Information Guide: Common Foreign and Security Policy

A guide to the European Union’s Common Foreign and Security Policy (CFSP), with hyperlinks to sources of information within European Sources Online and on external websites

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.

EU Grand Strategy: Optimism is Mandatory. Egmont Security Policy Brief No. 36, July 2012

The Arab Spring, the American pivot, and the global crisis: these affect all of EU external action, but also present opportunities for EU action. A debate on grand strategy remains necessary.

The fiscal implications of a banking union. Bruegel Policy Brief 2012/02 [3?], September 2012

Systemic banking crises are a threat to all countries whatever their development level. They can entail major fiscal costs that can undermine the sustainability of public finances. More than anywhere else, however, a number of euro-area countries have been affected by a lethal negative feedback loop between banking and sovereign risk, followed by disintegration of the financial system, real economic fragmentation and the exposure of the European Central Bank. Recognising the systemic dimension of the problem, the Euro-Area Summit of June 2012 called for the creation of a banking union with common supervision and the possibility for the European Stability Mechanism to recapitalise banks directly.

The euro crisis: ten roots, but fewer solutions. Bruegel Policy Contribution 2012/17, October 2012

Many factors have contributed to the euro crisis. Some have been addressed by policymakers, even if belatedly, and European Union member states have been willing to improve the functioning of the euro area by agreeing to relinquish national sovereignty in some important areas. However, the most pressing issue threatening the integrity, even the existence, of the euro, has not been addressed: the deepening economic contraction in southern euro-area member states. The common interest lies in preserving the integrity of the euro area and in offering these countries improved prospects. Domestic structural reform and appropriate fiscal consolidation, wage increases and slower fiscal consolidation in economically stronger euro-area countries, a weaker euro exchange rate, debt restructuring and an investment programme should be part of the arsenal. In the medium term, more institutional change will be necessary to complement the planned overhaul of the euro area institutional framework. This will include the deployment of a euro-area economic stabilising tool, managing the overall fiscal stance of the euro area, some form of Eurobonds and measures to make euro-area level decision making bodies more effective and democratically legitimate.

A budget for Europe's Monetary Union. Bruegel Policy Contribution 2012/22, December 2012

In a monetary union, national fiscal deficits are of limited help to counteract deep recessions; union-wide support is needed. A common euro-area budget (1) should provide a temporary but significant transfer of resources in case of large regional shocks, (2) would be an instrument to counteract severe recessions in the area as a whole, and (3) would ensure financial stability. The four main options for stabilisation of regional shocks to the euro area are: unemployment insurance, payments related to deviations of output from potential, the narrowing of large spreads, and discretionary spending. The common resource would need to be well-designed to be distributionally neutral, avoid free-riding behaviour and foster structural change while be of sufficient size to have an impact. Linking budget support to large deviations of output from potential appears to be the best option. A borrowing capacity equipped with a structural balanced budget rule could address area-wide shocks. It could serve as the fiscal backstop to the bank resolution authority. Resources amounting to 2 percent of euro-area GDP would be needed for stabilisation policy and financial stability.

Military Capabilities: From Pooling & Sharing to a Permanent and Structured Approach. Security Policy Brief No. 37, September 2012

In 2013 the European Council for the first time since long will deal with European defence. An excellent opportunity: to move key Pooling & Sharing projects to the implementation stage in the short term, and to launch a permanent and structured approach to the development of European military capabilities for the long term.

Raiders of the Lost Art: Strategy-Making in Europe. Security Policy Brief No. 40, November 2012

Have Europeans lost the art of making grand strategy? In a reflection process initiated by Sweden, Poland, Italy and Spain, they are invited to rediscover it and draft a “European Global Strategy”. This policy brief argues that what the EU needs most is a short set of priorities for collective action, to be reassessed for each term of the High Representative.

Safeguarding the EDTIB: the Case for Supervising non-EU FDI in the Defence Sector. Security Policy Brief No. 41, December 2012

It is time for the EU member states to start collectively supervising non-EU FDI in Europe’s defence industries and infrastructures. This should be a prudent element of the nascent EDTIB and a way to maintain European security by encouraging greater coordination between the national supervisory frameworks.

