A Greek tragedy in the making. EPC Commentary, 6 July 2015

One thing is clear: the Greek people have emphatically voted ‘No’, providing a boost to Prime Minister Alexis Tsipras and plunging Greece and the Eurozone even more into uncertainty. But it might, at the end of the day, prove to be a hollow victory for the Greek Prime Minister: the vote cannot compel the rest of the Eurozone to open their coffers and provide the funds Greece so desperately needs. It is certainly not a victory for democracy: it is highly questionable whether the Greek people could form an informed opinion, given the short time frame, the unclear question relying on a proposal no longer on the table, and the high level of misinformation on the potential consequences of the vote. This is no victory, neither for Greece nor the EU and its members: in the end, it increases the danger of Greece leaving the Eurozone – and potentially even an eventual exit from the EU –, which the people of Greece clearly do not want, as 75-80 per cent of citizens firmly want the country to stay in the euro.

Central Banks in Times of Crisis: The FED vs. the ECB. CEPS Policy Brief No. 276, 11 July 2012,

Different economic and financial structures require different crisis responses. Different crises also require different tools and resources. The first ‘stage’ of the financial crisis (2007-09) was similar on both sides of the Atlantic, and the response was also quite similar. The second stage of the crisis is unique to the euro area. Increasing financial disintegration within the region has forced the ECB to become the central counterparty for the entire cross-border banking market and to intervene in the sovereign bond market of some stressed countries. The actions undertaken by the European Central Bank (ECB), however, have not always represented the best response, in terms of effectiveness, consistency and transparency. This is especially true for the Securities Markets Programme (SMP): by de facto imposing its absolute seniority during the Greek PSI (private sector involvement), the ECB has probably killed its future effectiveness.

CSDP and NATO Post-Libya: Towards the Rubicon? Egmont Security Policy Brief No. 35, July 2012

In the wake of Libya and the American pivot to Asia, CSDP-NATO relations must be recalibrated. The buzz word for CSDP should be: integrated through the EU and empowered through NATO.

Geopolitical shifts in the Eastern Mediterranean. Security Policy Brief No. 43, February 2013

Three major geopolitical events are putting the stability of the Eastern Mediterranean at risk. Most of the region is in a deep monetary and economic crisis. The Arab Spring is causing turmoil in the Levant and the Maghreb. Gas and oil discoveries, if not well managed, could further destabilise the region. At the same time, Russia and Turkey are staging a comeback. In the face of these challenges, the EU approaches the Greek sovereign debt crisis nearly exclusively from a financial and economic viewpoint. This brief argues that the EU has to develop a comprehensive strategy for the region, complementing its existing multilateral regional framework with bilateral agreements in order to secure its interests in the Eastern Mediterranean.

Pool it, share it, use it: the European Council on defence. Security Policy Brief No. 44, March 2013

Three major geopolitical events are putting the stability of the Eastern Mediterranean at risk. Most of the region is in a deep monetary and economic crisis. The Arab Spring is causing turmoil in the Levant and the Maghreb. Gas and oil discoveries, if not well managed, could further destabilise the region. At the same time, Russia and Turkey are staging a comeback. In the face of these challenges, the EU approaches the Greek sovereign debt crisis nearly exclusively from a financial and economic viewpoint. This brief argues that the EU has to develop a comprehensive strategy for the region, complementing its existing multilateral regional framework with bilateral agreements in order to secure its interests in the Eastern Mediterranean.

The Case Law of the ECJ concerning the Free Provision of Services : 2000 - 2005. Research Papers in Law, 2/2006

