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.

The European Court of Justice and process-oriented review. Research Paper in Law, 01/2012

Structuralism is a theory of U.S. constitutional adjudication according to which courts should seek to improve the decision-making process of the political branches of government so as to render it more democratic.1 In words of John Hart Ely, courts should exercise their judicial-review powers as a ‘representation-reinforcing’ mechanism.2 Structuralism advocates that courts must eliminate the elements of the political decision-making process that are at odds with the structure set out by the authors of the U.S. Constitution. The advantage of this approach, U.S. scholars posit, lies in the fact that it does not require courts to second-guess the policy decisions adopted by the political branches of government. Instead, they limit themselves to enforcing the constitutional structure within which those decisions must be adopted. Of course, this theory of constitutional adjudication, like all theories, has its shortcomings. For example, detractors of structuralism argue that it is difficult, if not impossible, to draw the dividing line between ‘substantive’ and ‘structural’ matters.3 In particular, they claim that, when identifying the ‘structure’ set out by the authors of the U.S. Constitution, courts necessarily base their determinations not on purely structural principles, but on a set of substantive values, evaluating concepts such as democracy, liberty and equality. 4 Without claiming that structuralism should be embraced by the ECJ as the leading theory of judicial review, the purpose of my contribution is to explore how recent case-law reveals that the ECJ has also striven to develop guiding principles which aim to improve the way in which the political institutions of the EU adopt their decisions. In those cases, the ECJ decided not to second-guess the appropriateness of the policy choices made by the EU legislator. Instead, it preferred to examine whether, in reaching an outcome, the EU political institutions had followed the procedural steps mandated by the authors of the Treaties. Stated simply, I argue that judicial deference in relation to ‘substantive outcomes’ has been counterbalanced by a strict ‘process review’. To that effect, I would like to discuss three recent rulings of the ECJ, delivered after the entry into force of the Treaty of Lisbon, where an EU policy measure was challenged indirectly, i.e. via the preliminary reference procedure, namely Vodafone, Volker und Markus Schecke and Test-Achats.5 Whilst in the former case the ECJ ruled that the questions raised by the referring court disclosed no factor of such a kind as to affect the validity of the challenged act, in the latter cases the challenged provisions of an EU act were declared invalid.

Brazilian climate policy since 2005: continuity, change and prospective. CEPS Working Document No. 373, February 2013

In the five-year period 2005-09, Brazil has dramatically reduced carbon emissions by around 25% and at the same time has kept a stable economic growth rate of 3.5% annually. This combination of economic growth and emissions reduction is unique in the world. The driver was a dramatic reduction in deforestation in the Amazonian forest and the Cerrado Savannah. This shift empowered the sustainability social forces in Brazil to the point that the national Congress passed (December 2009) a very progressive law internalising carbon constraints and promoting the transition to a low-carbon economy. The transformation in Brazil’s carbon emissions profile and climate policy has increased the potentialities of convergence between the European Union and Brazil. The first part of this paper examines the assumption on which this paper is based, mainly that the trajectory of carbon emissions and climate/energy policies of the G20 powers is much more important than the United Nations multilateral negotiations for assessing the possibility of global transition to a low-carbon economy. The second part analyses Brazil’s position in the global carbon cycle and public policies since 2005, including the progressive shift in 2009 and the contradictory dynamic in 2010-12. The final part analyses the potential for a transition to a low-carbon economy in Brazil and the impact in global climate governance.

Europe’s most wanted? Recalibrating Trust in the European Arrest Warrant System. CEPS Paper Liberty and Security in Europe 55/21 March 2013

