Financial assistance to Greece: Three programmes. EPC Discussion Paper, 26 February 2016

There are a lot of myths surrounding the bailout money that was given to Greece. Many people still believe that the money never went to the Greek people, but to the Greek and European banks; that the intervention of the euro-area governments and the IMF dealt almost exclusively with the Greek debt; that very little money was used to finance Greek public expenditure; that most Greek debt was reimbursed; that no cuts were made to the stock of Greek government bonds on the market; and, finally, that so far, no cuts have been made to the debt of the Greek state towards the euro-area countries. In this Discussion Paper, Fabio Colasanti debunks some of those myths by taking stock of the numbers behind the financial support given to Greece by the countries of the euro-area and the IMF. Examining the three bailout programmes in detail, he discusses the reasons for and against a restructuring of the Greek public debt in 2010, its implementation in 2012, the degree in which the Greek debt towards the euro-area countries has already been cut, and the scope for further cuts. Finally, the paper explains how both issues were and are still dominated by internal political considerations, both in the creditor countries and in Greece.

The revision of the Posted Workers Directive: towards a sufficient policy adjustment? EPC Discussion Paper, 20 April 2016

Labour mobility within the European Union continues to be a limited phenomenon. This concerns both long-term intra-EU mobility and more temporary forms of mobility such as posting of workers, i.e. workers posted to another member state in the framework of cross-border service provision. Yet, despite the limited nature of posting, this topic is far from being absent from the public and political debates. Several factors contribute to this. Firstly, a surge in the number of posted workers has been noticed over the recent years and increased attention has therefore been paid to this issue. Quite a few economic sectors, including construction, manufacturing, and social work, are very concerned by this trend. Secondly, several types of abuses have been recorded such as letter-box companies, bogus self-employment and exploitation of the posted workers' vulnerable situation. Thirdly, questions have been raised as to whether the balance struck by the EU legislator in 1996 (when adopting the Posted Workers Directive) between the freedom to provide crossborder services and the workers' social rights is still valid today. These elements highlight the need for a policy adjustment in order to preserve the legitimacy of the citizens' and workers' freedom to move and, to a certain extent, of the social dimension of the European project. In this context, the European Commission published a proposal to revise the 1996 Directive in order to strike a better balance between economic and social rights. But is this proposal sufficient to ensure a level playing field between economic actors and equal treatment between workers? How will this proposal affect the implementation of other EU initiatives aiming to tackle fraud and abuse? What else is needed to address the tensions between the Single Market principles and the EU's social objectives? This discussion paper, published in the context of the Dutch Presidency and the ongoing negotiations of a revised Directive on posted workers, focuses on these questions while proposing some concrete solutions for a fairer policy framework.

Automatic Fiscal Stabiliser: Make it happen! EPC Discussion Paper, 2 May 2016

The eurozone crisis triggered a whole new series of innovations in EU economic governance in order to make the Union more resilient for the next economic downswing. But one of the more persistent issues are the socio-economic divergences between member states, identified by the Five Presidents’ Report as a major problem in the functioning of the Economic and Monetary Union (EMU). Debates took place in recent years about automatic stabilisers, and more specifically about the possibility of introducing an unemployment insurance within the EMU. While the need for some form of fiscal risk-sharing has become a dominant view in expert circles, there has been much less progress among the main political parties and stakeholders. In this study, Regula Hess and László Andor analyse the political feasibility of the adoption of an automatic fiscal stabiliser (AFS) for the eurozone by evaluating actors’ positions towards three distinctive proposals: 1) cyclical shock insurance, 2) reinsurance, 3) a European basic unemployment insurance; they included an empirical case study of France and Germany as the most relevant players within the intergovernmental bargaining constellation. Although the authors realise the current political context makes the adoption of an AFS improbable, Hess and Andor encourage stakeholders to further pursue the discussion, as windows of opportunities can open at any time, and even give some suggestions on what the parameters of the most feasible proposal might be.

