Student's cross-perception of the economic crises in the European Union and in Southeast Asia. EU Centre in Singapore Working Paper No. 11, December 2012

The financial crisis of 1997-1998 in Southeast Asia and the European Union’s financial crisis of 2008 followed by the sovereign debt crisis represented major policy events in the regions and beyond. The crises triggered policy adjustments with implications on economic and other policies. This paper aims at evaluating the perception of university students in the European Union (EU) and Southeast Asia on the management of these crises. It strives to confirm several ex ante assumptions about the relationship between students’ background, their policy orientation and their knowledge of the European Union and ASEAN policies. It also provides an analysis of the students’ evaluation of the geopolitical importance of the global regions and the EU and ASEAN policies. The paper is based on opinion surveys conducted during the first part of 2012 at four universities, two in the EU and two in ASEAN countries. In the eyes of EU and ASEAN students, the EU crisis is not being managed appropriately. The citizens of the EU surveyed were even significantly more critical of the EU’s anti-crisis measures than any other surveyed group. Their ASEAN counterparts were generally more positive in their evaluations.

Strengthening the strategic choice offered to the EU’s southern Mediterranean neighbours. CEPS Commentary, 1 February 2013

Finding that the European Neighbourhood Policy (ENP) currently lacks a strategic vision that would offer states in the southern Mediterranean substantial returns in exchange for making tough reforms, this CEPS Commentary suggests that this weakness can be overcome through a concrete prospect of regional integration pro-actively driven forward by the European Union. Taking inspiration from current projects such as the Energy Community Treaty, the authors urge the EU to explicitly incorporate “legally binding sectoral multilateralism” into the ENP. This would provide the Union’s partners with a tangible prospect of reaping real long-term benefits from EU cooperation and reinvigorate the ENP for the next decade.

EU-Mercosur trade relations: impacts of exchange rate misalignments on tariffs. CEPS Working Document No. 372, February 2013

The issue of “trade and exchange rate misalignments” is being discussed at the G20, IMF and WTO, following an initiative by Brazil. The main purpose of this paper is to apply the methodology developed by the authors to exam the impacts of misalignment on tariffs in order to analyse the impacts of misalignments on the trade relations between two customs unions – the EU and Mercosur, as well as to explain how tariff barriers are affected. It is divided into several sections: the first summarises the debate on exchange rates at the WTO; the second explains the methodology used to determine exchange rate misalignments; the third and fourth summarises the methodology applied to calculate the impacts of exchange rate misalignments on the level of tariff protection through an exercise of ‘misalignment tariffication’; the fifth reviews the effects of exchange rate misalignments on tariffs and its consequences for the trade negotiations between the two areas; and the last concludes and suggests a way to move the debate forward in the context of regional arrangements.

spotlight europe #2013/03 – March 2013: The European Union and Russia at a Crossroads

The European Union and Russia are strategic partners – through their geographic situation, their common history, through social and economic obligations. Currently, the EU’s relations with Russia are under pressure for innovation. The EU’s ability to manoeuvre is hindered by the financial crisis, which has developed into a crisis of the Union’s political integration. For that reason, the EU’s relations with Russia depend on the Union’s ability to overcome the crisis and undertake reforms.

The Euro Crisis, the Other Crisis and the Need for Global Thinking

In addition to the euro crisis the EU faces a second, more existential crisis, in the form of an ill-defined notion of the Union’s global role. This contribution argues that the euro crisis should not redefine perceptions of the EU on the global stage, which it is in danger of doing. Instead, the EU and its members should embark upon a strategic reassessment in order to define three core interrelated factors. First, the nature of the EU’s actorness remains ill-defined and it is therefore necessary to explain, both within and beyond the Union, what its global role is. Second, in order to facilitate the joining up of the myriad of sub-strategies in EU external relations, the notion of ‘red lines’ should be considered which define specific aspects of behaviour that are mainstreamed throughout the EU’s external actions and, more importantly, upheld. Third, in spite of the rapid development of the harder elements of the EU’s actorness over the last decade or so, there remains a worrying gap between rhetoric and reality. This aspect is of particular concern for the United States and will affect perceptions of the EU’s ability to be a genuine strategic partner at a time of dramatic change in the international system. By engaging in what will inevitably be a difficult debate, the EU and its members will not only help give purpose and strategic direction to the Union’s actions on the international scene, it will also speak to the euro crisis since both are fundamentally about the future shape and direction of European integration.

l bilanciamento tra le libertà economiche e i diritti sociali collettivi operato dalla Corte di Giustizia è un contemperamento tra diritti equiordinati?* = The balance between economic freedoms and collective social rights and actions; Court of Justice is a choice between rights equiordinati? Actions by the Court of Justice. WP C.S.D.L.E. “Massimo D’Antona”.INT – 98/2012

In the Viking and Laval judgments and more recently in the Comm. v. Germany ruling, the Court of Justice applied the proportionality test to collective rights, setting a series of restrictions to the exercise of the right to strike and the right to collective bargaining. The way the ECJ balances the economic freedoms and the social rights is indeed very different from that of the Italian Constitutional Court. Unlike the European Union Treaties, the Italian Constitution recognizes an important role to the right to take collective action which has to be connected with article 3, paragraph 2, consequently the right of strike is more protected than the exercise of economic freedoms.

