Social Citizenship and Institution Building: EU-Enlargement and the Restructuring of Welfare States in East Central Europe. CES Germany & Europe Working Paper, No. 01.2, April 2001

With the EU-enlargement process well underway, this paper focuses on social citizenship as a conceptual frame for analyzing the restructuring of social institutions in applicant countries in East Central Europe. So far, comparative welfare state analysis has concentrated mainly on the developed economies of the OECD-countries; there is little systematic analytical work on the transitions in post-communist Europe. Theoretically, this paper builds on comparative welfare state analysis as well as on new institutionalism. The initial hypothesis is built on the assumption that emerging patterns of social support and social security diverge from the typology described in the comparative welfare state literature inasmuch as the transformation of postcommunist societies is distinctly different from the building of welfare states in Europe. The paper argues that institutionbuilding is shaped by and embedded in the process of European integration and part of governance in the EU. Anticipating full membership in the European Union, the applicant countries have to adapt to the rules and regulations of the EU, including the "social acquis." Therefore, framing becomes an important feature of institutional changes. The paper seeks to identify distinct patterns and problems of the institutionalization of social citizenship.

A ship run aground Deepening problems in the Ukrainian economy. OSW Commentary Number 173, 16 June 2015

The drop in Ukraine’s GDP by nearly 18% in the first three months of 2015 (versus the corresponding period in 2014) has confirmed the decline of the country’s economy. Over the last 14 months, the Ukrainian currency was subject to an almost threefold devaluation against the US dollar, and in April 2015 the inflation rate was 61% (year-on-year), which exacerbated the impoverishment of the general public and weakened domestic demand. The main reason behind the crisis has been the destruction of heavy industry and infrastructure in the war-torn Donbas region, over which Kyiv no longer has control, as well as a sharp decline in foreign trade (by 24% in 2014 and by 34% in the first quarter of 2015), recorded primarily in trading volume with Ukraine’s major trade partner, i.e. Russia (a drop of 43%). The conflict has also had a negative impact on the production figures for the two key sectors of the Ukrainian economy: agriculture and metallurgy, which account for approximately 50% of Ukrainian exports. The government’s response to the crisis has primarily been a reduction in the costs of financing the Donbas and an increase in the financial burden placed on the citizens and companies of Ukraine. No radical reforms which would encompass the entire system, including anti-corruption reforms, have been carried out to stop the embezzlement of state funds and to facilitate business activity. The reasons for not initiating reforms have included the lack of will to launch them, Ukraine’s traditionally slow pace of bureaucratic action and growing dissonance among the parties making up the parliamentary coalition. The few positive changes, including marketisation of energy prices and sustaining budgetary discipline (in the first quarter of 2015, budgetary revenues grew by 25%, though partly as a result of currency devaluation), are being carried out under pressure from the International Monetary Fund, which is making the payment of further loan instalments to the tune of US$ 17.5 billion conditional upon reforms. Despite assistance granted by Western institutional donors and by individual states, the risk of Ukraine going bankrupt remains real. The issue of restructuring foreign debt worth US$ 15 billion has not been resolved, as foreign creditors who hold Ukrainian bonds have not consented to any partial cancellation of the debt. Whether Ukraine’s public finances can be stabilised will depend mainly on the situation in the east of the country and on the possible renewal of military action. It seems that the only way to rescue Ukraine’s public finances from deteriorating further is to continue to ‘freeze’ the conflict, to gradually implement wide-ranging reforms and to reach a consensus in negotiations with lenders.

Restructuring the Greek banking sector with an empty purse. CEPS Commentary, 13 July 2015

Greek banks are close to collapse, even if a new bail-out programme is agreed soon. The deterioration of the economy means that their fragile capital position is deteriorating further. In this CEPS Commentary, Daniel Gros observes that any new programme needs to include recapitalisation, comprising possibly a bail-in and restructuring to get the banking system working again. With only a small part of the assets unencumbered and a government with empty pockets, the depositors might have to take a large part of the burden. As private investors are unlikely to participate in a recapitalisation, foreign official funds will be needed. A direct equity investment by the EIB or the EBRD could be used to transfer control rights, and special ESM bonds could be used to provide additional capital without entailing additional risk to the creditors

Banks and the political economy of the sovereign debt crisis in Italy and Spain. CES Papers - Open Forum #18, 2013-2014

This paper sets out to explain why Spain experienced a full-fledged sovereign debt crisis and had to resort to euroarea financial assistance for its banks, whereas Italy did not. It undertakes a structured comparison, dissecting the sovereign debt crisis into a banking crisis and a balance of payments crisis. It argues that the distinctive features of bank business models and of national banking systems in Italy and Spain have considerable analytical leverage in explaining the different scenarios of the crises in each country. This ‘bank-based’ analysis contributes to the flourishing literature that examines changes in banking with a view to account for the differentiated impact of the global banking crisis first and the sovereign debt crisis in the euroarea later.

Greece is solvent but illiquid. What should the ECB do? CEPS Commentary, 15 June 2015

There is one feature of the sovereign debt crisis in Greece that is widely misunderstood, namely the effective debt burden of the country’s government. Since the start of the crisis, its sovereign debt has been subjected to several restructuring efforts

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 debt, the stock market and the state-owned enterprises. The sources of chaos on the Chinese financial markets. OSW Commentary NUMBER 201/16.03.2016

The government’s extensive programme for stimulating the economy has enabled China to maintain high economic growth after the global financial crisis in 2008. However, this success has come at the price of a number of negative economic phenomena and the consequences they have had are the major challenge for the government today. The vast programme of investments in infrastructure, construction and fixed assets, which has been the main source of economic growth over the past few years, has caused a rapid increase in China’s debt from 158% of GDP in 2007 to 282% in 2014. Along with the local governments in charge of implementing the programme, the Chinese sector of state-owned enterprises (SOEs) has been heavily burdened by the stimulation policy. The sector’s profitability has fallen, its indebtedness has increased and management problems have been revealed.

Maastricht 2.0 - Proposed reform of EU sovereign debt rules. Policy Brief #2012/05

The European Union’s regulations governing sovereign debt are based on the principle of equal treatment of all member states. The recommendations we make here concerning changes in European Union sovereign-debt reduction rules take account of national particularities, but are by no means arbitrary in nature. According to the calculations we present here, such reformed regulations would do far more to promote economic growth than would be the case under the Fiscal Compact’s European debt brake. By 2030, real gains in growth will amount to more than 450 billion euros more than the outcome that would presumably be obtained under the European debt brake.