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.

How to deal with macroeconomic imbalances? CEPS Special Report No. 69, 23 November 2012

Lax financial conditions can foster credit booms. The global credit boom of the last decade led to large capital flows across the world, including large movements of resources from the northern countries of the euro area towards the southern part. Since the start of the crisis and more markedly after 2009, these flows have suddenly stopped, creating severe adjustment pressure. At this point the common monetary policy can only try to mitigate the unavoidable adjustment by maintaining overall financial stability. The challenge is to strike a delicate balance between providing liquidity for solvent institutions while keeping the overall pressure on for a rapid correction of the imbalances.

How to avoid a double-dip recession in the eurozone. CEPS Commentary, 15 November 2012

This CEPS Commentary argues that the way in which the burden of adjustment to the imbalances in the eurozone is borne almost exclusively by the deficit countries in the periphery produces a deflationary bias in the region as a whole. Against the threat of double-dip recession, Paul De Grauwe asserts that the adjustment could be done differently and calls for implementation of a more symmetric macroeconomic policy that reduces the deflationary bias.

How to withdraw from the European Union? Confronting hard reality. CEPS Commentary, 16 January 2013

As David Cameron prepares to deliver his momentous “Europe” speech, Adam Łazowski warns the British Prime Minister that a divorce from the EU will not be easy and that the decision should be based on a very thorough political, economic and legal analysis, as the consequences in all possible respects will be profound.

Net Neutrality and Mandatory Network-Sharing: How to disconnect the continent. CEPS Policy Brief No. 309, 18 December 2013

A lively debate emerged on the proposed “Connected Continent” legislative package presented by the European Commission in September 2013. The package contains a proposed rule on the ‘open Internet’, which was heavily discussed in European Parliament hearings in early December. This commentary argues that while the proposed rule is in principle balanced and appealing, it is utterly impractical due to the enormous uncertainty that its application would entail. At the same time, the rule is very far from what neutrality proponents have argued for almost a decade: rather than the place for internet freedom, it would transform the Web into a place requiring constant micro-management and tutoring of user behaviour. Both arguments lead to the conclusion that the current proposal should be at once reformed and analysed under a more holistic lens. On the one hand, Europe should launch an ambitious project for the future, converged infrastructure by mobilising resources and reforming rules to encourage investment into ubiquitous, converged, ‘always on’ connectivity. On the other hand, enhanced legal certainty for broadband investment could justify a more neutrality-oriented approach to traffic management practices on the Internet. The author proposes a new approach to Internet regulation which, altogether, will lead to a more balanced and sustainable model for the future, without jeopardising user freedom.

When and how to support renewables? Letting the data speak. Bruegel Working Paper 2014/01, February 2014

Low-carbon energy technologies are pivotal for decarbonising our economies up to 2050 while ensuring secure and affordable energy. Consequently, innovation that reduces the cost of low-carbon energy would play an important role in reducing transition costs. We assess the two most prominent innovation policy instruments (i) public research, development and demonstration (RD&D) subsidies and (ii) public deployment policies. Our results indicate that both deployment and RD&D coincide with increasing knowledge generation and the improved competitiveness of renewable energy technologies. We find that both support schemes together have a greater effect that they would individually, that RD&D support is unsurprisingly more effective in driving patents and that timing matters. Current wind deployment based on past wind RD&D spending coincides best with wind patenting. If we look into competitiveness we find a similar picture, with the greatest effect coming from deployment. Finally, we find significant cross-border effects, especially for winddeployment. Increased deployment in one country coincides with increased patenting in nearby countries. Based on our findings we argue that both deployment and RD&D support are needed to create innovation in renewable energy technologies. However, we worry that current support is unbalanced. Public spending on deployment has been two orders of magnitude larger (in 2010 about €48 billion in the five largest EU countries in 2010) than spending on RD&D support (about €315 million). Consequently, basing the policy mix more on empirical evidence could increase the efficiency of innovation policy targeted towards renewable energy technologies.

How to keep a competitive edge in the talent game: Lessons for the EU from China and the US. CEPS Task Force Report, 13 June 2014

This report is based on discussions within the CEPS Task Force on “The Quantity and Quality of Human Capital in Higher Education: Comparing the EU, the US and China", chaired by Jan-Eric Sundgren, Senior Adviser to the CEO of Volvo, and former President of Chalmers University of Technology in Gothenburg. It aims to draw salient lessons from the successes and failures in higher education practices in the EU, the US and China by comparing key education indicators and policy trends. Against the background of the profound tectonic shifts affecting the talent distribution around the world, which is fundamentally changing the global ‘brain game’, the authors argue that it is important that the EU as a whole creates ‘virtuous circles’ of talent and innovation to sustain prosperity and growth, as well as to secure the long-term well-being and quality of life in Europe.

How to deal with quasi-loss of nationality situations? Learning from promising practices. CEPS Liberty and Security in Europe No. 71/December 2014

This paper was prepared as a Policy Brief for discussion at the final conference of the project on Involuntary Loss of European Citizenship: Exchanging Knowledge and Identifying Guidelines for Europe, 11-12 December 2014. Co-funded by the European Commission’s DG for Justice, Citizenship and Fundamental Rights, the ILEC project has aimed to establish a framework for debate on international norms on involuntary loss of nationality. For more information visit: www.ilecproject.eu.