This paper assesses the uses and misuses in the application of the European Arrest Warrant (EAW) system in the European Union. It examines the main quantitative results of this extradition system achieved between 2005 and 2011 on the basis of the existing statistical knowledge on its implementation at EU official levels. The EAW has been anchored in a high level of ‘mutual trust’ between the participating states’ criminal justice regimes and authorities. This reciprocal confidence, however, has been subject to an increasing number of challenges resulting from its practical application, presenting a dual conundrum: 1. Principle of proportionality: Who are the competent judicial authorities cooperating with each other and ensuring that there are sufficient impartial controls over the necessity and proportionality of the decisions on the issuing and execution of EAWs? 2. Principle of division of powers: How can criminal justice authorities be expected to handle different criminal judicial traditions in what is supposed to constitute a ‘serious’ or ‘minor’ crime in their respective legal settings and ‘who’ is ultimately to determine (divorced from political considerations) when is it duly justified to make the EAW system operational? It is argued that the next generation of the EU’s criminal justice cooperation and the EAW need to recognise and acknowledge that the mutual trust premise upon which the European system has been built so far is no longer viable without devising new EU policy stakeholders’ structures and evaluation mechanisms. These should allow for the recalibration of mutual trust and mistrust in EU justice systems in light of the experiences of the criminal justice actors and practitioners having a stake in putting the EAW into daily effect. Such a ‘bottom-up approach’ should be backed up with the best impartial and objective evaluation, an improved system of statistical collection and an independent qualitative assessment of its implementation. This should be placed as the central axis of a renewed EAW framework which should seek to better ensure the accountability, impartial (EU-led) scrutiny and transparency of member states’ application of the EAW in light of the general principles and fundamental rights constituting the foundations of the European system of criminal justice cooperation.

Transforming Power Relationships: Leadership, Risk, and Hope. IHS Political Science Series No. 135, May 2013

Chronic communal conflicts resemble the prisoner’s dilemma. Both communities prefer peace to war. But neither trusts the other, viewing the other’s gain as its own loss, so potentially shared interests often go unrealized. Achieving positive-sum outcomes from apparently zero-sum struggles requires a kind of riskembracing leadership. To succeed leaders must: a) see power relations as potentially positive-sum; b) strengthen negotiating adversaries instead of weakening them; and c) demonstrate hope for a positive future and take great personal risks to achieve it. Such leadership is exemplified by Nelson Mandela and F.W. de Klerk in the South African democratic transition. To illuminate the strategic dilemmas Mandela and de Klerk faced, we examine the work of Robert Axelrod, Thomas Schelling, and Josep Colomer, who highlight important dimensions of the problem but underplay the role of risk-embracing leadership. Finally we discuss leadership successes and failures in the Northern Ireland settlement and the Israeli-Palestinian conflict.

With or without you...judging politically in the field of Area of Freedom, Security and Justice? Research Papers in Law, 3/2007

From the Introduction. The study of the European Court of Justice’s (ECJ) case law of the regarding the Area of Freedom Security and Justice (AFSJ) is fascinating in many ways.1 First, almost the totality of the relevant case law is extremely recent, thereby marking the first ‘foundational’ steps in this field of law. This is the result of the fact that the AFSJ was set up by the Treaty of Amsterdam in 1997 and only entered into force in May 1999.2 Second, as the AFSJ is a new field of EU competence, it sets afresh all the fundamental questions – both political and legal – triggered by European integration, namely in terms of: a) distribution of powers between the Union and its member states, b) attribution of competences between the various EU Institutions, c) direct effect and supremacy of EU rules, d) scope of competence of the ECJ, and e) measure of the protection given to fundamental rights. The above questions beg for answers which should take into account both the extremely sensible fields of law upon which the AFSJ is anchored, and the EU’s highly inconvenient three-pillar institutional framework.3 Third, and as a consequence of the above, the vast majority of the ECJ’s judgments relating to the AFSJ are a) delivered by the Full Court or, at least, the Grand Chamber, b) with the intervention of great many member states and c) often obscure in content. This is due to the fact that the Court is called upon to set the foundational rules in a new field of EU law, often trying to accommodate divergent considerations, not all of which are strictly legal.4 Fourth, the case law of the Court relating to the AFSJ, touches upon a vast variety of topics which are not necessarily related to one another. This is why it is essential to limit the scope of this study. The content of, and steering for, the AFSJ were given by the Tampere European Council, in October 1999. According to the Tampere Conclusions, the AFSJ should consist of four key elements: a) a common immigration and asylum policy, b) judicial cooperation in both civil and penal matters, c) action against criminality and d) external action of the EU in all the above fields. Moreover, the AFSJ is to a large extent based on the Schengen acquis. The latter has been ‘communautarised’5 by the Treaty of Amsterdam and further ‘ventilated’ between the first and third pillars by decisions 1999/435 and 1999/436.6 Judicial cooperation in civil matters, mainly by means of international conventions (such as the Rome Convention of 1981 on the law applicable to contractual obligations) and regulations (such as (EC) 44/20017 and (EC) 1348/20008) also form part of the AFSJ. However, the relevant case law of the ECJ will not be examined in the present contribution.9 Similarly, the judgments of the Court delivered in the course of Article 226 EC proceedings against member states, will be omitted.10 Even after setting aside the above case law and notwithstanding the fact that the AFSJ only dates as far back as May 1999, the judgments of the ECJ are numerous. A simple (if not simplistic) categorisation may be between, on the one hand, judgments which concern the institutional setting of the AFSJ (para. 2) and, on the other, judgments which are related to some substantive AFSJ policy (para. 3).

