Vanishing lines in the sand – Why a new map of the Middle East is necessary. CEPS Commentary, 1 October 2013

As the stalemate in Syria drags on, territorial divisions in the country are becoming more entrenched and the civil war is spreading to Syria’s neighbours; aggravating long-standing sectarian divisions in the whole region. In the view of Steven Blockmans, a lasting agreement cannot be reached in the Middle East if world powers stick to infamous 1916 Sykes-Picot Agreement in which France and the UK secretly dealt with what came to be called the ‘Syria Question’. Any way out of the quagmire will require a grand bargain – one that establishes a new order in the whole region and draws borders accordingly.

The Ghost of Deflation Past. CEPS Hi-level Brief, 13 December 2013

This note takes a look at the development of monetary aggregates and debt in the G7 (US, UK, France, Germany, Italy, Canada and Japan), plus non-G7 euro-area countries, which have an important bearing on the future development of price levels. It also discusses the problem of restoring external competitiveness in the weaker euro-area countries without aggravating their debt burden. The key conclusions are i) monetary and debt developments in the G7 countries point to relatively sluggish growth but do not signal deflation risks and ii) the realignment of ‘internal real exchange rates’ in the euro area will most likely come through a rise in prices in Germany (and a few other stronger countries). The lessons learned in the early 1930s have made a come-back of deflation quite unlikely.