Introduction. The present overview covers the period starting from 2000 until the end of 2005.1 This is the follow-up to our overview covering the 1995-1999 period.2 The first striking feature of the present contribution is that it has to deal with almost 3,5 times as many cases as the previous one. Hence, the ECJ has gone from deciding 40 cases in the five year period between 1995- 1999 to deciding over 140 cases based on Art 49 between 2000-2005. This confirms, beyond any doubt, the tendency already observed in our previous overview, that a “third generation” case law on services is being developed at a very rapid pace by the ECJ. This third generation case law is based on the idea that Article 49 EC is not limited to striking down discriminatory measures but extends to the elimination of all hindrances to the free provision of services. This idea was first expressed in the Tourist Guide cases, the Greek and Dutch TV cases and most importantly in the Säger case.3 It has been confirmed ever since. As was to be expected, this broad brush approach of the Court’s has led to an ever-increasing amount of litigation reaching Luxemburg. It is clear that, if indicators were used to weight the importance of the Court’s case law during the relevant period, services would score much higher than goods, both from a quantitative and from a qualitative perspective.4 Hence, contrary to the previous overview, this one cannot deal in detail with any of the judgments delivered during the reference period. The aim of the present contribution is restricted to presenting the basic trends of the Court’s case law in the field of services Therefore, the analysis follows a fundamentally horizontal approach, fleetingly considering the facts of individual cases, with a view to identifying the conceptual premises of the Court’s approach to the free movement of services. Nonetheless, the substantial solutions adopted by the Court in some key topics, such as concession contracts, healthcare services, posted workers and gambling, are also presented as case studies. In this regard, the analysis is organized in four sections. First we explore the (ever expanding) scope of the freedom to provide services (Section 2), then we go on to identify the nature of the violations and of justifications thereto (Section 3), before carrying out some case studies to concretely illustrate the above (Section 4). Then, for the sake of completeness, we try to deduce the general principles running through the totality of the relevant case law (Section 5). Inevitably, some concluding remarks follow (Section 6).5

Rounding out a satisfactory Trio Presidency: Greece sets the stage for its Italian successor. CEPS Commentary, 3 July 2014

Expectations of the Greek presidency were not high: the budget was limited, the legislative term was drawing to a close and the European Parliament dissolved in mid-April for the elections. However, Greece made the most of its resources to progress on some very important dossiers and brought about a satisfactory close to the Trio presidency previously held by Ireland and Lithuania. The Greek presidency managed to finalise work on the Trio priorities, mainly in relation to banking union, the Digital Agenda, the competitiveness of EU enterprises and the Compact for Growth and Jobs. It also advanced legislation to tackle tax evasion as a necessary complement to spending cuts, and set the agenda for migration and maritime affairs, in close cooperation with Italy.

Reshaping politics of the left and centre in Greece after the 2014 EP election. EPIN Commentary No. 21/10 September 2014

The political landscape in Greece is confused and volatile at the moment; the right and extreme- right-wing parties are accorded a disproportionately large place in political debate, while the radical left-wing SYRIZA party is attempting to maintain a ‘leftist’ profile and demonstrate its capacity to govern through a strategy of image normalisation. These tensions make it very difficult for the Greek government to stick to the EU’s tough reform agenda. The governing coalition is trying to conceal the social effects of implementing structural policy reforms, even postponing some measures to avoid bearing their political cost. At the same time, it is adopting a very rushed, and thus quite worrying, attitude towards a fast-track growth agenda, without taking into consideration the conditions for sustainable economic development.

The role of politicians in inciting financial markets to attack the eurozone. EuropEos Commentary No. 4, 21 June 2010

While acknowledging that the sustainability of sovereign debt is a serious issue that must be confronted, this EuropEos Commentary finds that financial markets have blown the problem completely out of proportion, leading to a full-scale confidence crisis. The authors present evidence suggesting that politicians’ public disagreements and careless statements at critical junctures may have added oil to incipient fire. By creating the impression that domestic political interests would take precedence over orderly management of the Greek debt crisis, they raised broader doubts about their ability to address fundamental economic divergences within the area, which are the real source of debt sustainability problems in the medium term.

Why Is Sovereign Debt Restructuring a Challenge? The Case of Greece. Bruges European Economic Policy (BEEP) Briefing 24/2012

The reduction of Greek sovereign debt by €106 billion, agreed in the second bailout package of February 2012, is the largest in history. Nevertheless, immediately after publishing the key terms of the package, doubts arose whether it would achieve its goals: to reduce the debt-to-GDP ratio to 120.5% in 2020 and to ensure the return of Greece to market financing by 2015. This Briefing gives a timely input to the debate as it develops an analytical framework through which the expected failure of the Greek debt reduction can be assessed. It surveys the economic literature to identify three groups of factors reducing the effectiveness of sovereign debt restructuring: (1) sovereign’s fundamentals, (2) inefficiencies inherent in the restructuring process and (3) costs of restructuring; and applies them to the case of Greece. Based on this analysis, three policy implications are formulated, with relevance to Greece and the wider eurozone. Firstly, the importance of increased policy effort by Greece to enact current structural and growth-enhancing reforms is underlined. Secondly, the introduction of uniform CACs is proposed that will reduce the market participants’ uncertainty, discipline the runs on government debt and address the holdout inefficiency. Finally, sovereign debt restructuring is not recommended as a universal solution for over- indebtedness in the EU, given the direct and reputation costs of sovereign debt restructuring and the self-fulfilling nature of sovereign debt crises.