German macro: how it's different and why that matters. EPC Discussion Paper, May 2016

Do the macroeconomics of the German political establishment really differ from standard western macroeconomics? That question was the starting point for the seminar on ‘German macro: How it’s Different and Why that Matters’, which was held at Heriot-Watt University in December 2015, with financial support from the Scottish Institute for Research in Economics (SIRE) and the Money, Macro & Finance Research Group (MMF). This ebook, edited by George Bratsiotis and David Cobham, is the result of that exercise; six of the papers were presented at the seminar in earlier versions, and the editors sought some additional papers to complete the range of perspectives offered. The authors all sought out to discover whether or not there is something unique about German macroeconomics, and in what ways it differs from standard western macroeconomics; is it true that the former neglects demand management (although it may be quite interventionist in other ways), rejects debt relief and emphasises structural reform designed to improve competitiveness as the (only) key to economic growth? How much of whatever difference exists is due to a well worked out set of ideas in the form of Ordoliberalism? In what way does it relate to Germany’s own experiences in different periods? And how far is this the result of political preferences and how much do the idiosyncrasies of these German views matter, for the development of the Eurozone and indeed the health of the German economy?

The EU Global Strategy: going beyond effective multilateralism? EPC Discussion Paper, June 2016

The ongoing consultation process on the European Union Global Strategy (EUGS) presents an occasion for the European Union (EU) to redress the European Security Strategy’s (ESS) shortcomings and update its stance on multilateralism. As rule-based multilateralism remains deeply entrenched in the Union’s DNA, the EUGS is unlikely to represent ground-breaking innovations as to how the EU should act in international affairs. The key challenge in respect of the EU’s multilateralism is twofold. The first challenge lies in setting out clear priorities for the EU’s multilateral action to be pursued collectively by the member states; and the second in determining the form of multilateralism that would best suit the promotion of the priorities concerned. In this collection of six essays, policy analysts and academics are presented with the question: Over a five year horizon, what do you think should be the focus of the EU’s multilateral agenda? The answers dwell on the EU playing a proactive role in relation to emerging powers especially China, and Latin America as a whole; furthering the EU’s soft power through ‘science diplomacy’; and EU leadership in building a global energy and climate community, and counter terrorism measures.

A Global Strategy for a soul-searching European Union. EPC Discussion Paper, 13 July 2016

On 28 June 2016, just a few days after the historic Brexit vote, High Representative of the Union for Foreign Affairs and Security Policy Federica Mogherini presented the paper on the new European Union Global Strategy (EUGS) at the European Council, outlining the strategic coordinates for the EU’s foreign and security policy. In this Discussion Paper, Giovanni Grevi takes a closer look at the EUGS and assesses its main rationale, features, added value and prospects against the backdrop of an ever more complex world. Not only is the EU dealing with increasingly contested and polarised politics at home, but the global theatre itself has become hugely disorienting, more integrated and yet more fragmented at the same time. The paper recalibrates the overall foreign policy posture of the EU and sketches out a more modest and concrete approach compared to earlier aspirations, and a more joined-up one compared to current practice. By doing so, the strategy seeks to square the circle between the need for Europe to be cohesive and purposeful in a harder strategic environment and the fact that domestic politics within the Union constrain its external action and drain its attractiveness. The EUGS calls on the EU and member states to fully take on their responsibility to underpin unity, prosperity and security at home by taking more effective and joined-up action abroad. The question is, of course, whether this call will be heeded.

MIGRATION PANORAMA. Schengen in the spotlight: a Europe with or without borders? APRIL 2016 (First edition)

The first edition of this new multi-authored publication entitled ‘Migration Panorama’ focuses on the consequences of the refugee and migration crisis on the Schengen area and the concept of a borderless union. Several external and EPC authors have contributed to building a comprehensive picture on the manifold challenges and possible consequences of maintaining and/or returning to internal border controls among Schengen countries. How does a signatory of the Schengen agreement see the current developments? What would be the impact of the reintroduction of physical borders on Europe’s digital economy? In what way do the V4 countries envisage to solve the ‘Schengen crisis’? How dangerous are the empty threats to expel Greece out of the Schengen area? What is the symbolic meaning of the Belgian border controls following the French decision to dismantle parts of the Calais ‘jungle’? Is saving Schengen only a question of national sovereignty or a matter of shared European responsibility? All these questions and many others are tackled in this first issue of the ‘Migration Panorama’ produced by EPC’ s Migration and Diversity Programme.

To be or not to be an EU member state – A question for the Balkan aspirants as well? EPC Commentary, 13 July 2016

Last month, a majority of British voters decided that the UK should leave the European Union (EU). In the wake of the Brexit result, anti-EU politicians in a host of member states began to float the idea of putting the same ‘in-out’ option to electorates in their own countries. As the economic and political fallout of the UK’s choice to withdraw from the EU continues to unfold, an acute sense of uncertainty gathers steam and ripples not just through the remaining member states but also their EU-hopeful neighbours in the Balkans. What will the departure of the UK from the EU mean for the Balkan enlargement process?