Electricity without borders: a plan to make the internal market work. Bruegel Blueprint Series 20, 5 September 2013

The most straightforward European single energy market design would entail a European system operator regulated by a single European regulator. This would ensure the predictable development of rules for the entire EU, significantly reducing regulatory uncertainty for electricity sector investments. But such a first-best market design is unlikely to be politically realistic in the European context for three reasons. First, the necessary changes compared to the current situation are substantial and would produce significant redistributive effects. Second, a European solution would deprive member states of the ability to manage their energy systems nationally. And third, a single European solution might fall short of being well-tailored to consumers’ preferences, which differ substantially across the EU. To nevertheless reap significant benefits from an integrated European electricity market, we propose the following blueprint: First, we suggest adding a European system-management layer to complement national operation centres and help them to better exchange information about the status of the system, expected changes and planned modifications. The ultimate aim should be to transfer the day-to-day responsibility for the safe and economic operation of the system to the European control centre. To further increase efficiency, electricity prices should be allowed to differ between all network points between and within countries. This would enable throughput of electricity through national and international lines to be safely increased without any major investments in infrastructure. Second, to ensure the consistency of national network plans and to ensure that they contribute to providing the infrastructure for a functioning single market, the role of the European ten year network development plan (TYNDP) needs to be upgraded by obliging national regulators to only approve projects planned at European level unless they can prove that deviations are beneficial. This boosted role of the TYNDP would need to be underpinned by resolving the issues of conflicting interests and information asymmetry. Therefore, the network planning process should be opened to all affected stakeholders (generators, network owners and operators, consumers, residents and others) and enable the European Agency for the Cooperation of Energy Regulators (ACER) to act as a welfare-maximising referee. An ultimate political decision by the European Parliament on the entire plan will open a negotiation process around selecting alternatives and agreeing compensation. This ensures that all stakeholders have an interest in guaranteeing a certain degree of balance of interest in the earlier stages. In fact, transparent planning, early stakeholder involvement and democratic legitimisation are well suited for minimising as much as possible local opposition to new lines. Third, sharing the cost of network investments in Europe is a critical issue. One reason is that so far even the most sophisticated models have been unable to identify the individual long-term net benefit in an uncertain environment. A workable compromise to finance new network investments would consist of three components: (i) all easily attributable cost should be levied on the responsible party; (ii) all network users that sit at nodes that are expected to receive more imports through a line extension should be obliged to pay a share of the line extension cost through their network charges; (iii) the rest of the cost is socialised to all consumers. Such a cost-distribution scheme will involve some intra-European redistribution from the well-developed countries (infrastructure-wise) to those that are catching up. However, such a scheme would perform this redistribution in a much more efficient way than the Connecting Europe Facility’s ad-hoc disbursements to politically chosen projects, because it would provide the infrastructure that is really needed.

MIGRATION PANORAMA. Schengen in the spotlight: a Europe with or without borders? APRIL 2016 (First edition)

The first edition of this new multi-authored publication entitled ‘Migration Panorama’ focuses on the consequences of the refugee and migration crisis on the Schengen area and the concept of a borderless union. Several external and EPC authors have contributed to building a comprehensive picture on the manifold challenges and possible consequences of maintaining and/or returning to internal border controls among Schengen countries. How does a signatory of the Schengen agreement see the current developments? What would be the impact of the reintroduction of physical borders on Europe’s digital economy? In what way do the V4 countries envisage to solve the ‘Schengen crisis’? How dangerous are the empty threats to expel Greece out of the Schengen area? What is the symbolic meaning of the Belgian border controls following the French decision to dismantle parts of the Calais ‘jungle’? Is saving Schengen only a question of national sovereignty or a matter of shared European responsibility? All these questions and many others are tackled in this first issue of the ‘Migration Panorama’ produced by EPC’ s Migration and Diversity Programme.

Can Schengen survive? CEPS Commentary, 14 December 2015

Against the background of Europe's refugee crisis, not to mention last month's terrorist attacks in Paris, Daniel Gros acknowledges in this Commentary that the core principle of a "Europe without borders" has come under serious attack. He exhorts member states to realise that they can be more secure without sacrificing liberty if they create a common institution to guard the external borders and reinforce the existing framework for internal security.