Casual but Smart: The Court’s new clothes in the Area of Freedom Security and Justice (AFSJ) after the Lisbon Treaty. Research Papers in Law, 2/2008

Introduction. Unintended as it was, the European Court of Justice (ECJ, the Court, the Court of the EU) has played an extremely important role in the construction of the Area of Freedom Security and Justice (AFSJ). The AFSJ was set up by the Treaty of Amsterdam in 1997 and only entered into force in May 1999. The fact that this is a new field of EU competence, poses afresh all the fundamental questions – both political and legal – triggered by European integration, namely in terms of: a) distribution of powers between the Union and its Member States, b) attribution of competences between the various EU Institutions, c) direct effect and supremacy of EU rules, d) scope of competence of the ECJ, and e) extent of the protection given to fundamental rights. The above questions have prompted judicial solutions which take into account both the extremely sensible fields of law upon which the AFSJ is anchored, and the EU’s highly inconvenient three-pillar institutional framework.1 The ECJ is the body whose institutional role is to benefit most from this upcoming ‘depilarisation’, possibly more than that of the European Parliament. This structure is on the verge of being abandoned, provided the Treaty of Lisbon enters into force.2 However spectacular this formal boost of the Court’s competence, the changes in real terms are not going to be that dramatic. This apparent contradiction is explained, to a large extent, by the fact that the Court has in many ways ‘provoked’, or even ‘anticipated’, the depilarisation of its own jurisdictional role, already under the existing three-pillar structure. Simply put, under the new – post Treaty of Lisbon – regime, the Court will have full jurisdiction over all AFSJ matters, as those are going to be fully integrated in what is now the first pillar. Some limitations will continue to apply, however, while a special AFSJ procedure will be institutionalised. Indeed, if we look into the new Treaty we may identify general modifications to the Court’s structure and jurisdiction affecting the AFSJ (section 2), modifications in the field of the AFSJ stemming from the abolition of the pillar structure (section 3) and, finally, some rules specifically applicable to the AFSJ (section 4).

Enhancing the Brazil-EU Strategic Partnership: From the Bilateral and Regional to the Global. CEPS Paperback. October 2013

This book examines the Brazil-EU Strategic Partnership and is the result of a project that ‘twinned’ five sets of eminent Brazilian and European scholars to investigate themes of undoubted strategic significance: macroeconomics, trade policy, climate change, foreign policy and continental regionalism. Results show that while the two parties cannot claim to determine global policies, they can develop a specialist niche in global affairs, working together in the avant-garde of those searching for workable global solutions, seeking to bridge the frequent wide differences between the West and the rest, or North and South, or old powers and new ones.