Can Europe recover without credit? Bruegel Policy Contribution 2013/03, 15 February 2013

• Data from 135 countries covering five decades suggests that creditless recoveries, in which the stock of real credit does not return to the pre-crisis level for three years after the GDP trough, are not rare and are characterised by remarkable real GDP growth rates: 4.7 percent per year in middle-income countries and 3.2 percent per year in high-income countries. • However, the implications of these historical episodes for the current European situation are limited, for two main reasons: • First, creditless recoveries are much less common in high-income countries, than in low-income countries which are financially undeveloped. European economies heavily depend on bank loans and research suggests that loan supply played a major role in the recent weak credit performance of Europe. There are reasons to believe that, despite various efforts, normal lending has not yet been restored.Limited loan supply could be disruptive for the European economic recovery andthere has been only a minor substitution of bank loans with debt securities. • Second, creditless recoveries were associated with significant real exchange rate depreciation, which has hardly occurred so far in most of Europe. This stylised fact suggests that it might be difficult to re-establish economic growth in the absence of sizeable real exchange rate depreciation, if credit growth does not return.

Russia and the Common Space on Freedom, Security and Justice. CEPS Paper on Liberty and Security in Europe No. 54, 25 February 2013

EU-Russia cooperation in the framework of the Common Space on Freedom, Security and Justice, launched almost a decade ago in 2003, has borne fruit more in the security aspects than the justice and liberty-related policy areas. This study assesses the uneven cooperation on justice and home affairs between the EU and Russia, while delving into the intersection between cooperation on justice, liberty and security and the promotion of human rights, democracy and rule of law in EU-Russia relations. The study concludes by proposing a set of policy recommendations to the European Parliament for playing a more active role in this important field of cooperation between the EU and Russia.

A Copernican Turn for Banking Union. CEPS Policy Brief No. 290, 14 May 2013

Despite apparent consensus that the creation of a ‘Banking Union’ is essential for the survival of the euro, progress is painfully slow. The Single Supervisory Mechanism may not be ready before the middle of next year, the Single Resolution Mechanism may require a laborious change of the EU Treaty and common deposit insurance has been postponed into the indefinite future. Any real progress has been prevented by the protracted fights over which government will be the payer of last resort when banks fail because of past bad loans. In this Policy Brief, Thomas Mayer suggests that a radically new approach is needed if there is any prospect of moving beyond this impasse to reach full Banking Union. Instead of trying to move from common bank supervision over to resolution and then on to deposit insurance, he argues that policy-makers should go backwards and start with deposit insurance, move from there to resolution, and end with supervision.

E3+3 coercive diplomacy towards Iran: Do the economic sanctions add up? CEPS Policy Brief No. 292, 6 June 2013

More than ten years of international negotiations have brought no resolution to the nuclear dispute with Iran. In January 2012 the EU and US autonomously adopted an unprecedented sanctions package, mainly directed at the Iranian oil industry. Eighteen months later, figures show that the Iranian economy has been hit hard. Sanctions have not changed the regime’s calculus, however. Instead of further upping the pressure on Iran, the authors argue for a return to a more balanced dual-track approach so as to reinforce the moderate narrative within the Iranian ruling elite.

Armanents duplication in Europe: a quantitative assessment. CEPS Policy Brief No. 297, 16 July 2013 [is another Brief with no. 297]

Effectively addressing the issue of duplication in Europe’s defence systems will require a considerable amount of political will and, more importantly, a far-sighted vision of the way to go. Difficult choices will have to be made, and EU member states will have to invest in a complex exercise of coordination of defence and industrial policies and planning. However, the efficient management of EU defence budgets and the maintenance of a viable industrial base demand such efforts. After all, what is at stake is the EU’s ability to guarantee its own security. The author makes a series of proposals to address this issue ahead of the European Council of December 2013, which will be devoted to matters of security and defence.