Croatia and the EU: the catch-up issue. CEPS Commentary, 28 June 2013

To become a prosperous country devoid of institutional preconditions for corruption, Croatia will have to define its own goals, persevere in reaching them and introduce some sort of internal monitoring. True political will, democratisation, government accountability and appropriate policies are crucial, particularly for the institutions and mechanisms that monitor government accountability and citizen participation. One can only reiterate the European Commission’s hope that membership will prove to be an additional incentive to Croatia’s politicians to change their behaviour and start addressing state capture in the country.

Is Independence Possible in an Interdependent World? Scotland vs. the UK's Participation in the European Economy. Bruges European Economic Policy (BEEP) Briefing 30/2013

Many commentators have criticised the strategy used to finance regional governments such as the Scottish Parliament – both the block grant system and the limited amount of fiscal autonomy devised in the Scotland Act of 2012. This lecture sets out to identify what level of autonomy or independence would best suit a regional economy in a currency union, and also the institutional changes needed to sustain those arrangements. Our argument is developed along three lines. First, we set out the advantages of a fiscal federalism framework and the institutions needed to support it, but which the Euro-zone currently lacks. The second is to elaborate a model of fiscal federalism where comprehensive powers of taxation and spending are devolved (an independent Scotland and the UK remain constituent members of the EU and European economy). Third, we evaluate the main arguments for the breakup of nations or economic unions with Scotland and the UK as leading examples. We note that greater autonomy may not result in increases in long run economic growth rate, but it does imply that enhancing the fiscal competence and responsibility of regional governments would result in productivity gains and hence higher levels of GDP per head. That means the population is permanently richer than before, even if ultimately their incomes continue to grow at the same rate. It turns out that these improvements can be achieved through devolved tax powers, but not through devolved spending powers or shared taxes.

Immigrant labour market participation in Belgium - high time to mainstream. IES Policy Brief Issue 2015/2 March 2015

The gap in labour market participation between natives and people with an immigrant background is significant in Belgium, one of the largest in the OECD. In this Policy Brief, we present research1 that investigated one of the possible causes of this poor performance, and we propose three main policy recommendations. The research project studied whether Belgium’s complex federal state structure, and the subsequent division of responsibilities and lack of intergovernmental cooperation helps to explain this poor performance. The study concluded that governance complexity does not appear to be a main cause for Belgium’s poor results. However, more policy coordination would improve policy efficiency.

Arbeidsmarktparticipatie van mensen met een migratie-achtergrond in België: hoog tijd om te mainstreamen Issue 2015/2 maart 2015 = Immigrant labour market participation in Belgium - high time to mainstream. IES Policy Brief Issue 2015/2 March 2015.

No Abstract.

Une meilleure insertion professionelle des personnes issues de l’immigration: allons au mainstreaming Issue 2015/2 mars 2015 = Immigrant labour market participation in Belgium - high time to mainstream. IES Policy Brief Issue 2015/2 March 2015

No Abstract.

What kind of European Banking Union? Bruegel Policy Contribution [2012/12?]June 25, 2012

This paper discusses the creation of a European Banking Union. First, we discuss questions of design. We highlight seven fundamental choices that decision makers will need to make: Which EU countries should participate in the banking union? To which categories of banks should it apply? Which institution should be tasked with supervision? Which one should deal with resolution? How centralised should the deposit insurance system be? What kind of fiscal backing would be required? What governance framework and political institutions would be needed? In terms of geographical scope, we see the coverage of the banking union of the euro area as necessary and of additional countries as desirable, even though this would entail important additional economic difficulties. The system should ideally cover all banks within the countries included, in order to prevent major competitive and distributional distortions. Supervisory authority should be granted either to both the ECB and a new agency, or to a new agency alone. National supervisors, acting under the authority of the European supervisor, would be tasked with the supervision of smaller banks in accordance with the subsidiarity principle. A European resolution authority should be established, with the possibility of drawing on ESM resources. A fully centralized deposit insurance system would eventually be desirable, but a system of partial reinsurance may also be envisaged at least in a first phase. A banking union would require at least implicit European fiscal backing, with significant political authority and legitimacy. Thus, banking union cannot be considered entirely separately from fiscal union and political union. The most difficult challenge of creating a European banking union lies with the short-term steps towards its eventual implementation. Many banks in the euro area, and especially in the crisis countries, are currently under stress and the move towards banking union almost certainly has significant distributional implications. Yet it is precisely because banks are under such stress that early and concrete action is needed. An overarching principle for such action is to minimize the cost to the tax payers. The first step should be to create a European supervisor that will anchor the development of the future banking union. In parallel, a capability to quickly assess the true capital position of the system’s most important banks should be created, for which we suggest establishing a temporary European Banking Sector Task Force working together with the European supervisor and other authorities. Ideally, problems identified by this process should be resolved by national authorities; in case fiscal capacities would prove insufficient, the European level would take over in the country concerned with some national financial participation, or in an even less likely adverse scenario, in all participating countries at once. This approach would require the passing of emergency legislation in the concerned countries that would give the Task Force the required access to information and, if necessary, further intervention rights. Thus, the principle of fiscal responsibility of respective member states for legacy costs would be preserved to the maximum extent possible, and at the same time, market participants and the public would be reassured that adequate tools are in place to address any eventuality.

