Transaction Banking: Respecting its role in the real economy. ECRI Policy Brief No. 6, 6 December 2013

This paper sketches the main features and issues related to recent market developments in global transaction banking (GTB), particularly in trade finance, cash management and correspondent banking. It describes the basic functioning of the GTB, its interaction with global financial markets and related implications of global regulatory developments such as Basel III. The interest in GTB has recently increased, since its low-risk profile, tendency to follow growth rates worldwide and relative independence from other financial instruments became an interesting diversification opportunity both for banks’ business models and for investors. Transaction banking has been a resilient business during the crisis, despite the reduction in world trade figures. In the post crisis period, GTB must cope with new challenges related to increased local and global regulation and the risk of inconsistency in regulatory approaches, which could negatively impact the global network and increased competition by new market entrants. Increased sophistication of corporate clients, as well as the pressure to develop and adopt technological innovations more quickly than other areas of banking continues to impact the business. The future of the industry closely depends on its ability to adjust to complex regulatory developments while at the same time being able to operate a global and efficient network.

REACH: A killer whale for SMEs? CEPS Policy Brief No. 307, 9 December 2013

REACH is a very demanding system for any business either large or small, yet right from the start one of the more serious concerns was whether and how SMEs could cope with the Regulation. After all, some 27,600 companies in EU chemistry are SMEs (95% of all firms). Seven years down the line, many of these fears are materialising. Assuming no significant changes are introduced to REACH, this paper suggests the following recommendations: Above all, we strongly encourage SMEs to start early and develop a strategy for REACH compliance well before 2018. Address the potential competition law implications of current SIEF arrangements, e.g. through a Guidance document from DG Competition by 2014 (in time for 2018) Facilitate the exchange of information along the value chain by adopting pragmatic approach to the content and format of Safety Data Sheets. More can be done on the IT front as well, for instance by developing tools that generate compliant Safety Data Sheets. Improve the communication of REACH and its intended goals, that is, the health and environmental benefits, to the wider public. SMEs regret the unawareness of the public in the light of the enormous efforts they have to undertake. In the event of a later review of REACH, the logic should be risk-based rather than hazard-based.

The Sahel Crisis: Where do European and African Perspectives Meet? IES Policy Brief Issue 2013/02/March 2013

Summary. The crisis in Mali has brought the Sahel to the centre of international attention. This fragile region not only suffers from longstanding development challenges, but also from an acute security vacuum that has triggered military intervention. Many questions have arisen as a consequence of the crisis. Has the European Union the ability to cope with such a complex and dynamically evolving security environment? How have divergent views on the political roadmap to be adopted, and the lack of resources at the African level, impacted the crisis response? Can the different players involved agree on what are the most pertinent needs and challenges to be addressed? Are they ready for long-term engagement? Can regional organisations effectively collaborate and are they able to successfully integrate different agendas? Following a conference organised by the Institute for European Studies, the Egmont Institute and the Observatoire de l’Afrique on these questions this Policy Brief builds on the findings of the conference and provides an analytical overview of the regional crisis by focusing on the main challenges facing the Sahel, the local and regional dynamics at play and the military and security response.

Nagorno-Karabakh and the arc of crises on Europe's borders. EPC Policy Brief, 3 February 2016

For more than two decades, Azerbaijan and Armenia have been locked in a stalemate over the Nagorno-Karabakh. The protracted conflict remains the biggest impediment to security, stability and prosperity in the South Caucasus. The EU has put itself on the sidelines of the conflict resolution process, allowing the Organization for Security and Co-operation in Europe (OSCE) Minsk Group (MG), of which Russia, France and the US are co-chairs, to take centre stage. In this Policy Brief, Amanda Paul and Dennis Sammut argue that the EU should play a more active role in the conflict resolution process, taking the lead with innovative initiatives and using its soft power skills and experience. A recent review of the European Neighbourhood Policy recognises that protracted conflicts continue to hamper development in the region. This new approach now needs to be given substance, before the conflict further escalates and becomes another crisis on Europe’s border the already burdened Union cannot cope with.

China's Confidence Issue: Hard or Smart Landing - What Can We Expect? Asia Policy Brief 2015/03, November 2015

A China whose economy is growing at a slower pace is something the world can cope with. But a China with doubts about whether the government can maintain control and implement reform – that would be a serious problem. The signals currently coming from the economic and political spheres are cause for concern. China is in danger of falling into a downward spiral of declining confidence. What are the consequences for Germany?

An agenda for the European Council: feasible steps to bring the eurozone back from the precipice. CEPS Policy Brief No. 274, 20 June 2012

In the run-up to the emergency European Council meeting at the end of June, Stefano Micossi outlines in this Policy Brief the main elements of a realistic and yet incisive policy package, capable of reassuring financial markets and a bewildered public opinion. It is more than Germany has been willing to accept so far but much less than many of the demands it will confront at the Council meeting. More importantly, it only requires a minimum of additional disbursements by the member states, while strengthening risk-sharing for sovereign and banking risks.