Tunisia. Supervising Tunisian Elections by civil society: How to improve it? Arab Citizenship Review No. 7. January 2015

Introduction. On October 26, 2014, Tunisia held its second democratic legislative elections. Participation among more than 5 million registered voters was at about 60%, a relatively good turnout for the country, compared to the 52% voters in 2011. Preliminary results for the 33 constituencies (27 within the country and 6 for expatriates) reveal that secular frontrunner Nidaa Tounes (Call of Tunisia) won around 37% percent of votes while moderate Islamist party Ennahdha, winner of the 2011 elections and leader of Tunisia’s post-revolution government, received 27% of votes. Other parties with notable percentages are the Free Patriotic Union (French: UPL) with 4.4% and the leftist party, Popular Front, with 3.7%. Legislative were immediately followed by two round presidential elections the first one held on November 23, the second one after one month. Conversely to what was expected, people were more attracted by presidential elections even though president has notably less prerogatives than the parliament: representing the state, he is mainly responsible for determining the general state policies in the domains of defense, foreign relations and national security (article 76.) This paradox is ascribed to national imaginary more confident in a “Zaïm” (leader) rather than a collective institution such as a parliament. The turnout was at about 64% within the national 27 constituencies. Out of 70 candidates (including 5 female), 27 (with only one female) met the legal requirements to run for the presidency. The result confirms the legislative trend and Beji Caid Essebsi, leader of Nidaa, was proclaimed the third President of Tunisia. He gained 39.46% of the votes at the first round elections. Essebsi was followed by Moncef Marzouki who received an unexpected score (33.43%) at the first round, thanks to the support of Ennahdha audience and to an active and insistent campaign focused on the idea that revolution is threatened by old regime guard “come-back.” Rewarded for his long militant live, the extreme leftist Hamma Hammami in a new look gained 7,8% of the votes while the new comer Slim Riahi received 5,5% despite rumors circulating on his personal reputation. Notably, Kalthoum Kennou gained 0,55% (18.287 votes) but listed eleventh out of 27.

The sovereign debt crisis that isn't: Or, How to turn a lending crisis into a spending crisis and pocket the spread. ACES Cases No. 2014.1

It’s a testament to the power of ideas in politics that the ongoing policy disaster in Europe is still referred to, by academic as well as popular commentators, as the European Sovereign Debt Crisis. That there was a crisis in European sovereign debt markets in 2010 through the middle of 2012 is not in doubt. That is was a crisis of European sovereign debt markets generated by ‘too much spending’ should be very much in doubt. The ongoing European economic crisis is in fact a transmuted private sector banking crisis first exacerbated and then calmed by central bank policy, the costs of which have been asymmetrically distributed across European mass publics.

The European Union Multiannual Financial Framework 2014-2020: How to do more for less? IES Policy Brief Issue 2013/05 • May 2013

The European Council meeting on 7 and 8 February 2013 attracted an unusual level of attention from media and citizens. For a couple of days, Europe played a more important role in national politics and news. Sensation-frenzied media and excited politicians spouted notions of ‘a battle’, ‘winners’, ‘losers’ or ‘striking deals’, as if Europe had gone back to the time when its military powers still conflicted. After more than 24 hours of intense negotiations, the respective Member States leaders left Brussels with ‘good news’ for their citizens. However, those with more Euro-federalist feelings were left with a sense of non-accomplishment and missed opportunities, not only because the EU budget for the first time in history was set for a net decrease, but also because the European Council’s conclusions did not contain any ground-breaking changes to this system. Nevertheless, the European Parliament (EP) immediately reminded Europe about its role and outlined its conditions for further negotiations. Thus, the supporters of a modern and stronger EU budget still see a chance in the consent procedure and hope to shift the focus of the debate from the juste retour spirit to the consideration of the European common good. Is there still a chance for such a shift? What issues are at stake?

Euro-area governance: what to reform and how to do it. Bruegel Policy Brief 2015/01 February 2015

The Issue Reform of the governance of the euro area is being held back by disagreement on what is at the root of the euro area’s woes. Pre-crisis, the euro area suffered from the built-up of financial imbalances, price and wage divergence and an insufficient focus on debt sustainability. During the crisis, the main problems were slow resolution of banking problems, an inadequate fiscal policy stance in 2011-13 for the area as a whole, insufficient domestic demand in surplus countries and slow progress with structural reforms to overcome past divergences. Policy Challenge Euro-area governance needs to move beyond the improvements brought about by banking union and should establish institutions to prevent divergences of wages from productivity. We propose the creation of a European Competitiveness Council composed of national competitiveness councils, and the creation of a Eurosystem of Fiscal Policy (EFP) with two goals: fiscal debt sustainability and an adequate area-wide fiscal position. The EFP should have the right in exceptional circumstances to declare national deficits unlawful and to be able to force parliaments to borrow more so that the euro-area fiscal stance is appropriate. A euro-area chamber of the European Parliament would have to approve such decisions. No additional risk-sharing would be introduced. In the short term, domestic demand needs to be increased in surplus countries, while in deficit countries, structural reform needs to reduce past divergences.