The strength of the Christian Democrats, the weakness of the opposition. Germany before the parliamentary elections. OSW Commentary No. 114, 12.09.2013

The political campaign before Germany’s parliamentary elections to be held on 22 September has in all its glory reflected the trends visible during the last four years of the government of Chancellor Angela Merkel – the strength of the Christian Democrats, the weakness of the opposition and the increasing marginalisation of the coalition partner, the FDP. The CDU/CSU remains the most popular political choice in Germany, largely because Angela Merkel has consistently remained the most popular German politician. Everything indicates that the CDU/CSU will win the election, even though it has been running a passive campaign and the Chancellor herself has been avoiding confrontation, presenting herself as a kind of cross-party representative of the interests of all social groups. The Christian Democrats’ main competitors, the Social Democrats, have been unable to play to their strengths and present themselves as a serious alternative to the CDU/CSU. The Christian Democrats, despite their difficult cooperation with the liberal FDP, have declared their willingness to continue doing so during the next parliamentary term. If the numbers make that impossible, and the Social Democrats and the Greens have too few votes to be able to form a government, a grand coalition of the Christian Democrats and the SPD will be formed in Germany.

The Weakness of Post-Communist Civil Society Reassessed. CES Papers - Open Forum #11, 2012

During the last two decades, scholars from a variety of disciplines have argued that civil society is structurally deficient in post-communist countries. Yet why have the seemingly strong, active and mobilized civic movements of the transition period become so weak after democracy was established? And why have there been diverging political trajectories across the post-communist space if civil society structures were universally weak? This paper uses a wide range of data from various available sources to show that civil societies in Central and Eastern European countries are not as feeble as is commonly assumed. Some post-communist countries possess vigorous public spheres, and active civil society organizations strongly connected to transnational civic networks able to shape domestic policies. Following the calls by Anheier (2004) and Bernhard and Karakoç (2007) we adopt a multidimensional approach to the measurement of civil society. In a series of cross-section timeseries models, we show that our broader measures of civic and social institutions are able to predict the diverging transition paths among post-communist regimes, and in particular the growing gap between democratic East Central Europe and the increasingly authoritarian post-Soviet space.

The Protocol of Frankfurt: a new treaty for the eurozone. EPC Discussion Paper, 12 January 2016

At a time when the EU finds itself in a perfect storm of crises which it seems unable to overcome, a bold move is needed to reinvigorate the EU’s system of government and stave off the risk of disintegration. In order to address the inherent weakness of the EU’s monetary and economic governance, this pamphlet proposes a new treaty for the eurozone: the Protocol of Frankfurt. Written by Andrew Duff, former Member of the European Parliament and Visiting Fellow at the EPC, it is the first ever attempt to draft a treaty aimed at setting up a fiscal union. “The Protocol of Frankfurt provides the constitutional framework for a proper economic government and will, hopefully, also serve to accelerate the debate on the Five Presidents’ Report”. Realising that the time is not ripe for a major constitutional overhaul, the pamphlet instead puts forward a shorter treaty revision that concentrates on re-engineering the Maastricht arrangements for the economic and monetary union, taking on the form of a Protocol to be added on to the existing Treaties. Article 48(2) of the Treaty on European Union allows the government of any member state, the European Parliament or the Commission to table amendments to the Treaties. Our hope is that somebody, informed by this draft Protocol, does just that.

The known unknowns and the unknown unknowns of the EMU. Bruegel Policy Contribution 2012/18, October 2012

Extensive prior research on the economics of European monetary union highlighted some potential risks (the known unknowns) but overlooked others (the unknown unknowns). Asymmetries among participating countries, the potentially destabilising character of a one-size-fits all monetary policy, the weakness of adjustment mechanisms, the lack of incentives for fiscal discipline, the possibility of sovereign solvency crises and their adverse consequences were all known and understood. But policymakers often relied on a complacent reading of the evidence. • The potential for financial disruption was vastly underestimated. Economists generally did not consider, or underestimated, the possibility of balance of payment crises such as those experienced by southern European countries, or the risk of a feedback loop between banks and sovereigns. • Remedying EMU’s systemic deficiencies is on the policy agenda. Banking union would go a long way towards addressing the fault lines. The urgent question for economists is if it is going to be enough and, if not, what else should complement the ‘bare-bones’ EMU of Maastricht.

The Party of Regions monopolises power in Ukraine. OSW Commentary No. 40, 2010-09-29

Since the Party of Regions took power in Ukraine, the process of strengthening the executive branch of government at the expense of the others, together with the instrumental use of the law, has been progressing steadily. By seeking to restrict criticism of the government, the ruling party is aiming at marginalisation of opposition groups and establishing informal control over the main media (largely by exerting pressure on their owners). The role of the Security Service of Ukraine (SBU) is growing, as it is used increasingly frequently to put pressure on Western-oriented NGOs. The government’s control over the judiciary is expanding. These trends had existed before the Party of Regions’ ascension to power, but they were much weaker, as the previous governments did not enjoy such a strong position or the ability to achieve their ends so efficiently. The Party of Regions is planning to take another step towards total power during the local elections scheduled for October 2010. The party is determined to establish control over the local self-governments; to this end, it has amended the legislation in a way which now undermines local civil initiatives. These changes not only illustrate the interests and political standpoint of the ruling elite; they also result from systemic reasons, and these are deeply rooted in the Soviet past. The present Ukrainian state has evolved through the evolutionary transformation of the Ukrainian Soviet Socialist Republic. As a result, the main features of the previous system have been sustained, including the weakness of the representative bodies and the instrumental use of the law. Twenty years into its independent development, Ukraine has developed a merely formal democracy, which is distant from EU standards.

