The ECB AQR and the EBA Stress Test: What will the numbers tell? CEPS Commentary, 23 October 2014

From the Introduction. With the results of its asset quality review (AQR), to be published on 26 October 2014, the European Central Bank intends to provide clarity on the shape of the 120 banks it will supervise in the eurozone, and it may request a series of follow-up actions before assuming its new set of tasks under the Single Supervisory Mechanism (SSM) Regulation in November. On the same day, the European Banking Authority (EBA) will also be publishing the results of its stress test, covering 123 banks across 22 European Economic Area (EEA) countries. For the ECB, it will be a matter of setting the standard for its future task, whereas EBA, seeks to restore the confidence it lost in the 2011 stress test and 2012 capital exercise. Both institutions will need to indicate how they will cooperate in the future in these tasks, and through enhanced disclosure, strengthen the confidence in the European banking system.

Which Union for Europe’s Capital Markets? ECMI Policy Brief No. 22, 13 February 2015

The call for a Capital Markets Union has been a useful device to raise awareness about the need for more integration in Europe's capital markets. Despite years of harmonising regulation and a single currency, Europe’s capital markets remain fragmented. This Policy Brief calls for targeted measures to overcome fragmentation, through enhanced enforcement, strengthening of the European supervisory authorities, enhanced disclosure and comparability of financial information and the mobilisation savings in EU-wide investment funds.

European Corporate Governance Reform and the German Party Paradox. CES Germany & Europe Working Papers, No. 03.1, 2003

This paper addresses the current discussion on links between party politics and production regimes. Why do German Social Democrats opt for more corporate governance liberalization than the CDU although, in terms of the distributional outcomes of such reforms, one would expect the situation to be reversed? I divide my analysis into three stages. First, I use the European Parliament’s crucial vote on the European takeover directive in July 2001 as a test case to show that the left-right dimension does indeed matter in corporate governance reform, beside cross-class and cross-party nation-based interests. In a second step, by analyzing the party positions in the main German corporate governance reforms in the 1990s, I show that the SPD and the CDU behave “paradoxically” in the sense that the SPD favored more corporate governance liberalization than the CDU, which protected the institutions of “Rhenish,” “organized” capitalism. This constellation occurred in the discussions on company disclosure, management accountability, the power of banks, network dissolution, and takeover regulation. Third, I offer two explanations for this paradoxical party behavior. The first explanation concerns the historical conversion of ideas. I show that trade unions and Social Democrats favored a high degree of capital organization in the Weimar Republic, but this ideological position was driven in new directions at two watersheds: one in the late 1940s, the other in the late 1950s. My second explanation lies in the importance of conflicts over managerial control, in which both employees and minority shareholders oppose managers, and in which increased shareholder power strengthens the position of works councils.

Resource Efficiency Indicators for Policy-Making. CEPS Working Document No. 415/November 2015

In the EU, resource efficiency has been high on the political agenda since 2011, when the European Commission first included it as one of the seven flagship initiatives in its Europe 2020 Strategy for “smart, sustainable and inclusive growth”. Resource efficiency is not only considered an environmental necessity, but also a political, economic and security opportunity. This paper first stresses the benefits and opportunities for the EU of improving its resource efficiency. It then explains the added value of the www.measuring-progress.eu web tool, which aims to improve the way policy-makers and others involved in the policy process can access, understand and use indicators for resource efficiency. It provides practical examples of relevant indicators in the form of the EU Resource Efficiency Scoreboard and a case study showing how the web tool established by NETGREEN can be used in practice. The paper concludes with a number of policy messages.

An EU mechanism on Democracy, the Rule of Law and Fundamental Rights. CEPS Paper in Liberty and Security in Europe No. 91/April 2016 Thursday, 21 April 2016

The European Union is founded on a set of common principles of democracy, the rule of law, and fundamental rights, as enshrined in Article 2 of the Treaty on the European Union. Whereas future Member States are vetted for their compliance with these values before they accede to the Union, no similar method exists to supervise adherence to these foundational principles after accession. EU history proved that this ‘Copenhagen dilemma’ was far from theoretical. EU Member State governments’ adherence to foundational EU values cannot be taken for granted. Violations may happen in individual cases, or in a systemic way, which may go as far as overthrowing the rule of law. Against this background the European Parliament initiated a Legislative Own-Initiative Report on the establishment of an EU mechanism on democracy, the rule of law and fundamental rights and proposed among others a Scoreboard on the basis of common and objective indicators by which foundational values can be measured. This Research Paper assesses the need and possibilities for the establishment of an EU Scoreboard, as well as its related social, economic, legal and political ‘costs and benefits’.