The Cost of Servicing Greece’s Debt: A Sisyphean task? CEPS Commentary, 4 February 2015

Following the victory of Syriza in the Greek elections on January 25th, policy-makers, economists and concerned EU citizens are scrambling to understand the causes, modalities and consequences of a possible Greek default in order to anticipate and prepare for what is likely to unfold in the coming weeks and months. The debate on the sustainability of Greek public finances has often been characterised by a lack of clarity and even a certain degree of confusion. This brief note focuses first on the cost that Greece faces in servicing its debt and then asks whether this is a manageable or a Sisyphean task. It concludes by reflecting on the political implications of the new government’s announced intentions and whether these are being taken into account in the current debate over debt restructuring.

An election too far ? Four scenarios for Greece after the elections. European Policy Brief No. 9, June 2012

The results of the Greek elections on 17 June are of crucial importance for both the country itself and the eurozone. This Policy Brief outlines the possible post-election scenarios. It argues that an intelligent modification of the current adjustment programme is the best course of action. Other policy choices would likely have a worse outcome, as they would either underestimate the resentment of the current programme among Greeks or risk leading to the

The Fate of Greece in a ‘Genuine Economic and Monetary Union’: Lessons from a small island state. CEPS Hi-Level Brief, 19 June 2015 Friday, 19 June 2015

As the Greek debt drama reaches another supposedly decision point, Daniel Gros urges creditors (and indeed all policy-makers) to think about the long term and poses one key question in this CEPS High-Level Brief: What can be gained by keeping Greece inside the euro area at “whatever it takes”? As he points out, the US, with its unified politics and its federal fiscal transfer system, is often taken as a model for the Eurozone, and it is thus instructive to consider the longer-term performance of an area of the US which has for years been kept afloat by massive transfers, and which is now experiencing a public debt crisis. The entity in question is Puerto Rico, which is an integral part of the US in all relevant economic dimensions (currency, economic policy, etc.). The dismal fiscal and economic performance of Puerto Rico carries two lessons: 1) Keeping Greece in the eurozone by increasing implicit subsidies in the form of debt forgiveness might create a low-growth equilibrium with increasing aid dependency. 2) It is wrong to assume that, further integration, including a fiscal and political union, would be sufficient to foster convergence, and prevent further problems of the type the EU is experiencing with Greece.

The Euro as a Foreign Currency for Greece Friday, 19 June 2015

In contrast to his contribution just a month ago, which examined how a Greek parallel currency to the euro could allow the Greek government to gain some room for manoeuver in fiscal policy while at the same time continuing the adjustment programme demanded by the country’s creditors, Thomas Mayer explores in the present note the question of how the Greek population could still keep the euro after a default of its government. Contrary to general belief, he finds that Grexit and the reintroduction of the euro as a foreign currency would probably be positive for the Greek economy, although its creditors would be hard hit. It is therefore primarily in their interest that default and Grexit are avoided.

Flashlight Europe N°7–09 July 2015. Greece After the Referendum: Three Possible Scenarios for the Euro Area

About ten days ago Alexis Tsipras, the Greek prime minister, announced that there was going to be a referendum, and thus terminated the negotiations on a new rescue package unilaterally. Since then the euro area has been plunged into a wholly unprecedented political crisis. Whether or not Greece can re-main in the monetary union is more uncertain than ever, and decisions that can give a new twist to the political and financial situation are being made almost every day. The Greek banks have been closed for over a week. The economic data are deteriorating rapidly. And yet a solution is nowhere to be seen. The No vote in the Greek referendum has not exactly improved the chances of reaching an agree-ment. For the time being the positions seem to have become uncompromising. At the summit of the heads of state and government on 7 July the Greek government was given five days and a “final deadline” in order to come up with viable proposals for reform. Thus the next few days are of crucial im-portance. At the weekend the heads of state and government of all 28 EU member states are going to meet in order to decide the future of Greece. This flashlight europe provides an overview of the events of the last few days, outlines possible scenarios for what may happen in the near future, and identifies factors which may exert an influence in the short term. We are not trying to give an exact forecast or to formulate action recommendations. But we are trying to shed some light on a confusing situation by identifying important patterns and some of the salient factors.