At the EU-Canada Summit on the 17th October in Montreal, it was announced that both parties got the green light to draw up the negotiating mandates for an “enhanced economic partnership” agreement. CEPS Research Fellow Selen Sarisoy Guerin argues that this ambitious new generation bilateral agreement will be one of a kind.

In assessing the October 12th euro area summit, Daniel Gros applauds the national leaders for taking decisive action that avoided a total breakdown in the short run, but laments the fact that the cost of the lack of fiscal solidarity will set back the integration of European financial markets by decades.

On the eve of the G7 meetings in Washington, Daniel Gros and Stefano Micossi find that what is missing is a body or a concerted initiative to take care of the inter-bank market, which has become dysfunctional almost everywhere. They warn that the G-7 governments must tackle this issue or be prepared to witness the funding crisis mutate into a global depression.

Observing that the US Congress was able to reach agreement over support to the US banking sector within two weeks, Arno Behrens bemoans the fact that the US and other governments remain reluctant to contribute significantly to the global climate change bill. Instead of buying bad assets, however, he asserts that climate change mitigation is an investment in a global public good and in future prosperity. While cautioning against taking a hasty decision, he argues that there is a strong case to be made for increasing global resources for adaptation and mitigation with all due speed.

This CEPS Commentary explores the cause of the rapid and intense deterioration suffered by the eurozone business cycle since early 2007. It finds that the key explanation lies in the exchange rate of the euro and points a finger at the European Central Bank for abdicating its responsibility to intervene in the foreign exchange market and to oppose exchange rate developments that are out of touch with economic forces.

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

In this commentary, CEPS Associate Fellow Paul De Grauwe looks at the lessons that can be learnt from the financial crisis, arguing that tighter market regulations should be re-introduced, and that new macroeconomic models will have to be developed in order to factor in financial stability as a new target.

CEPS Research Fellow Jorge Nùñez Ferrer expresses concern in this commentary over the implications of the recent price hikes in food commodities worldwide for the decisions that will be taken in the course of the ‘health check’ currently underway of the CAP and for the potential longer-term consequences for the EU budget review.

CEPS Director Daniel Gros argues in this Commentary that the solution to the ‘Irish crisis’ could be simple if the other countries are really determined to go ahead. At the forthcoming European Council meeting in Brussels, he suggests that member countries could simply sign the consolidated text of the Treaties which results from the incorporation of the amendments of the Lisbon Treaty into the old Treaty.

Senem Aydın Düzgit, CEPS Associate Research Fellow, finds in this Commentary that the current political tensions in Turkey date back further than the recent attempt by the Turkish judiciary to close down the governing Justice and Development Party (AKP), but are also linked to the broader issues of secularism versus Islamism in the country and may also have implications for Turkey’s uniquely complex status as EU accession candidate.

Last year the European Union began negotiating free trade agreements (FTAs) with South Korea, India and ASEAN. These negotiations are important because they are among the EU’s first round of new generation FTAs as called for in the Global Europe: Competing in the World communiqué. They are also important because if and when the agreements are signed, they will be the EU’s first bilateral FTAs in the region.

In this Commentary, CEPS Research Fellow Natalie Tocci finds reason for cautious optimism for the future of the conflict-ridden island of Cyprus as a result of the presidential elections in February in the Greek Cypriot south. At the same time, however, she voices concern over the narrow margin of victory enjoyed by Demetrios Christofias as well as the disillusionment and scepticism that has set in among the Turkish Cypriots.

A project initiated by Turkey’s official religious authority, the Diyanet, has attracted considerable attention from international media and been and “a controversial and radical modernisation of the religion”. Known as the ‘hadith project’, it calls, inter alia, for rendering the Prophet’s message in a comprehensible language and amending interpretations that no longer have any value. This Commentary elaborates the project in order to understand where it stands with respect to attempts to combat radical strands of Islam.

In this CEPS Commentary, CEPS Research Fellow Arno Behrens argues that the EU’s target of increasing the share of biofuels in transport to 10% by the year 2020 is unjustified, and that the reduction of greenhouse gas emissions could be achieved more efficiently with other technologies and policies.