Moving the EU from a Laggard to a Leader in Democracy Assistance: The Potential Role of the European Endowment for Democracy. CEPS Policy Brief No. 273, 15 June 2012

In their assessment of the proposed European Endowment for Democracy (EED), Hrant Kostanyan and Magdalena Nasieniak conclude that an instrument along the lines currently envisaged could and should take on the challenge to make the EU a truly committed, pro-active and effective leader of democracy assistance. A flexible and fast-track path of assessing needs and granting funds could become the most visible results of the EU’s assistance in this area, delivering almost immediate tangible results. They argue that the EED therefore needs to become an instrument free of nationally-driven decisions, European ‘turf wars’ and cumbersome bureaucracy.

Implementing Basel III in Europe: disgnosis and avenues for improvement. CEPS Policy Brief No. 275, 27 June 2012

This Policy Brief provides a preliminary diagnosis of the proposed regulatory reforms contained in the Capital Requirements Directive and Regulation (CRD IV-CRR), which translate into EU law the Basel III standards adopted by the Basel Committee for Banking Supervision, and suggests avenues for improvement. The main criticism is that the proposal is not ambitious enough. In some crucial areas, such as the leverage ratio and the long-term liquidity requirements adopted under the Basel III framework, the CRD IV-CRR proposal stops short of making a strict commitment to introduce binding requirements and instead is contented with weaker (and possibly divergent) disclosure requirements.

Central Banks in Times of Crisis: The FED vs. the ECB. CEPS Policy Brief No. 276, 11 July 2012,

Different economic and financial structures require different crisis responses. Different crises also require different tools and resources. The first ‘stage’ of the financial crisis (2007-09) was similar on both sides of the Atlantic, and the response was also quite similar. The second stage of the crisis is unique to the euro area. Increasing financial disintegration within the region has forced the ECB to become the central counterparty for the entire cross-border banking market and to intervene in the sovereign bond market of some stressed countries. The actions undertaken by the European Central Bank (ECB), however, have not always represented the best response, in terms of effectiveness, consistency and transparency. This is especially true for the Securities Markets Programme (SMP): by de facto imposing its absolute seniority during the Greek PSI (private sector involvement), the ECB has probably killed its future effectiveness.

Pre-empting technical barriers in the Single Market. CEPS Policy Brief No. 277, 11 July 2012

Effective enforcement and compliance with EU law is not just a legal necessity, it is also of economic interest since the potential of the Single Market will be fully exploited. Enforcement barriers generate unjustified costs and hindrances or uncertainty for cross-border business and might deprive consumers from receiving the full benefit of greater choice and/or cheaper offers. The EU has developed several types of enforcement efforts (preventive initiatives, pre-infringement initiatives and formal infringement procedures). More recently, the emphasis has been placed on effective prevention. This CEPS Policy Brief analyses the functioning of one preventive mechanism (the 98/34 Directive) and assesses its potential to detect and prevent technical or other barriers in the course of the last 25 years. Based on an empirical approach, it shows that this amazing mechanism has successfully prevented thousands of new technical barriers from arising in the internal goods market.

Unholy compromise in the eurozone and how to right it. CEPS Policy Brief No. 277, 16 July 2012

This paper reviews the causes of the ongoing crisis in the eurozone and the policies needed to restore stability in financial markets and reassure a bewildered public. Its main message is that the EU will not overcome the crisis until it has a comprehensive and convincing set of policies in place; able to address simultaneously budgetary discipline and the sovereign debt crisis, the banking crisis, adequate liquidity provision by the ECB and dismal growth. The text updates and expands on his Policy Brief contributed in the run-up to the emergency European Council meeting at the end of June.

Can Italy and Spain survive rates of 6-7%? CEPS Policy Brief No. 279, 27 July 2012

The sentiment that the euro is now in real danger is based in large part on the widespread conviction that interest rates of 6-7% are simply unsustainable for both Italy and Spain., After taking a closer look at the fundamentals, however, Daniel Gros concludes in this new Policy Brief that both countries should be able to live with this level of interest rates for quite some time, but only if they mobilize domestic savings, which remain strong in both countries. For Spain, some debt/equity swaps are also needed.

CSDP and NATO Post-Libya: Towards the Rubicon? Egmont Security Policy Brief No. 35, July 2012

In the wake of Libya and the American pivot to Asia, CSDP-NATO relations must be recalibrated. The buzz word for CSDP should be: integrated through the EU and empowered through NATO.

EU Grand Strategy: Optimism is Mandatory. Egmont Security Policy Brief No. 36, July 2012

The Arab Spring, the American pivot, and the global crisis: these affect all of EU external action, but also present opportunities for EU action. A debate on grand strategy remains necessary.