Why a more accurate EU definition of SMEs matters. ECMI Commentary No. 35, 15 November 2013

As part of the European Union’s commitment to deliver greater access to finance for small- and medium-sized enterprises (SMEs), EU policy-makers will have to deal with a fragmented market landscape and responses by individual member states to address failures. On the basis of some early evidence, this Commentary calls for a rethinking on the part of the EU of its definition of an SME, which currently does not take into account the internal market dimension. A more accurate definition, reflecting the internal market and the stages of evolution of a firm and its financing needs, would allow better benchmarking and a comparison of policy responses that often claim to address market failures in SME finance.

50 years of the ‘twin engine’. Franco-German reconciliation, European integration and reflections for Asia. EU Centre Singapore Background Brief No. 8, March 2013

On 22 January 2013, French President François Hollande and German Chancellor Angela Merkel gathered in Berlin to celebrate the 50th anniversary of the signing of the Élysée Treaty, the document that ended centuries of rivalry and warfare between their two countries. It is all too easy to forget the importance of Franco-German reconciliation. The 1950 Schuman Declaration, which led to the creation of the European Union’s (EU) predecessor, the European Coal and Steel Community (ECSC), sought to render the prospect of war between France and Germany ‘not only unthinkable but materially impossible’. Over 60 years later, when the EU was awarded the Nobel Peace Prize, the Norwegian Nobel Committee noted that indeed, ‘war between Germany and France is unthinkable’. Halfway around the world in Asia, the other theatre of World War II, tensions between China and Japan have arisen, with Taiwan and South Korea also in the fray. Nationalist movements in these countries have grown. This background brief lays out the issues for a timely reappraisal of the applicability, or otherwise, of the European integration and reconciliation processes to East Asia. The brief seeks to outline the contours of the historic act of Franco-German reconciliation, and its consequences ever since. Starting from a brief look at the history of rivalry and war between the two countries, the brief examines the events leading to the signing of the Élysée Treaty in 1963, and the development of Franco-German exchanges that have cemented the relationship. Difficulties between the countries are also raised. A timescale analysis of the opinion of the two publics is considered, as a measure of the success of Franco-German reconciliation.

What role for migration policy in the Ukraine crisis? CEPS Commentaries, 27 March 2014

While the geopolitics of the Ukraine crisis have dominated headlines, little attention has been paid to the potential challenges arising from the movement of people from the region to the EU. Yet recent history should tell us this could be a grave oversight. As we witnessed during the Arab Spring in 2011, political upheaval can result in people fleeing their state in fear of persecution or seeking to leave their state in search of new horizons and economic opportunities. The EU would do well to learn from that experience and the policy failures that resulted from the Union’s response of closing its borders and returning people to Africa. This Commentary argues that it is critical that – independently of the still uncertain outcome of the Ukraine crisis – the EU formulates and implements a credible policy strategy addressing the potential impact and benefits of mobility between Ukraine and the EU.

The Great Transformation: Memo to the Incoming EU Presidents. Bruegel Policy Brief 2014/04, July 2014

The European Union’s leadership spent the last five years fighting an acute and existential crisis. The next five years, under your leadership, will be no less difficult. You will have to tackle difficult economic and institutional questions while being alert to the possibility of a new crisis. You face three central challenges: (1) The feeble economic situation prevents job creation and hobbles attempts to reduce public and private debt; (2) EU institutions and the EU budget need reform and you will have to deal with pressing external matters, including neighbourhood policy and the EU’s position in the world; (3) You will have to prepare and face up to the need for treaty change to put monetary union on a more stable footing, to review the EU’s competences and to re-adjust the relationship between the euro area and the EU, and the United Kingdom in particular.

So far apart and yet so close: Should the ECB care about inflation differentials? Bruegel Policy Contribution, Issue 2014/10 September 2014

Inflation rates can differ across regions of monetary unions. We show that in the euro area, the US, Canada, Japan and Australia, inflation rates have been substantially and persistently different in different regions. Differences were particularly substantial in the euro area. Inflation differences can reflect normal adjustment processes such as price convergence or the Balassa-Samuelson effect, or can reflect the different cyclical position of regions. But they can also be the result of economic distortions resulting from segmented markets or unsustainable demand and credit developments fueled by low real interest rates. In normal times, the European Central Bank cannot influence such developments with its single interest rate instrument. However, unconventional policy measures can have different effects on different countries depending on the chosen instrument, and should be used to reduce fragmentation and ensure the proper transmission of monetary policy. The new macro prudential policy tools are unlikely to be practical in addressing inflation divergences. It is crucial to keep the average inflation rate close to two percent so that inflation differentials are possible without deflation in some parts of the euro area, which in turn might endanger area-wide financial stability and price stability.