Participatory approaches in the management of Natura 2000: when EU biodiversity policy gets closer to its citizens. Bruges Political Research Paper No. 26/May 2012

The Habitats Directive has created a European network of protected areas combining environmental protection with social and economic activities. Although not clearly advocated in the Directive, participatory approaches have incrementally emerged in order to ensure an adequate management of the Natura 2000 network. This paper looks at the reasons why the European Commission on one side and the national/local authorities on the other side chose to engage in participatory approaches and assesses the structure, degree and scope of these approaches in the light of input and output legitimacy. Main findings are that participation was mostly implemented as a reaction to conflicts and out of a concern over policy implementation, two elements that continue to drive the philosophy of the Natura 2000 network‘s management. The limits of participation in Brussels are contrasted with the potential for more genuine and effective participation mechanisms on the field.

From supervision to resolution: next steps on the road to European Banking Union. Bruegel Policy Contribution 2013/04, February 2012

The European Council has outlined the creation of a Single Resolution Mechanism (SRM), complementing the Single Supervisory Mechanism. The thinking on the SRM’s legal basis, design and mission is still preliminary and depends on other major initiatives, including the European Stability Mechanism’s involvement in bank recapitalisations and the Bank Recovery and Resolution (BRR) Directive. The SRM should also not be seen as the final step creating Europe’s future banking union. Both the BRR Directive and the SRM should be designed to enable the substantial financial participation of existing creditors in future bank restructurings. To be effective, the SRM should empower a central body. However, in the absence of Treaty change and of further fiscal integration, SRM decisions will need to be implemented through national resolution regimes. The central body of the SRM should be either the European Commission, or a new authority. This legislative effort should not be taken as an excuse to delay decisive action on the management and resolution of the current European banking fragility, which imposes a major drag on Europe’s growth and employment.

Europe's growth problem (and what to do about it). Bruegel Policy Brief 2013/03, April 2013

The issue: The European Union's pre-crisis growth performance was disappointing enough, but the performance has been even more dismal since the onset of the crisis. Weak growth is undermining private and public deleveraging,and is fuelling continued banking fragility. Persistently high unemployment is eroding skills, discouraging labour market participation and undermining the EU’s long-term growth potential. Low overall growth is making it much tougher for the hard-hit economies in southern Europe to recover competitiveness and regain control of their public finances. Stagnation would reduce the attractiveness of Europe for investment. Under these conditions, Europe's social models are bound to prove unsustainable. Policy Challenge: The European Union's weak long-term growth potential and unsatisfactory recovery from the crisis represent a major policy challenge. Over and above the structural reform agenda, which vitally important, bold policy action is needed. The priority is to get bank credit going. Banking problems need to be assessed properly and bank resolution and recapitalisation should be pursued. Second, fostering the reallocation of factors to the most productive firms and the sectors that contribute to aggregate rebalancing is vital. Addressing intra-euro area competitiveness divergence is essential to support growth in southern Europe. Third, the speed of fiscal adjustment needs to be appropriate and EU funds should be front loaded to countries in deep recession, while the European Investment Bank should increase investment.