Banking Union: Ireland vs. Nevada, an illustration of the importance of an integrated banking system. CEPS Commentary, 18 October 2012

Despite their surprising similarities – in size and their housing booms – Ireland and the American state of Nevada sharply parted company when it came to who bore responsibility for bailing out their failed banks when the booms turned to bust. This latest Commentary by Daniel Gros vividly illustrates the importance of that difference and thus the shock-absorbing capacity of an integrated banking system and a banking union.

The UK-Canada Agreement on mutual support of missions abroad: loyalty compromised? CEPS Commentary, 18 October 2012

The UK and Canada recently signed a Memorandum of Understanding aimed at allowing the two countries to optimise their respective diplomatic resources by sharing embassy and consulate sites, the joint acquisition, supply and use of services, as well as collaboration on crisis response, consular services, security, diplomatic mail, information management and IT. This CEPS Commentary argues that the MoU on Mutual Support of Missions Abroad runs counter to the spirit of loyal cooperation, in particular in the realm of EU foreign policy. It also raises challenges to coherence, consistency and effectiveness of EU action in policy areas concerning visas, trade and consular protection. Moreover, the agreement may throw a spanner in the works of EU solidarity and the creation of a stronger EU identity, both internally and externally

EU global peace diplomacy. CEPS Commentary, 15 October 2012

Steven Blockmans characterises the award of the Nobel Peace Prize to the EU as “a marvellous honour and a much-needed boost" for an integration project that is suffering grave economic difficulties and considerable social unrest, but he regrets that the growing role of the EU to act as a peacemaker beyond its geographical borders was not acknowledged in the award announcement.

The policy mix and macroeconomic adjustment in the Euro area. CEPS Commentary, 15 October 2012

Against the background of the IMF’s latest global economic forecast, Jørgen Mortensen and Cinzia Alcidi raise questions in a new CEPS Commentary about the timing of the implementation and the effects of the three main categories of economic policy – fiscal, monetary and structural.

Should Europe be fracking? CEPS Commentary, 5 October 2012

Underlining the fact that shale gas, like all natural resources, can only be used once, Daniel Gros observes in this CEPS Commentary that the real issue is not whether this resource should be developed in Europe, but when it should be used: today or tomorrow? Europe is already a heavy user of gas, but its consumption is stagnating (along with its economy). Despite the hype about the shale gas revolution, the extraction cost of (onshore) conventional gas remains below that of fracking. And lots of pipelines have already been built so that the marginal cost of bringing this ‘conventional’ gas to Europe is thus rather low. Thus, from an economic and environmental point of view, Gros argues that fracking is unlikely to bring large benefits for Europe and that shale gas might just substitute for conventional gas, which is plentiful.

What distinguishes the euro crisis from a ‘normal’ financial crisis? CEPS Commentary, 6 November 2012

This Commentary attempts to discern the distinguishing features between the present euro crisis and the financial crisis brought on in the US by the subprime lending disaster and the ensuing collapse of banks and other financial institutions in 2007-08. It finds that whereas the US was able to bring its crisis to an end by socialising the dubious debt and stabilising its valuation so that it could migrate to other investors capable of bearing the risk, this pattern can be only partly repeated in the eurozone, where both debt socialisation and a return to normal risk assessment are more problematic.. It concludes, nevertheless, that the crisis should now abate somewhat given that most risk-averse institutions have by now sold their holdings of peripheral countries’ sovereign debt and especially in light of the ECB’s assurances that it will not allow the euro to disintegrate.