Priorities for the Next Legislature: EU external action. CEPS Commentary, 29 September 2014

At a time when the European Union’s strategic and geopolitical environment is more troubled and unpredictable than it has been for decades, the European Council is calling for stronger EU engagement in international affairs. The rest of the rapidly changing world is not going to wait for the EU to get its act together to defend its own values and interests. This CEPS Commentary sets out four priorities for High Representative/Vice-President-designate Federica Mogherini as she takes up her role as leader of the European External Action Service and the next 'RELEX' Group of Commissioners.

Brexit or not? Time for the EU to move. EPC Commentary, 8 September 2014

The deteriorating relationship between the United Kingdom (UK) and the rest of the EU, including the prospect of a referendum on EU membership, would have dominated the Union’s agenda had it not been for the economic/financial crisis, followed by the external crisis which we are now facing in the East. Precisely because of these crises, it is now time for the incoming European Commission to take the bull by the horns and ensure that the EU can move on from a potential referendum and its possible outcomes. The June European Council noted that “the UK raised some concerns related to the future development of the EU. These concerns will need to be addressed. In this context, the European Council noted that the concept of ever closer union allows for different paths of integration for different countries, allowing those that want to deepen integration to move ahead, while respecting the wish of those who do not want to deepen any further.” While the EU has, arguably, successfully developed at different speeds for decades, to address the UK’s (fundamental) concerns, it is now time to work out whether and how the UK can be accommodated, and what this would mean in practice. UK membership is desirable but not at any price, so the aim should be to keep the UK in, while also ensuring that the principles on which the EU is built are protected. There will need to be a modus operandi which enables the EU and in particular, the Eurozone, to continue to make progress in addressing the shortcomings of European integration and European Monetary Union (EMU) in particular, while at the same time offering a reform package that can satisfy the UK. This does not necessarily mean that all EMU reforms have to be within the EU framework: additional intergovernmental arrangements could also be a possibility. However, this could add to the complexity and inefficiency of the system, as well as sidelining the supranational element of EU governance which will be needed to make EMU function.

EU enlargement to the Balkans: will the leopard change its spots? EPC Commentary, 29 September 2014

As the leadership of the European Union hands over the baton to a new management this autumn, will the winds of change blow also through the cobwebs of the EU’s enlargement agenda? Jean-Claude Juncker – the incoming President of the European Commission – has already promised to put the gearbox of further EU widening in neutral for the next five years of his mandate, and has designated the Austrian Johannes Hahn as Commissioner for the re-baptised portfolio of now European Neighbourhood Policy and Enlargement Negotiations, instructing him to focus on the Union’s political and economic ties with Southern and Eastern Europe, and in particular with the Balkans. Such an approach in the field of enlargement – once crowned the jewel of EU foreign policy – has all the appeal of a damp rag but does not necessarily depart from the festina lente strategy of the recent past. Inside the Union, political appetite and public support for expansion have been fizzling since Bulgaria and Romania joined in 2007, and were then severely curbed in the context of the on-going crisis by growing fears of importing organised crime and migrants from the Balkans. Juncker’s logic of consolidation sounds depressingly similar to what it supposedly replaces and incidentally, it also fits neatly with the unambitious and inward-looking mantra favoured at present in discussions at all levels on the future of European integration, more generally. With the 28-member block determined to catch its breath in the immediate time period, and given that even the forerunner countries in the Balkans – that is, Montenegro and Serbia – will realistically need more than five years to complete their accession talks, what priorities should guide Commissioner Hahn, soon to be Directorate-General for Neighbourhood and Enlargement Negotiations – when they get down to business on 1 November?

Why the EU must reengage with Turkey. EPC Commentary, 29 September 2014

Democratic values and basic rights in Turkey are hanging by a thread. Over the past eighteen months the rule of law, civil liberties and freedoms have been eroded which has left many Turks anxious over the direction in which their country is heading. With Turkey’s accession negotiations de facto frozen, the EU finds itself with little leverage over Ankara. Calls of concern have fallen on deaf ears as Turkey’s leadership has become increasingly belligerent, with its EU related narrative overflowing with resentment. Because Turkey’s accession negotiations are irreversibly intertwined with Turkey-EU cooperation in other areas, this has had a negative impact on the broader relationship between both sides. Recent examples include the issue of foreign fighters traveling from Europe to Syria via Turkey. Each side has accused the other of not doing enough to stem the flow. Likewise, following the decision of Russian President, Vladimir Putin, to ban the import of agricultural goods from countries that have placed sanctions on Moscow, the EU asked Turkey to demonstrate solidarity, as a “candidate country”, and not to increase exports of agricultural products to Russia. Turkey rejected this request and is reportedly working on strengthening trade ties with Moscow. Turkey remains an important partner in a number of key areas including trade, energy, foreign and security policy and migration. At a time when the EU faces crises in both its Eastern and Southern neighbourhoods, a reliable and predictable Turkey, with which it can cooperate in the Black Sea and Middle East neighbourhoods is crucial. Hence the vision and plans of the EU’s new leadership, in particular new Foreign Policy Chief, Federica Mogherini, and Commissioner for European Neighbourhood Policy and Enlargement Negotiations, Johannes Hahn, how to shape relations with Ankara is particularly significant. The Union’s current policy is counterproductive and is further eroding trust and cooperation rather than enhancing it. It needs to be turned around.