Determinants of Financial Development across the Mediterranean. MEDPRO Technical Report No. 29/February 2013

Casual observation shows that that the financial systems in the southern and eastern Mediterranean are unable (or unwilling) to divert the financial resources that are available to them as funding opportunities to private enterprises. Using a sample of both northern and southern Mediterranean countries for the years 1985 to 2009, this study empirically assesses the reasons underlying such conditions. The results show that strong legal institutions, good democratic governance and adequate implementation of financial reforms can have a substantial positive impact on financial development only when they are present collectively. Moreover, inflation appears to undermine banking development, but less so when the capital account is open. Government debt growth appears to weaken credit growth, which confirms that public debt ‘crowds out’ private debt. Lastly, capital inflows appear to primarily have an income effect, increasing income and thereby national savings, and thus increasing the availability of credit.

Programming EU External Action Post-Lisbon: New Opportunities or Business as Usual?

Over 90% of the external relations budget of the EU is processed through its external financial instruments. With the Lisbon Treaty and the creation of the new European External Action Service (EEAS), the institutional architecture of these instruments was significantly reformed. This contribution analyses strategic programming both pre- and post-Lisbon, identifies ‘winners’ and ‘losers’, and examines the potential of the new provisions to increase the coherence of EU external action. The examination shows that the instruments can be categorised into three groupings: ‘the big three’ comprising the bulk of funding characterised by joint programming and responsibilities; the ‘Commission-only’ instruments where all powers remain with the Commission; and the ‘EEAS-led rest’ in which the High Representative and the EEAS play a strong role but only have limited financial resources available. The new system calls for strong coordination of all involved actors in order to make it work. Findings of a case study on the Instrument for Stability reveal, however, that so far the establishment of the EEAS has not made a substantial impact on strategic programming in its first two years.

Ukraine: sovereign decentralisation or federalism without sovereignty? OSW Commentary No. 133, 18.04.2014

A key element of Russia’s policy towards the new government of Ukraine concerns demands for a constitutional reform that would transform the country from a unitary into a federal state in a way that would considerably privilege the eastern and southern regions. Such a change to Ukraine’s administrative system would enable Moscow to put pressure on Ukraine’s central government via the regions. In order to achieve its objectives, Russia has been pressuring Kyiv to establish a constitutional assembly in a form that would guarantee the endorsement of solutions dictated by Russia. In other words, Russia has been demanding, in what is practically an ultimatum, that Ukraine give up one of the fundamental sovereign rights of a state, the right to freely determine its system of government. Transforming Ukraine into a federal state is an unacceptable idea, primarily because the intention behind Russia’s demands is to undermine Ukraine’s sovereignty, both through the content of the proposed changes and the way in which they are to be implemented. However, keeping in place the current, centralist model of state governance is not a feasible alternative. Ukraine will have to grant its regions broad self-governance powers, including the power to hold local referendums, and to transfer a considerable portion of the prerogatives currently held by the state to the local self-governments, along with adequate financial resources. That is because decentralisation along these lines is the only way forward towards a modern democracy in Ukraine. Russia’s policy has forced Kyiv to undertake legislative work on constitutional reform as a matter of urgency, rather than waiting until a new parliament is elected in which the new, post-Maidan balance of political power will be reflected, as political logic would require. The first draft of the constitutional amendments (of which no details are known at this stage) is to be presented in mid-May, and is expected to come into force in early autumn. However, whether these plans can be put into practice depends on further developments in the eastern part of Ukraine, because (among other reasons) if a state of emergency is introduced, the constitutional amendment process will have to be suspended.

