Gros is the Director of CEPS.

10 November 2010

In this Commentary, Daniel Gros takes pains to discourage any great expectations from the 5th G20 summit taking place in Seoul, November 11-12, given the conflicting national policy imperatives that will be in strong evidence. He acknowledges, however, that a lot could be achieved through a frank exchange on key economic issues so that the world's leaders understand the concerns of their counterparts and agree to tone down the rhetoric.

10 November 2010

For decades, the world has complained that the dollar’s role as global reserve currency has given the US guaranteed access to cheap money. But there is no free lunch: in this Commentary, CEPS Director Daniel Gros tells the US that it must choose between job creation, which requires a more competitive exchange rate, and cheap financing of its external and fiscal deficits.

09 November 2010

Drawing an analogy with the ill-fated Exchange Rate Mechanism (ERM) of the pre-eurozone era, Paul De Grauwe argues in a new CEPS Commentary that the creation of a sovereign debt default mechanism is a very bad decision that will make the eurozone more fragile by making financial crises an endemic feature.

Paul De Grauwe is Professor of Economics at the Faculty of Business Economics at the University of Leuven and Senior Associate Research Fellow at CEPS.

02 November 2010

With multiple top-level political meetings scheduled in the near future to review progress of the European Neighbourhood Policy (ENP) and the Eastern Partnership (EaP), Michael Emerson examines the EU’s posture in two key areas – free trade and visa liberalisation – where something could be done promptly and which would mean something tangible for the states in the region. Instead, he is disappointed to report that the EU has devised long, long processes of conditionality for the partner countries to meet and has deferred concrete benefits to the distant future.

02 November 2010

At the European Council meeting of 28-29 October 2010, the heads of state reached a highly unexpected unanimous agreement to a ‘limited’ Treaty reform, which in turn would allow Germany to agree to a permanent crisis resolution mechanism, as a permanent successor to the temporary European Financial Stability Facility (EFSF).

28 October 2010

This Commentary identifies several key weaknesses and oversights implicit in the proposals on the table at the October 2010 European Council summit to discipline EU member states whose governments exceed EU deficit or debt limits. As a more effective alternative, the author proposes enlisting the power of opposition parties and the bond markets curb such excesses.
John Bruton is a member of the CEPS Board of Directors. He served as Taoiseach (prime minister) of Ireland from 1994 to 1997 and as the Ambassador of the European Union to the United States from 2004–09.

25 October 2010

In this CEPS Commentary, Daniel Gros seeks an alternative between indiscriminate liquidation, which contributed to the Great Depression in the US, and continuing liquefaction, which appears to be the official policy line in Europe today? In his view, the way out is controlled rescheduling and/or restructuring in order to avoid turning part of the euro periphery into ‘zombie countries’.

21 October 2010

In this review of the Commission’s Communication on the budget review, published on 19 October 2010, Jorge Núñez Ferrer finds that the proposals in general are healthy and commendable, but that the document has weaknesses, notably in its failure to address actual policies in any depth, especially agriculture, or to demonstrate any commitment to budgetary austerity. The latter oversight may prove particularly problematic in today’s atmosphere.

21 October 2010

This Commentary takes a close look at the recently leaked Commission’s Communication on the future of the CAP. The author finds it a carefully drafted document containing the usual CAP rhetoric punctuated by some apparently strong deviations from past doctrine. But once the objectives and policy proposals are reduced to their basic components, he discovers that much of the fizz disappears.
Dr Jorge Núñez Ferrer, Associate Research Fellow at CEPS, has written widely on the CAP and the EU budget.

18 October 2010

Drawing on the findings of a major research project investigating the relative contribution of ‘stakeholder value’ vs ‘shareholder value’ institutions to the economy, CEPS Senior Fellow Rym Ayadi argues, in a new CEPS Commentary, on behalf of the merits of diversity in banking models.

13 October 2010

In a new CEPS Commentary, Cinzia Alcidi, LUISS Research Fellow at CEPS, takes exception with the conventional wisdom explaining the continuous divergence in the cost of labour – a key indicator of competitiveness – since the start of EMU among the member countries of the eurozone.

06 October 2010

Any strategy by the EU towards making a meaningful contribution to the global effort of reducing GHG emissions needs to address the core of the problem: ‘coal’, or, more accurately, abundant coal. The failure in the United States, a rich economy with only a moderate dependency on coal, to introduce even a moderate carbon tax, means that it certain that no commitment will be forthcoming for the next generation from China, which is still much poorer and depends even more heavily on indigenous coal (and produces twice as much as the US).