Making Autonomies Matter: Sub-State Actor Accommodation in the Nordic Council and the Nordic Council of Ministers - An Analysis of the Institutional Framework for Accommodating the Faroe Islands, Greenland and Åland within ‘Norden’. EDAP Paper 03/2014

Sovereign powers are not absolute but exercised in varying areas and to varying degrees by sub-state, state and supra-state entities. The upward dispersion of power to international organisations carries implications for the sub-state level, while sub-state governance poses demands as to the conduct of governance at the international level. It is well recognised that sub-state entities, such as federal states and autonomies, may have the (restricted) capacity to enter into international relations. But what capacities do international organisations have to accommodate autonomies in their institutional frameworks? This paper shall present a case study of one such framework, namely Nordic co-operation and the accommodation of the Nordic autonomies, the Faroe Islands, Greenland and Åland, within its institutional framework. Within ‘Norden’, the position of autonomies has been scrutinised and adapted on several occasions, in the late 1960s, early 1980s and in the mid-2000s. The accommodation of the autonomies has been discussed in light of evident implications of statehood and international legal personality and the institutional arrangements eventually carved serve well to illustrate the challenges and opportunities international organisations face in the attempt to accommodate multi-level systems.

The End of the Transitional Period for Police and Criminal Justice Measures Adopted before the Lisbon Treaty: Who monitors trust in the European Criminal Justice area? CEPS Liberty and Security in Europe No. 74, December 2014

This study examines the legal and political implications of the forthcoming end of the transitional period for the measures in the fields of police and judicial cooperation in criminal matters, as set out in Protocol 36 to the EU Treaties. This Protocol limits some of the most far-reaching innovations introduced by the Treaty of Lisbon over EU cooperation on Justice and Home Affairs for a period of five years after the entry into force of the Treaty of Lisbon (until 1 December 2014), and provides the UK with special ‘opt out/opt-in’ possibilities. The study focuses on the meaning of the transitional period for the wider European Criminal Justice area. The most far-reaching change emerging from the end of this transition will be the expansion of the European Commission and Luxembourg Court of Justice scrutiny powers over Member States’ implementation of EU criminal justice law. The possibility offered by Protocol 36 for the UK to opt out and opt back in to pre-Lisbon Treaty instruments poses serious challenges to a common EU area of justice by further institutionalising ‘over-flexible’ participation in criminal justice instruments. The study argues that in light of Article 82 TFEU the rights of the defence are now inextricably linked to the coherency and effective operation of the principle of mutual recognition of criminal decisions, and calls the European Parliament to request the UK to opt in EU Directives on suspects procedural rights as condition for the UK to ‘opt back in’ measures like the European Arrest Warrant.

A summary of the politico-economic changes taking place during Vladimir Putin's first term in office; Chechnya and Russia: The significance of the Chechen problem for contemporary Russia. OSW Study 11/2003

Putin's first term in office: The most significant achievement of Vladimir Putin's team over the three years of his term of office is the realisation of legislative changes, which may constitute a base for further - more detailed - political and economic reforms. This is, to a certain degree, a return to the economic tasks set out by a team of reformists in the early 1990s, which were impossible to realise at the time due to conflicts between the Kremlin and legislative powers. Chechnya and Russia: The purpose of this analysis is to examine the significance of the Chechen issue for contemporary Russia. Part I discusses the history of the conflict from 1991 to date and the impact of developments in the republic on Russia as a whole. Part II is an attempt to indicate the areas of Russian reality that are most deeply affected by the Chechen problem.

Designing a Genuine EMU: Which "Unions" for EU and Eurozone? Bruges European Economic Policy (BEEP) Briefing 34/2014

