Germany’s engagement in the resolution of the Syrian conflict. OSW COMMENTARY NUMBER 194/25.01.2016

German Tornado Recce aircraft have been engaged in reconnaissance operations over Syria since January 2016. In December 2015 the German government and parliament decided that up to 1,200 Bundeswehr soldiers would take part in the international coalition fighting Islamic State in Syria. This decision marks a new chapter in Germany’s activity in the Middle East. The increasing destabilisation of the southern neighbourhood and the consequences this has for the EU and Germany have forced the German government to increase its level of engagement in the region. Even though Germany is a third-rate player in the Middle Eastern game, it is nonetheless ever more engaged politically and wants to be viewed as a neutral mediator between the competing actors in the region. It has also allocated more funds on regional development co-operation and humanitarian aid. Germany, whose attention has been directed towards Europe’s eastern neighbourhood, is currently turning its attention to the South. The Middle East (and Africa) is taking on increasing significance in German foreign and security policy. This may affect NATO’s eastern flank and the EU’s eastern neighbourhood since part of Germany’s instruments and funds may be redirected to the South.

Estimating the Bridge Financing Needs of the Single Resolution Fund: How expensive is it to resolve a bank? CEPS Special Report No. 122, 25 November 2015

The Single Resolution Board (SRB) will be responsible for the resolution of banks in the euro area from 1 January 2016. However, the resources of the Single Resolution Fund (SRF) at the disposal of the SRB will only gradually be built up until 2023. This paper provides estimates of the potential financing needs of the SRF, based on the euro area bank resolutions that actually occurred between 2007 and 2014. We find that the SRF would have been asked to put a total amount of about €72 billion into these failing banks, which is more than the target for the SRF (€55 billion) but less than the amount the SRF could draw on, if the ex-post levies are also taken into account. As this sum would have been required over eight years, the broad conclusion is that bridge financing, in addition to the existing alternative funding, would only have been needed in the early years of the transition.

A European Deposit Insurance and Resolution Fund - An Update. CEPS Policy Brief No. 283, 11 September 2012

Cross-border banking is currently not stable in Europe. Cross-border banks need a European safety net. Moreover, a truly integrated European level banking system may help to break the diabolical loop between the solvency of the domestic banking system and the fiscal standing of the national sovereign. This policy paper first sketches the building blocks of a banking union. Importantly, a new European Deposit Insurance and Resolution Authority (EDIRA) should start simultaneously with the ECB assuming supervisory powers. A combination of European supervision and local resolution cannot work because it is not ‘incentive compatible’. Next, this paper proposes a transition period to gradually phase in the European deposit insurance coverage. Finally, we calculate that a European Deposit Insurance Fund would amount to about €30-50 billion for the 75 euro area banks that were subject to the EBA stress tests. This Fund could be created over a period of time through risk-based deposit insurance premiums levied on these banks. Once up and running, the Fund would then turn into a European Deposit Insurance and Resolution Fund to also deal with the resolution of one or more of these European banks.