EPC Special Collection. Juncker’s Investment Package: essential background reading, 27 November 2014. Collection of papers recently published by the European Policy Centre reflecting on current social, political and economic affairs

This special collection combines the latest publications written by our experts on Europe's investment future. In chronological order, this package follows the developments of how European investment has been dealt with, and what would be needed to make for a more ambitious plan.

Services in European Policies. Bruges European Economic Policy (BEEP) Briefing 16/2007

This paper’s objective is twofold. Firstly, it presents the case for services-related policies in the current European Union (EU). The services economy is frequently misunderstood, due to old and new myths that stem from the classic economic tradition. These myths obscure the role of the services economy in economic development. Nonetheless, the European services economy faces specific problems, such as lack of market integration, which amplifies arguments that justify policy actions toward services within a framework where market and systemic failures do apply. Secondly, this paper focuses on existing services-policies at the EU level, paying special attention to the internal market for services policies and to the complementary role of primarily non-regulatory policies. Within a comprehensive policy framework, each individual policy will have a higher impact, improved implementation and easier acceptance. Synergies among services-related policies should be promoted; the internal market policies, enterprise and industrial policies, competition policies and regional policies may take the lead in such a framework. Since the Lisbon Strategy, services have begun to gain recognition in EU policy agendas. This paper attempts to increase their visibility and to highlight their crucial role in European integration and in economic growth and social welfare.

Telecommunications and Internet Services: The digital side of the TTIP. Paper No. 8 in the CEPS-CTR project ‘TTIP in the Balance’ and CEPS Special Report No. 112/July, 17 July 2015

In the overall negotiations on the Transatlantic Trade and Investment Partnership (TTIP), the digital chapter appears to be growing in importance. This is due to several factors, including the recent Datagate scandal that undermined trust between the negotiating parties and led to calls to suspend the US-EU Safe Harbour agreement as well as the furious debate currently ongoing in both legal systems on key issues such as policies to encourage broadband infrastructure deployment, network neutrality policies and the application of competition policy in cyberspace. This paper explores the current divergences between the two legal systems on these key issues and discusses possible scenarios for the ultimate agreement to be reached in the TTIP: from a basic, minimal agreement (which would essentially include e-labelling and e-accessibility measures) to more ambitious scenarios on network neutrality, competition rules, privacy and interoperability measures.

The grand divergence: global and European current account surpluses. Bruegel Working Paper 2015/08, 13 August 2015

Global current account imbalances widened before the 2007/2008 crisis and have narrowed since. While the post-crisis adjustment of European current account deficits was in line with global developments (though more forceful), European current account surpluses defied global trends and increased. We use panel econometric models to analyse the determinants of medium-term current account balances. Our results confirm that higher fiscal balances, higher GDP per capita, more rapidly aging populations, larger net foreign assets, larger oil rents and better legal systems increase the medium-term current account balance, while a larger growth differential and a higher old-age dependency ratio reduce it. European current account surpluses became excessive during the past twelve years according to our estimates, while they were in line with model predictions in the preceding three decades. Generally, the gap between the actual current account and its fitted value in the model has a strong predictive power for future current account changes. Excess deficits adjust more forcefully than excess surpluses. However, in the 2004-07 period, excess imbalances were amplified, which was followed by a forceful correction in 2008-15, with the exception of European surpluses.

The Drivers of Current Account Surplus in Germany and the Politics of Rebalancing in the Eurozone. EU Centre, Singapore Working Paper No. 24, April 2015

Current account deficits have caught the public’s attention as they have contributed to the European debt crisis. However, surpluses also constitute an issue as a deficit in any country must be financed through a surplus in another country. In 2013, Germany, now the world’s largest surplus economy, registered a record high US$273 billion surplus. This paper looks at what accounts for Germany’s surplus, revealing that the major driving factors include strong global demand for quality German exports, domestic wage restraint, an undervalued single currency, high domestic savings rate and interest rate convergence in the euro area. This paper echoes the US Treasury’s view that a persistent German surplus makes it harder for the eurozone as a whole and the southern peripheral economies in particular to recover from the current financial crisis by imposing a Europe-wide “deflationary bias” through pushing up the exchange rate of the euro, exporting feeble German inflation and projecting its ultra-tight macroeconomic policies onto crisis economies. This paper contends that Germany’s trade surplus is likely to endure as Germany and other eurozone countries uphold diverging views on the nature of the surplus engage in a blame-game amidst a sluggish rebalancing process. Prizing the surplus as a reflection of hard work and economic competitiveness, German authorities urge their southern eurozone colleagues to undertake bold structural reforms to correct the imbalance, while the hand-tied governments in crisis-stricken economies call on Germany to do its “homework” by boosting German demands for European goods and services.

The Digital Market for Local Services: A one-night stand for workers? An example from the on-demand economy. CEPS Special Report, No. 133/April 2016

This case study provides a snapshot of the dynamics in the digital market for locally provided personal services. Based on a case study for a Belgium platform with 14,113 identified workers and 9,459 posted tasks, the findings suggest that the current intermediation is inefficient. Only a limited share of the tasks posted on the platform are being completed, whereas the characteristics of the not-completed tasks are fairly limited. Moreover, just a small share of the workers participating in the platform is actually performing the completed tasks. Their average earnings per hour are in most cases above the minimum wage and even above the median wage in the offline market. At the present time, however, the limited earnings for individual workers prevent this mode of working from becoming an alternative to a conventional job. In addition to the standard determinants of workers’ earnings (e.g. gender, age, occupation, etc.), the characteristics and evaluation mechanism of the platform have a large influence on the distribution of tasks and earnings.