The initial ‘framing’ (in the summer of 2012) of the ‘genuine EMU’ for the wider public suggested to design an entire series of ‘unions’. So many ‘unions’ are neither necessary nor desirable – only some are and their design matters. The paper critically discusses first the negative fall-out of the crisis for EMU, and subsequently assesses the fiscal and the banking unions as accomplished so far, without going into highly specific technical details. The assessment is moderately positive, although there is ample scope for further improvement and a risk for short-term turbulence once the ECB has finished its tests and reviews. What about the parade of other ’unions’ such as economic union, social union and political union? The macro-economic imbalances procedure (MIP) and possibly the ESRB have overcome the pre-crisis disregard of macro competitiveness. The three components of ‘economic union’ (single market, economic policy coordination and budgetary disciplines) have all been strengthened. The last two ‘unions’, on the other hand, would imply a fundamental change in the conferral of powers to the EU/ Eurozone, with drastic and possibly very serious long-run implications, including a break-up of the Union, if such proposals would be pushed through. The cure is worse than the disease. Whereas social union is perhaps easier to dismiss as a ‘misfit’ in the EU, the recent popularity of suggesting a ‘political union’ is seen as worrisome. Probably, nobody knows what a ‘political union’ is, or, at best, it is a highly elastic notion: it might be thought necessary for reasons of domestic economic reforms in EU countries, for a larger common budget, for some EU tax power, for (greater) risk pooling, for ‘symmetric’ macro-economic adjustment and for some ultimate control of the ECB in times of crisis. Taking each one of these arguments separately, a range of more typical EU solutions might be found without suggesting a ‘political union’. Just as ‘fiscal capacity’ was long an all-or-nothing taboo for shifting bank resolution to the EU level, now solved with a modest common Fund and carefully confined but centralised powers, the author suggests that other carefully targeted responses can be designed for the various aspects where seen as indispensable, including the political say of a lender-of-last-resort function of the ECB. Hence, neither a social nor a political union worthy of the name ought to be pursued. Yet, political legitimacy matters, both with national parliaments and the grassroots. National parliaments will have to play a larger role.

EU Democratic Legitimacy and National Parliaments. CEPS Essay No. 7, 25 November 2013

The role of national parliaments in the EU has been at the centre of a long debate. Since the Maastricht treaty, new powers to the EU level have been accompanied not only by an increasing role of the European Parliament (EP) in the legislative process, but also by a number of declarations and protocols to ensure that national parliaments received the information and documents required to effectively monitor their governments in EU affairs. The Lisbon Treaty extended the guarantees and also included new modes of direct participation. The proper use of the mechanisms in place, namely, the subsidiarity checks, the political dialogue with the Commission and the inter-parliamentary cooperation with the European Parliament, has become of vital importance in view of recent developments in EU economic policy and beyond. The choice for increasing inter-governmentalism in decision-making and the centralisation of the implementing and supervisory powers in the Commission and the Central Bank have raised questions about political accountability and the appropriate involvement of parliaments. However, the extent to which national parliaments should be more involved is also rather controversial. This essay examines the difficulty of defining and addressing the question of the democratic legitimacy in the EU. It examines the role of the national parliaments in the treaties and explores ways in which they can contribute to improving that legitimacy.

On Political Union in Europe: The changing landscape of decisionmaking and political accountability. CEPS Essay No. 4, 21 February 2013

This essay discusses how recent developments have modified the existing allocation of tasks between the EU and national levels and the legitimising mechanisms in decision-making by the EU institutions. It examines in turn the increasing differentiation emerging in member states’ participation in EU policies and institutions, the changing configuration of executive powers and its relationship to the community method, the criteria governing the transfer of economic powers from the member states to the Union and the emerging democratic accountability and legitimising mechanisms before both the European and the national parliaments. Some main implications for the future of European institutions are summarised in the conclusions.

The Italian Parliament and the EU: a slow and gradual Europeanization. ACES Working Papers, August 2009

In this paper we discussed how the literature traces a growing involvement of the national parliaments in EU policy-making. Three phases can be distinguished: limited or no involvement was the trend until the 1980s; after the Single Act (SEA, 1987), national parliaments started to be interested in European affairs and to set up specialized committees; following the Maastricht Treaty (TUE, 1992), the involvement of national parliaments in EU affairs became a response to the question of "democratic deficit" in the EU (Norton, 1995). The growing number of policies dealt with at the EU level, the consequently increased influence of EU law in national legislations, the new powers of the Union: all of these worked together to push national legislators to seek a scrutiny role in the drafting of EU legislation. According to Laprat (1995: 1), once the TUE was formally approved, a more parliamentary climate prevailed. In more recent years, national parliaments have distinguished themselves for their increased role in the scrutiny of EU legislation (Raunio and Hix, 200I: !52); more specialized MPs sit in the committees on EU affairs; the amount of work for EU specialists has increased. Also, parliamentary scrutiny, initially only optional and ex post, is now increasingly ex ante and/or mandatory (Maurer and Wessels, 2001: 425-475).