What can the Better Regulation Commissioner do for the EU? CEPS Commentary, 29 September 2014

This commentary welcomes the creation and prominence given by President Juncker to the new post of First Vice-President in charge of Better Regulation, Inter-Institutional Relations, the Rule of Law and the Charter of Fundamental Rights as among the most interesting of several novelties contained in the proposed Commission and overdue. After all, as the authors point out, better regulation has been underpinning the Commission’s core business, namely, EU regulation, for over a decade. At the same time, however, they warn that Commissioner-designate Frans Timmermans is receiving an extremely challenging mandate which pose many difficulties to overcome.

The Juncker Commission: A New Start for EU Justice and Home Affairs Policy? CEPS Essay No. 15, 18 September 2014

The team comprising Jean-Claude Juncker’s Commission was revealed on 10 September 2014: does it herald a new start for Justice and Home Affairs (JHA) cooperation in the EU? This essay outlines the main structural and thematic changes introduced by the new Commission, in particular those with direct or indirect relevance to EU JHA or the Area of Freedom, Security and Justice (AFSJ) policies. It also reflects on the new institutional configuration and what it means for the substantive work of the new Commission services and for their intra- and inter-institutional relations. The essay concludes with a set of proposed policy priorities for the new Commission.

The European Commission and International Trade Negotiations: A Principal-Agent Approach. IES WORKING PAPER 2/2011

Starting from the concept of delegation of power in external trade policy, this paper aims to investigate the dynamics surrounding the European Union’s position in international trade negotiations. The analysis centres on the role of the European Commission (the agent), which by means of Treaty-based delegation and as mandated by the Council (the principal) acts as the sole trade negotiator in the international sphere on behalf of the European Union (EU). The broader negotiating process is thus conceptualised as a threelevel game, where the Commission holds an intermediary position between the European and international levels and also interacts with the Member States in the Council. After an insight into the European decision-making process for external trade, the paper further analyses the Commission’s role during the multilateral trade negotiations of the Doha Development Round. By applying the principal-agent theory to international trade negotiations in general, and subsequently to the controversial agricultural negotiations, this paper seeks to investigate some of the potential sources of autonomy that the Commission can draw upon while upholding an EU position at the international level, in addition to the “hardball” job of balancing the interests of the Member States with those of World Trade Organisation (WTO) partners. Along these lines, the paper finally aims to contribute to the literature concerning agency autonomy in EU external trade relations but also to provide a better understanding of inter-institutional relations within the EU as they may unfold in practice.

Saving the Banks: The Political Economy of Bailouts. CES Papers - Open Forum #8, 2012

How much leeway did governments have in designing bank bailouts and deciding on the height of intervention during the 2007-2009 financial crisis? This paper analyzes comparatively what explains government responses to banking crises. Why does the type of intervention during financial crises vary to such a great extent across countries? By analyzing the variety of bailouts in Europe and North America, we will show that the strategies governments use to cope with the instability of financial markets does not depend on economic conditions alone. Rather, they take root in the institutional and political setting of each country and vary in particular according to the different types of business-government relations banks were able to entertain with public decision-makers. Still, “crony capitalism” accounts overstate the role of bank lobbying. With four case studies of the Irish, Danish, British and French bank bailout, we show that countries with close one-on-one relationships between policy-makers and bank management tended to develop unbalanced bailout packages, while countries where banks have strong interbank ties and collective negotiation capacity were able to develop solutions with a greater burden sharing from private institutions.

Could European Governance Ideas Improve Federal-provincial Relations in Canada? EDAP 6/2013

Over the past seventeen years Canada has decentralized many social programmes, moving responsibility from the federal government to 13 provinces and territories through bilateral federal-provincial agreements. In contrast, the European Union (EU) has moved in the opposite direction, building pan-European approaches and establishing new processes to facilitate multilateral collaboration among the 28 EU member states. This has been done through a new governance approach called the Open Method of Coordination (OMC). Using a detailed case study − employment policy − this paper explores whether Canada could learn from OMC governance ideas to re-build a pan-Canadian dimension to employment policy and improve the performance of its intergovernmental relations system. Concrete lessons for Canada to improve decentralized governance are suggested: consolidating the different bilateral agreements; using benchmarking instead of controls in fiscal transfers; undertaking research, analysis, and comparisons in order to facilitate mutual learning; revitalizing intergovernmental structures in light of devolution; and engaging social partners, civil society and other stakeholders. Post-devolution Canada is not doing badly in managing employment policy, but could do better. Looking to the EU for ideas on new ways to collaborate provides a chance for setting a forward looking agenda that could ultimately result not only in better labour market outcomes, but also improvements to one small part of Canada’s often fractious federation.