Azerbaijan-a growing problem for the West. OSW Commentary No. 146, 15.09.2014

Azerbaijan’s cooperation with the West, launched two decades ago, has helped it become a relatively strong and ambitious actor on the international stage. It has become a key country in the region from the Western (USA and the EU) and Turkish points of view, as well as an important partner in the energy sector. The strategic EU concept of the Southern Gas Corridor, also supported by the United States, is among the initiatives based on cooperation with Azerbaijan. Surprisingly, however, Azerbaijan’s increased ambition and importance have caused its policy to diverge ever farther from the expectations and plans formulated by the West. The changes in the balance of power in the South Caucasus, occurring in the context of the conflict in Ukraine, have forced Azerbaijan to revise its assessment of its position in the region. The main impetus for Azerbaijan’s actions is fear of Russia, as well as the weakness of the West which has become particularly apparent in the recent stages of the Ukrainian crisis. Azerbaijan’s actions so far have displayed its tendency to deepen its self-isolation in foreign affairs and consolidate its authoritarian system. This comes as a challenge to the West, whose ability to shape its relations with Azerbaijan has weakened considerably. This state of affairs poses the threat that in the current situation, the Southern Gas Corridor concept, which Azerbaijan amended in 2012 in its own favour, might become totally blocked.

The Central European Predicament. Jean Monnet/Robert Schuman Paper Series Vol. 14 No. 9, May 2014

From Introduction. Central and Eastern Europe (CEE) has experienced a very deep economic and political transformation since the beginning of the nineties. The early years of transition were characterized by big hopes for a quick and successful development. The international community, including the EU and the USA showed interest in the transformation of the region for a number of reasons. From a geopolitical perspective, the transformation was of tremendous importance as it confirmed the end of the cold war and the bipolar global system was replaced first by a unipolar superpower system and later gave way to a multipolar or a new bipolar system. This also signaled the weakness of the Soviet Union (and later Russia), as it was not able to prevent this transformation and was soon mired in a serious and long lasting economic and political crisis that undermined its international position. After the dissolution of the Soviet Union during the nineties Russia remained very weak, both economically and politically. The power vacuum and the transformation in Central Europe made the establishment of a new international economic and security structure possible. The new economic and political pattern that started to develop within the region was based on the liberal market economy model, with the objective of opening up markets and integrating the region into the world economy and the North Atlantic security structure.

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.

Where is the credit crunch in Greece? CEPS Commentary, 6 October 2015

Greek policy-makers like to make the point that their economy cannot recover because of a lack of credit and that this affects exports, in particular. Austerity is an easy explanation for the weakness of domestic demand, argues Daniel Gros in this CEPS Commentary, but it is more difficult to see why Greek exports have stagnated in recent years. The author considers the argument that the Greek economy could not recover via export-led growth because of a credit crunch. The overall availability of credit was higher than GDP, and interest rates remained relatively low. There is some indication of a misallocation of bank credit, but the responsibility for any mistakes in this direction must lie squarely with the government and the Troika, given that the Greek banking system has been under government control since 2012.

The Common Agricultural Policy: The Future of the CAP and why real reform will never happen. EUMA Paper Vol. 6 No. 7, May 2010

This paper sets out to examine the Common Agricultural Policy (CAP) of the European Union from its inception to present day 1. Specifically, this paper seeks to answer the following questions: (1) What long-term effects, if any, did the circumstances surrounding, and leading up to the formation of the CAP have; (2) What have internal and external responses been to the CAP; (3) How has the CAP responded to major events both internally (within the European Union), and externally (internationally); (4) What affect does the recently implemented Lisbon Treaty2 have on the CAP, and (5) What is the future of the CAP and CAP reform? In order to answer these questions this paper begins with the contention that the CAP is in fact the largest and strongest driving force of EU expansion. In support of this proposition, this paper first examines the circumstances and events leading to the creation of the CAP in the European Community. Second, this paper examines what long-term effects the circumstances surrounding the CAP’s inception have had on the policy, particularly calling attention to the disproportionate Franco-German CAP benefits. Third, the paper then examines how the CAP has responded to historical events that have had significant effects on the European community, particularly EU expansion, the implementation of the Lisbon Treaty, and the recent worldwide economic crisis. Finally, this paper examines common criticisms of and conflicts surrounding the CAP, both internally and externally, and argues that CAP reform, at least within the current institutional framework of the European Union, can never truly occur.