Under the veneer of decentralisation. Ukraine's modernisation efforts stall due to lack of local government reform. OSW Commentary No. 102, 2013-02-12

President Viktor Yanukovych and his Party of Regions have been repeating the pledge to decentralise power in Ukraine and to give local government a greater decision-making role ever since the party appeared on the Ukrainian political scene. The implementation of this reform is crucial both for the economic recovery of Ukraine’s regions and the overall modernisation efforts of the Ukrainian state. At present relations between central government and the regions are regulated by Soviet-era legislation that fails to address the modern-day challenges facing Ukraine. The political elite in the country, including the opposition, appear to have reached consensus on the importance of the decentralisation reform. The first attempts to implement changes in this area were made in the late 1990s, followed by a comprehensive reform programme developed between 2007 and 2009 by Yulia Tymoshenko’s government. In 2012, the Constitutional Assembly under the President of Ukraine appointed a team of experts who drafted a document detailing the reform of local government and the territorial organisation of power1. The document envisages the implementation of what effectively are two major reforms: (1) an administrative-territorial reform, which would help consolidate the fragmented administrative structure, creating larger and more economically self-sufficient administrative units, and (2) local government reform, focusing on creating clearly defined powers for local authorities with a view to securing government funding for specific tasks delegated from central government. Nonetheless, despite these measures, and in spite of the rhetoric coming from President Yanukovych and other members of the Party of Regions, it seems unlikely that the reform will be implemented in the foreseeable future. A series of concrete political decisions taken by the president over the past three years indicate that Yanukovych has not abandoned his plan to build a highly centralised political system. This in turn limits the capacity to govern of local authorities and further restricts the sources of funding for Ukraine’s regions. This apparent resistance to change stems from the fact that by implementing the proposed reforms, the president and his political allies would be forced to relinquish much of their control over the political processes taking place in the country and would have to free up the distribution of budgetary resources between Kyiv and the regions. The implementation of the reform within the specified timeframe (i.e. by 2015) is also unlikely due to the upcoming presidential election and the deteriorating economic situation in Ukraine. Without a comprehensive reform of local government, however, Ukraine will be unable to undertake effective modernisation measures, which are key for the socio-economic development of the country’s regions.

Law practice in a globalized world: the European experience. Jean Monnet/Robert Schuman Paper Series Vol. 13 No. 7, June 2013

From the Introduction. In this paper I plan to give a simple overview on how the legal profession is integrating in a globalized world within the European Union (“EU”).

Integrating Ukraine and Moldova in EU's energy security plans. EPC Commentary, 23 June 2014

Vulnerability in the EU’s internal energy market has been made starker since the Russia-Ukraine crisis, highlighting specifically the importance of upstream energy linkages. March this year saw the European Council calling for a comprehensive plan to reduce the EU’s energy dependence. The European Commission responded to this call with a communication on Energy Security published on 28 May, in time for another European Council at the end of June, at which a decision is anticipated.

Does Money Matter in the Euro area? Evidence from a new Divisia Index. Bruegel Working Paper 2014/12, 6 November 2014

The purpose of this paper is to examine the possible role of money shocks on output and prices in the euro area. Since no Divisia monetary aggregates are available for the euro area, we first create and make available a database on euro-area Divisia monetary aggregates. We plan to update the dataset in the future and keep it publicly available. Using different SVAR models, we find sensible and statistically significant responses to Divisia money shocks, while the responses to simple-sum measures of money and interest rates are not statistically significant, and sometimes even the point estimates are not sensible.

Factor Markets in Applied Equilibrium Models: The current state and planned extensions towards an improved presentation of factor markets in agriculture. Factor Markets Working Paper No. 23, February 2012

This paper describes how factor markets are presented in applied equilibrium models and how we plan to improve and to extend the presentation of factor markets in two specific models: MAGNET and ESIM. We do not argue that partial equilibrium models should become more ‘general’ in the sense of integrating all factor markets, but that the shift of agricultural income policies to decoupled payments linked to land in the EU necessitates the inclusion of land markets in policy-relevant modelling tools. To this end, this paper outlines options to integrate land markets in partial equilibrium models. A special feature of general equilibrium models is the inclusion of fully integrated factor markets in the system of equations to describe the functionality of a single country or a group of countries. Thus, this paper focuses on the implementation and improved representation of agricultural factor markets (land, labour and capital) in computable general equilibrium (CGE) models. This paper outlines the presentation of factor markets with an overview of currently applied CGE models and describes selected options to improve and extend the current factor market modelling in the MAGNET model, which also uses the results and empirical findings of our partners in this FP project.