Federation without federalism. Relations between Moscow and the regions. OSW Study 49/2014

The regions of the Russian Federation are immensely diverse economically and geographically as well as when it comes to their national identity, civic awareness and political activity. We are in fact dealing with a ‘multi-speed Russia’: along with the post-industrial regions with their higher living standards and a need for pluralism in politics, there are poverty-stricken, inertial regions, dependent on subsidies from the centre. As a result of the policy of centralisation pursued by the Kremlin since 2000, the autonomy of the regions has been reduced fundamentally. This has affected the performance of the regional elites and made it difficult for the regions to use their natural advantages (such as resources or location) to their benefit. One of the effects of this policy has been the constantly decreasing number of the donor regions. The current model promotes the role of the region as a passive supplicant, for whom it is easier to seek support from the central government, offering loyalty in exchange, than to implement complex systemic reforms that would contribute to long-term development. Moscow’s control (political, economic and administrative) over the regions is currently so thorough that it contradicts the formally existing federal form of government in Russia.

Under the veneer of decentralisation. Ukraine's modernisation efforts stall due to lack of local government reform. OSW Commentary No. 102, 2013-02-12

President Viktor Yanukovych and his Party of Regions have been repeating the pledge to decentralise power in Ukraine and to give local government a greater decision-making role ever since the party appeared on the Ukrainian political scene. The implementation of this reform is crucial both for the economic recovery of Ukraine’s regions and the overall modernisation efforts of the Ukrainian state. At present relations between central government and the regions are regulated by Soviet-era legislation that fails to address the modern-day challenges facing Ukraine. The political elite in the country, including the opposition, appear to have reached consensus on the importance of the decentralisation reform. The first attempts to implement changes in this area were made in the late 1990s, followed by a comprehensive reform programme developed between 2007 and 2009 by Yulia Tymoshenko’s government. In 2012, the Constitutional Assembly under the President of Ukraine appointed a team of experts who drafted a document detailing the reform of local government and the territorial organisation of power1. The document envisages the implementation of what effectively are two major reforms: (1) an administrative-territorial reform, which would help consolidate the fragmented administrative structure, creating larger and more economically self-sufficient administrative units, and (2) local government reform, focusing on creating clearly defined powers for local authorities with a view to securing government funding for specific tasks delegated from central government. Nonetheless, despite these measures, and in spite of the rhetoric coming from President Yanukovych and other members of the Party of Regions, it seems unlikely that the reform will be implemented in the foreseeable future. A series of concrete political decisions taken by the president over the past three years indicate that Yanukovych has not abandoned his plan to build a highly centralised political system. This in turn limits the capacity to govern of local authorities and further restricts the sources of funding for Ukraine’s regions. This apparent resistance to change stems from the fact that by implementing the proposed reforms, the president and his political allies would be forced to relinquish much of their control over the political processes taking place in the country and would have to free up the distribution of budgetary resources between Kyiv and the regions. The implementation of the reform within the specified timeframe (i.e. by 2015) is also unlikely due to the upcoming presidential election and the deteriorating economic situation in Ukraine. Without a comprehensive reform of local government, however, Ukraine will be unable to undertake effective modernisation measures, which are key for the socio-economic development of the country’s regions.

No other choice but co-operation. The background of Lithuania's and Latvia's relations with Belarus. OSW Commentary No. 99, 2013-01-04

For years now Belarus has been a key economic partner for Lithuania and Latvia. These two Baltic states have well-developed port infrastructure and thus provide what are the geographically closest and also the cheapest exit to international outlets for Belarusia’s petrochemical and chemical industries, both of which are export-oriented. As a result, the transit of Belarusian goods is one of the major sources of income for the state budgets of the two countries. This economic interdependence has affected the stance Riga and Vilnius take on Minsk at the EU forum. When in February and March 2012 the Council of the European Union was resolving the issue of imposing economic sanction on selected Belarusian companies which backed Alyaksandr Lukashenka’s regime, this triggered a discussion on what the point of such measures is and on possible economic losses in Lithuania and Latvia. As a result of firm resistance from Latvia (which was backed by Slovenia), the Council removed those companies which were most strongly engaged in co-operation with Latvian partners from the list of those to be covered with economic sanctions. Lithuania, which is more critical of the political situation in Belarus, did not express its official opposition to the sanctions. Despite some differences in the policies adopted by Riga and Vilnius, it turned out that Minsk could count on strong support from local business groups in both of these countries, as these groups fear impediments in this highly profitable co-operation and also retaliation from the Belarusian government. The existing economic bonds mean that neither Vilnius nor Riga have any other choice but to co-operate with Belarus. They must therefore adopt a carefully balanced policy towards Minsk. At the same time, being EU member states, they do not officially deny that a problem exists with the violation of human rights by Alyaksandr Lukashenka’s regime. It is for this reason that the governments of Latvia and Lithuania will be interested in maintaining the status quo in relations with Minsk. On the other hand, Belarus in a way also has no other choice but to use the ports in Lithuania and Latvia, and this will prevent it from excessively escalating tension in relations with these two countries.