Large-scale systemic state capture, which is the root of widespread corruption, is acquiring such proportions in Serbia that it may undermine the success of its transition. ‘State capture’ is defined as any group or social strata, external to the state, that seizes decisive influence over state institutions and policies for its own interests and against the public good.

The states of the Western Balkans constitute a major source of ‘soft security’ threats to the EU. The EU attaches a great deal of importance to this subject, as reflected by the fact that justice and home affairs is officially one of the most prominent areas of cooperation in the region. This paper aims at elaborating on this process and poses as its key analytical question: What are the actual routes of influence through which the EU can bring these states closer to EU standards in justice and home affairs?

The European Commission has recently rekindled the debate about a possible future ruling on economic immigration, including the conditions and procedures for entry and residence, the principle of Community preference and the rights of third-country workers.

Close foreign policy cooperation among a limited number of EU member states is generally looked upon with suspicion as it is associated with ‘directoires’ of large member states. The central argument of this paper is that, under certain conditions, the specialisation and division of labour among the member states can strengthen both the effectiveness and legitimacy of the foreign policy of the EU. This paper proposes the establishment of a system of small, specialised EU core groups that focus on particular foreign policy issues.

Foreign direct investment (FDI) is an instrument of international capital flow and it also shares some features of international trade flows as it is often associated with intra-firm trade by multinational corporations. Combining features from both ‘growth-type’ and ‘gravity-type’ models, the authors of this paper argue that democracy and economic reform in emerging economies have a joint positive impact on FDI inflows from advanced countries. They conclude that the role of democracy and market-oriented reform is robust and widespread beyond European borders.

Responsibility for the implementation of the Community budget is entrusted by the EC Treaty to the European Commission exclusively. However, by virtue of the principles of subsidiarity and proportionality, approximately 80% of the total expenditure (agricultural spending and spending on structural aid) is managed, in various guises, by member state administrations. The application of the above-mentioned principles to the Community budget has given rise to a complicated panoply of levels of decision-making, which has not resulted in a clear indication of who is responsible for what.

Since the Kyoto Protocol entered into force in February 2005, many Parties to the Protocol have shifted their domestic policies into high gear to achieve the quantitative reductions in greenhouse gas emissions undertaken for the period from 2008 to 2012. While the basic design of environmental taxation in European countries has received widespread attention, its actual performance has not been systematically assessed. This report aims at examining, against pre-determined criteria (e.g.

The US international investment position today should in principle be equal to the sum of past current account balances (mostly deficits). However, this is by far not the case even taking into account the balancing item ‘errors and omissions’. Between 1982 and 2004, the US has accumulated a grand total of around $4.5 trillion (thousand billion).

Over the last five years, the EU has sent more than 35 Election Observation Missions (EOMs) around the world. EOMs are often the most visible part of the EU’s efforts to promote democracy abroad and carry consequences for the EU’s overall policy towards a given country. While the methods and techniques of observing elections are well established, the linkage between the findings of observers and general political follow-up by the EU can be weak, in particular in cases where observers report significant flaws. The EU should be more coherent in these cases.

The enlargement of the EU and the European Neighbourhood Policy (ENP) have revived the debate in the ‘neighbourhood countries’ around the need to converge legislation with EU internal rules and regulations, known as the acquis communautaire. The political incentive of accession to the EU, which has driven legal approximation in new EU member states, is missing for ENP countries. Yet, in the case of countries like Moldova, the cost of non-compliance is significant and translates into loss of existing export markets (e.g.

The spectacular growth of the US housing market as a driver of domestic demand has attracted a lot of attention over the last year. Policy-makers and market participants routinely add a health warning to their outlooks for the US economy related to the US housing market, based on the assumption that growth in US domestic demand will slow down dramatically once housing prices start to decelerate. It is generally assumed that the eurozone does not face a similar prospect, because areas of ‘froth’ (Spain, for example) co-exist alongside areas of declining prices (Germany).

This paper draws policy conclusions for the EU based on the studies performed for the Fifth Framework Programme on industrial competitiveness and other relevant literature. The issue of competitiveness of the new member states and the implications of enlargement for the EU as a whole and for individual member states is complex. This paper discusses the policy implications that result from the research undertaken in the context of this project and presents some additional considerations. Policy actions on industrial competitiveness may be taken at national or EU level.