Many commentators have recently argued that Germany should rethink its export-led growth model because it did not prevent a fall in its GDP, which was even larger than that experienced in the US or France. In this Commentary, CEPS Director Daniel Gros explores whether this model is truly so bad if it has allowed Germany to carry on consuming while consumers elsewhere have had to tighten their belt considerably.

In light of the immature state of preparations for the international climate change negotiations in Copenhagen in December, CEPS Senior Research Fellow Christian Egenhofer predicts that the best outcome to be hoped for at this point is an agreement to continue negotiations in earnest. He warns the developed countries, led by the EU, not to accede too easily to the less-founded demands of developing countries, just to be able to declare a political victory.

In assessing the current proposals for financial market regulation in response to the financial crisis, CEPS Chief Executive Karel Lannoo laments that policy-makers and regulators seem intent on further complicating the already complex maze of financial market rules. Rather than merely amending existing rules on the fringes, he calls for fundamental reform of the capital adequacy system.

Just as Europe once exported its own state system of international relations to the rest of the world, so too are Asian countries now reshaping the international system. The conditions for international relations are changing to the advantage of large countries with a strong state, and China plays an important role in this process. If the European Union wants to remain an influential player in the international order, it needs to make clear political-strategic choices.

There is no doubt that government deficits are unsustainable, but that does not imply that they are undesirable today. The uncomfortable truth is that in order for private debt levels to become sustainable again, government debt must temporarily become unsustainable.

In the immediate aftermath of the European Parliament elections, CEPS Director Daniel Gros offers a quick assessment of the outcome for Europe and for the European Parliament itself.

Now, almost two years into the worst financial crisis in Europe’s recent history, CEPS CEO Karel Lannoo finds that the EU seems to be incapable of drawing the necessary lessons. If Europe is serious about tackling the crisis and wants to be seen as such, he argues that it needs to make proposals for a European system of financial supervisors, not a network. This means empowering a strong centre which can, following the principle of subsidiarity, effectively and unequivocally act on behalf of the European interest and police national supervisory authorities.

While acknowledging that the G-20 meeting in London achieved remarkable success in laying the foundations for sound global governance, CEPS Chief Executive Karel Lannoo asks in this CEPS Commentary whether the world’s leaders will be able to deliver, given the hugely ambitious agenda they have set for themselves and in light of the fact that they remain a limited group of nations.

The world needs a watchdog institution for global economic stability. Most agree that the IMF is the only serious candidate, but IMF management and staff need more independence. This column argues that this could be achieved by having separate Executive Board voting procedures for lending and analytic decisions, and some independent members on the Board.

In this new commentary, CEPS Director Daniel Gros looks at the threat posed to EU banks by their exposure to capital flights and currency attacks in Eastern Europe, recommending the creation of a large scale, temporary European Financial Stability Fund to deal with the crisis.

CEPS Director Daniel Gros looks at the reported €270 billion in intangible assets reported on the balance sheets of the 12 largest European banks and wonders whether the "fair value" of this hot air in today's market circumstances could be close to zero.

In a new CEPS Commentary, Paul De Grauwe takes rating agencies to task for having systematically rewarded companies for taking too much risk in the past and for punishing companies today for taking too little, thereby exacerbating the financial crisis. The author is Professor of Economics at the University of Leuven and Senior Research Fellow at the Centre for European Policy Studies.

Since the Irish rejection of the Treaty of Lisbon on 12 June 2008, the European decision-making machinery has done what it does best: cooling down a hot political debate and carefully building a consensus. The European Summit has now determined what concessions will be made to the Irish in exchange for their ratification of the treaty: the College of Commissioners will continue to comprise one member per country beyond the year 2014 and Ireland will receive “necessary legal guarantees” on certain sensitive matters.

In his Commentary published in the run-up to the G20 summit in Washington on 15 November 2008, CEPS Director Daniel Gros attributes the global financial crisis to two macroscopic failures: monetary policy should have reacted earlier to the boom in house prices and regulators should have forced banks to accumulate larger reserves for the tougher times that had to come sooner or later. He asserts that the root causes for these failures need to be understood properly before trying to create a new Bretton Woods.