Introducing more equity in the CAP: a difficult challenge. Egmont Paper #55, June 2012

[From the Introduction]. The main question addressed by this paper is how to reach a more equitable distribution of CAP’s payments pragmatically, politically and economically? Pragmatically, the CAP is a multi-functional policy, which has to combine different goals, i.e. to be more equitable, green and market-oriented. However, these objectives are not always compatible and require trade-offs. Politically, regarding the CAP’s significant share (40%) of the EU budget and the current public debt crisis, Member States are most likely to keep their attention on the juste retour calculations rather than the promotion of the European public interest in the EU negotiations. Economically, reaching a more equitable distribution of payments should be achieved without significant disruptive changes that could have serious consequences on the costs and benefits of the agricultural sector in the EU. Considering these elements, it is already clear that reaching a more equitable distribution of CAP’s payments represents a difficult challenge.

How far do the borders of the west extend? Russian/Polish strategic conflicts in the period 1990-2010. OSW Report, 2010-03-18

From a historical perspective, the last two decades can almost be regarded as a 'golden age' of Polish-Russian relations. This is the first time in several centuries that a sovereign Poland and Russia have been able to develop mutual relations without resorting to force; moreover, they have established a bilateral legal basis and put into practice its provisions on "the inviolability of borders, territorial integrity, non-interference with internal affairs and the nations' right to self-determination. This does not change the fact that since 1990 the atmosphere between the two countries has much more often been chilly and tense. Contrary to the widely-held belief, Polish-Russian conflicts do not stem from genetic Russophobia on the part of Poland, or irrational prejudice on the part of Russia. Their substance is real and concerns strategic issues. At the deepest level, though, this is a dispute about how far the borders of the Western world extend, and about the Russian Federation's sphere of influence. However, it is not a clash between two states; moreover, Poland is certainly not the most important actor in this regard, although due to the historical context and its geographic location, it is one of the countries that lies closest to the 'line of contact', and is therefore particularly entangled in the disagreement.

The growth challenge for Europe and the EMU. CHALLENGE EUROPE Issue 22- Challenges and new beginnings: Priorities for the EU's new leadership, September 2014.

The European economy is slowly and painfully striving to reemerge from the last six years of crisis. It was a crisis of enormous intensity and contagiousness, given the unprecedented depth of global financial integration combined with the systemic flaws in the EMU architecture. And it is not over, as the high levels of unemployment and the growing divergence between Member States testify. The threat of fragmentation is imminent as ever: fragmentation between euro-ins and euro-outs; fragmentation between North and South; fragmentation within societies, with increasing income inequality and a growing number of, what used to be, the middle class population slipping through the social safety net and below poverty lines. Policies of front-loaded fiscal consolidation have left welfare states in economically weaker countries severely underfunded. According to OECD data, the number of people living in households without any income from work has doubled in Greece, Ireland and Spain, and has risen by 20% or more in Estonia, Italy, Latvia, Portugal, and Slovenia. Fertility rates have dropped further since the crisis, deepening the demographic and fiscal challenges of ageing. There are long-term implications from these deteriorating trends, regarding people's long-term health, education and upward mobility from low-income families. It is also highly likely that many of the people unemployed for a long period of time will never again be able to gain proper access to the job market and build a normal career track. The enduring effects of the crisis risk creating vicious cycles of low growth, high debt levels, austerity, declining productivity, and stagnation. These developments carry heavy implications for the future growth prospects of the European economies, for future prosperity, and for the sustainability of pension systems and welfare states. They must be urgently reversed.

What is happening to the Schengen borders? CEPS Liberty and Security in Europe No. 86, December 2015

What is happening to the Schengen borders? Is Schengen in ‘crisis’? This paper examines the state of play in the Schengen system in light of the developments during 2015. It critically examines the assertion that Schengen is ‘in crisis’ and seeks to set the record straight on what has been happening to the intra-Schengen border-free and common external borders system. The paper argues that Schengen is here to stay and that reports about the reintroduction of internal border checks are exaggerated as they are in full compliance with the EU rule of law model laid down in the Schengen Borders Code and subject to scrutiny by the European Commission. It also examines the legal challenges inherent to police checks within the internal border areas as having an equivalent effect to border checks as well as the newly adopted proposal for a European Border and Coast Guard system. The analysis shows that the most far-reaching challenge to the current and future configurations of EU border policies relates to ensuring that they are in full compliance with fundamental human rights obligations to refugees, effective accountability and independent monitoring of the implementation of EU legal standards. This should be accompanied by a transparent and informed discussion on which ‘Schengen’ and which 'common European Border and Coast Guard Agency' we exactly want within current democratic rule of law and fundamental rights remits.