Reforms in Moldova: Moderate progress and an uncertain outlook for the future. OSW Commentary No. 100, 2013-01-22

After coming to power in September 2009, the Alliance for European Integration (AIE)1 coalition began implementing a wide-ranging programme of reforms, with a view to bringing Moldova closer to the European Union, and ultimately to ensure the country’s full membership of the EU. Today, Moldova is considered a clear leader in European integration among the members of the EU’s Eastern Partnership programme. This, however, has less to do with the concrete reforms introduced by the Moldovan government, and more to do with, on the one hand, Chișinău’s excellent public relations with Brussels, achieved through effective diplomacy; and on the other hand, the growing disillusionment with the lack of progress in other Eastern Partnership countries, particularly in Ukraine. Attempts to evaluate Moldova’s reforms have proven rather problematic. On the one hand, the ruling coalition has managed to make significant progress in the areas of civil liberties, human rights and electoral reform. The government has also successfully implemented regulations which have brought Moldova closer to signing a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU, and it has made headway in talks on visa liberalisation with Brussels. On the other hand, Chișinău has still not carried out the structural and economic reforms without which real change in the country will be impossible. No reforms have been introduced in the Ministry of the Interior, the Moldovan police force, or the judiciary. The AIE has also failed to decentralise governance and has had no real success in reducing corruption; its attempts to rebuild the country’s financial institutions have proved equally unsuccessful. The main reasons for this poor performance include mutual mistrust and conflicting interests among the coalition members, a shortage of financial resources, strong resistance to change by public administration staff, and significant pressure from those political and business groups whose interests could suffer as a result of the proposed reforms. It should also be noted that since the AIE took power, the international context of the reform efforts has undergone significant changes. On the one hand, the EU has been facing an economic crisis, which has had a negative impact on Moldovan exports and contributed to the worsening of the economic situation in the country; and on the other hand, Moldova has been offered membership of the Customs Union as a viable alternative to EU membership.

Communication and Campaigning in European Citizens‘ Initiatives. ZEI Discussion Paper 224, 2014

One million signatures from at least seven European Member States: Fulfilling the conditions of the European Citizens’ Initiative requires a communication campaign, which manages to reach and touch the citizens, as well as to encourage them to act. This empirical study analyses, which methods in this regard are successful or rather counterproductive. It comes to the conclusion that a variety of factors are decisive, and that these factors can differ in their manifestation – such as the availability of financial resources, the emotional potential of the issue or a sophisticated network of supporters.

Grenzüberschreitende Zusammenarbeit im Alpenraum: Wechselwirkung zwischen EUSALP und EVTZ? = Transnational cooperation in the Alpine region: interaction between EUSALP and EGTC? EDAP 2/2016

The Treaty of Lisbon (2009) explicitly added - in Article 3 of the Treaty on the European Union (TEU) and Article 174 of the Treaty on the Functioning of the European Union (TFEU) - the principle of territorial cohesion to the already existing principles of social and economic cohesion between the EU Member States. To concretely reach the objective of territorial cohesion, the EU created – on the one hand - the legal instrument of the “European Grouping for Territorial Cooperation” adopted through regulation n. 1082/2006 (EGTC). This allows cross-border cooperation between local and regional authorities. On the other hand, in 2009 a new form of European transnational cooperation has been introduced, the so called Macro Regional Strategy (MRS). This was firstly applied to the Baltic Sea Region in order to give to this cross - border geographical area a coordinated framework in specific policy fields, such as the environment and the infrastructures. Both concepts - EGTC and MRS - are based on the fundamental idea of supporting the territorial and cross - border cooperation between local, regional and national authorities and other stakeholders. Despite this common aspect, the two instruments differ profoundly in terms of form, structure and content. While the MRS is to be considered as a political integrated framework without its own financial resources, the instrument of the EGTC is based on a stable legal basis. To this extent, the alpine region - a large geographic area in the heart of Europe with a longstanding tradition in crossborder cooperation - represents an interesting practical example with regard to the implementation of these two forms of cooperation across borders. In fact, the countries and regions in the Alpine area are unified through the Alps and face, therefore, common challenges: that is why this “region” is ideally suited to be the ground for experiments regarding transnational tools and strategies.

Europe cannot afford people in bad health - Economics of health and care as a guide for investments. EPC Commentary, 4 July 2016

It is widely accepted that a new way of looking at Europe’s health sector is necessary if we are to maintain universal health coverage. Financial resources are limited, and the sustainability of Europe’s health systems is under threat. Economic growth is slow, health expenditures outpace GDP growth, public budgets are under strain and demographics – with a growing aging population – are putting pressure on the younger tax-paying generations. In an effort to ensure the sustainability of Europe’s health systems, reforms, underpinned by a new understanding of the economic value of health for individuals and society is needed.