The multiple attempts to restore confidence in the eurozone over the 18 months that have passed since the first Greek rescue in May 2010, have clearly failed. Indeed, following each round of emergency measures agreed by the eurozone summits, matters have turned for the worse. This contribution by Stefano Micossi exhorts the leaders of the eurozone to go back to the drawing board and overcome their political disagreements on how to proceed.

Transparency means proactive action: by adding a provision for a legislative footprint that identifies which interest-representatives key actors met, received, and heard from, Members of the European Parliament (MEPs) have a chance to turn the EP into a role model for parliamentary transparency in a pluralistic democracy.

Stabilising global greenhouse gas (GHG) concentrations at levels to avoid significant climate risks will require massive ‘decarbonisation’ over the next few decades. Achieving the necessary scale of emissions reductions will require well-thought out strategies and a multifaceted policy effort to support a broad array of technological and behavioural changes. This paper outlines some core principles for guiding the design of clean technology policies, with a focus on energy

‘Blue’ or Eurobonds guaranteed via joint and several liability by the eurozone member states have been proposed as an important tool to stabilise and structure the eurozone sovereign bond markets. But in this new Policy Brief, Hans-Joachim Dübel argues the case for a partial insurance of sovereign bonds by the European Stability Mechanism.
Hans-Joachim Dübel is an independent financial sector consultant based in Berlin and founder of Finpolconsult.
 

This paper asserts that the contagion currently afflicting sovereign bond markets in the eurozone can only be stopped if there is a central bank willing to be lender of last resort, i.e. willing to guarantee that the cash will always be available to pay out the bondholders. Until recently, the European Central Bank performed this role either directly by buying government bonds, or indirectly by accepting government bonds as collateral in its liquidity provision to the banking system, but it has made it clear that it is now unwilling to continue to do so.

This paper analyses the implications of a continued divergence of TARGET2 balances for monetary policy in the euro area. The accumulation of TARGET2 claims (liabilities) would make the ECB’s liquidity management asymmetric once the TARGET2 claims in core countries have crowded out central bank credit in those regions. Then while providing scarce liquidity to banks in countries with TARGET2 liabilities, the ECB will need to absorb excess liquidity in countries with TARGET2 claims.

This Policy Brief by Christian Kopf examines the merits of a new proposal from France aimed at resolving the Greek debt crisis in which French commercial banks would swap €85.5 billion in Greek government bonds maturing between 2011 and 2014 into a combination of new long-term Greek bonds with principal guarantee and cash payments.

This CEPS Policy Brief analyses the state of EU-Russian relations as seen from the vantage point of the summit held on June 9-10 in Nizhny Novgorod. The authors describe the political context in which the summit was embedded, the anticipations it evoked from the both sides, its outcomes and some perspectives for the near future.
Andrei Makarychev is professor at the Free University of Berlin and Alexander Sergunin is professor at St. Petersburg State University.
 

In this new policy brief, CEPS Senior Fellow Rym Ayadi and Antonio Fenelli, of the OECD, propose a blueprint for a new framework for micro and medium-sized enterprise development in the context of the ongoing Euro-Mediterranean cooperation with a new role for the Union for the Mediterranean secretariat to reinforce ongoing regional industrial cooperation.

After the Greek public debt crisis and the bilateral loans to Greece from the other members of the European Monetary Union (EMU), in May 2010 the Ecofin Council launched the European Financial Stabilization Mechanism (EFSM). In June of the same year the EMU countries instituted the European Financial Stability Facility (EFSF). These two mechanisms, which are charged with providing support to EMU countries in “exceptional difficulty”, received their baptism of fire with Ireland in January 2011 and successfully made their first bond issue on the market.

Regime changes through taking to the streets do not always progress peacefully and produce intended results. The recent successful revolutions that have brought down two North African dictators have also inspired reform advocates in the EU’s Eastern neighbourhood. The coming months are expected to see developments of major if not decisive importance especially for the future of Armenia. Given the uncertainty of the eventual outcome in Armenia, this Policy Brief contemplates four possible scenarios for the country’s future development and suggests possible responses from the EU.

With the Commission’s consultation period on the Single Market Act nearing its end, this CEPS Policy Brief urges the EU to get its act together and give immediate priority to deepening and widening the Single Market. The author argues, however, that it is essential that the legitimacy questions surrounding ‘more Single Market’ are taken seriously at both EU and at national level.

Jacques Pelkmans is CEPS Senior Research Fellow and Jan Tinbergen Chair and Director of the Department of European Economic Studies, College of Europe.
 

This paper proposes a two-step, market-based approach to debt reduction: