Reviewing the EU’s Crisis Management Procedures. IES Policy Brief Issue 2012/04/November 2012

Summary. The ongoing review of the EU’s Crisis Management Procedures warrants attention. What passes as an update of an arcane and technical document masks a profoundly political debate concerning what the Common Security and Defence Policy (CSDP) should be about. This policy brief summarises the main proposals and formulates a set of critical reflections. It calls for replacing the bureaucratic scheming with a more forthright political debate, and warns against sacrificing incompatible organisational cultures on the altar of the comprehensive approach. At a time when European security and prosperity trends are increasingly pointing downwards, the EEAS and the member states must look to the future and embrace, rather than resist, change.

Extending Working Lives: The Case of Denmark. CEPS Working Document No. 404, 17 February 2015

Extending working lives has been a key item on the political agenda in Denmark for at least two decades now. This study details recent and prospective reforms to the voluntary early retirement scheme and the pension age, as well as current policy initiatives to keep older workers in employment. Other aspects central to a long working life, such as health, lifelong learning, age management practices in companies, and elderly workers’ motivation are discussed in depth. Overall, Denmark is in a relatively good state when it comes to older workers’ labour market participation and related job satisfaction. This impacts positively on the public finance challenge linked to population ageing which, given agreed reforms, should be manageable. Ongoing reform implementation is likely to substantially increase the employment of those aged 60 and over. Nevertheless, surveys point to age discrimination as a potential problem and people who fall into unemployment at a late stage of their careers still face challenges to reemployment.

The ‘Visible Hand’ of the ECB’s Quantitative Easing. CEPS Working Document No. 407/May 2015

Quantitative easing à la ECB has produced so far an impact on long-term nominal rates through ex ante channels: signalling channels, term duration channels, and risk premia channels. The term duration channel will also lead to a lengthening of the average maturity of government debts, with possible implications for fiscal policy. The ECB’s determination to buy government bonds in a fragmented market with a low net supply may also produce an ex post impact, during the actual asset purchases, but less on nominal rates and more on financial plumbing, as recent volatility suggests. As the effects of scarce supply in collateral markets are felt, repo rates remain well below zero. Lower supply and limited re-usability of high quality collateral, capped by regulatory requirements, is a constraint on market liquidity and compresses dealers’ balance sheets. By keeping a depressed yield curve and asset prices high, QE may also accelerate the consolidation of both traditional and capital-market based (dealer) bank business models. What is less clear is how these changing business models will interact with the sharp rise of the asset management industry in the aftermath of the crisis, which raises questions about the implications for global collateral flows and deposit-like funding channels.