Germany’s ‘refugee’ problem. The most important test for Chancellor Merkel and the grand coalition. OSW COMMENTARY NUMBER 182/11.09.2015 2015-09-11

The rapid increase in the number of immigrants from outside of the EU coming to Germany has become the paramount political issue. According to new estimates, the number of individuals expected arrive in Germany in 2015 and apply for asylum there is 800,000, which is nearly twice as many as estimated in earlier forecasts. Various administrative, financial and social problems related to the influx of migrants are becoming increasingly apparent. The problem of ‘refugees’ (in public debate, the terms ‘immigrants’, ‘refugees’, ‘illegal immigrants’, ‘economic immigrants’ have not been clearly defined and have often been used interchangeably) has been culminating for over a year. Despite this, it was being disregarded by Angela Merkel’s government which was preoccupied with debates on how to rescue Greece. It was only daily reports of cases of refugee centres being set on fire that convinced Chancellor Merkel to speak and to make immigration problem a priority issue (Chefsache). Neither the ruling coalition nor the opposition parties have a consistent idea of how Germany should react to the growing number of refugees. In this matter, divisions run across parties. Various solutions have been proposed, from liberalisation of laws on the right to stay in Germany to combating illegal immigration more effectively, which would be possible if asylum granting procedures were accelerated. The proposed solutions have not been properly thought through, instead they are reactive measures inspired by the results of opinion polls. This is why their assumptions are often contradictory. The situation is similar regarding the actions proposed by Chancellor Merkel which involve faster procedures to expel individuals with no right to stay in Germany and a plan to convince other EU states to accept ‘refugees’. None of these ideas is new – they were already present in the German internal debate.

The uncertain future of the coal energy industry in Germany. OSW COMMENTARY #188, 2015-10-20

Germany’s current energy strategy, known as the “energy transition”, or Energiewende, involves an accelerated withdrawal from the use of nuclear power plants and the development of renewable energy sources (RES). According to the government’s plans, the share of RES in electricity production will gradually increase from its present rate of 26% to 80% in 2050. Greenhouse gas emissions are expected to fall by 80–95% by 2050 when compared to 1990 levels. However, coal power plants still predominate in Germany’s energy mix – they produced 44% of electricity in 2014 (26% from lignite and 18% from hard coal). This makes it difficult to meet the emission reduction objectives, lignite combustion causes the highest levels of greenhouse gas emissions. In order to reach the emission reduction goals, the government launched the process of accelerating the reduction of coal consumption. On 2 July, the Federal Ministry for Economic Affairs and Energy published a plan to reform the German energy market which will be implemented during the present term of government. Emission reduction from coal power plants is the most important issue. This problem has been extensively discussed over the past year and has transformed into a conflict between the government and the coal lobby. The dispute reached its peak when lignite miners took to the streets in Berlin. As the government admits, in order to reach the long-term emission reduction objectives, it is necessary to completely liquidate the coal energy industry in Germany. This is expected to take place within 25 to 30 years. However, since the decision to decommission nuclear power plants was passed, the German ecological movement and the Green Party have shifted their attention to coal power plants, demanding that these be decommissioned by 2030 at the latest.

Europe’s Untapped Capital Market: Rethinking integration after the great financial crisis. Final report of the European Capital Markets Expert Group. Task Force Report, February 2016

In December 2014, ECMI and CEPS formed the European Capital Markets Expert Group (ECMEG) with the aim of providing a long-term contribution to the debate on the Capital Markets Union (CMU) project, proposed by the European Commission. After an intensive, year-long research effort and in-depth discussions with ECMEG members, this final report aims to rethink financial integration policies in the European Union and to devise an EU-wide plan to remove the barriers to greater capital markets integration. It offers a methodology to identify and prioritise cross-border barriers to capital markets integration and provides a set of policy recommendations to improve its key components: price discovery, execution and enforcement of capital markets transactions.

Europe's refugee/migrant crisis: can 'illiberal' Turkey save 'liberal Europe' while helping Syrian refugees? EPC Policy Brief, 19 February 2016

Turkish democracy today has lost much of its shine. As the Turkish government continues to backtrack on reforms and infringe on basic freedoms, the country is beginning to look more and more like an ‘illiberal democracy’ at best. Ironically, as one of the most important destination and transit countries for Syrian refugees, it is also still uniquely positioned to help the EU deal with the current refugee crisis. In November 2015, the EU and Turkey signed a Joint Action Plan to better manage the situation, but both parties have fallen short of their promises. German Chancellor Angela Merkel, one of the biggest supporters of closer EU-Turkey cooperation, had hoped that this would allow for the refugees to be admitted into Europe in a more controlled and orderly manner. But it seems she is standing alone in a Europe that is becoming increasingly more hostile towards newcomers, drifting further and further from the liberal values it stands for. In this Policy Brief, Kemal Kirişci discusses the ways in which Turkey, Germany and the EU in general could all benefit from closer cooperation on this issue: “With the right frame of mind and will, the current ‘illiberal Turkey’ could indeed help ‘liberal Europe’. In the long run this would be a ‘win-win’ for Germany, Turkey, and the EU – but most importantly, for the Syrian refugees.”