A Copernican Turn for Banking Union. CEPS Policy Brief No. 290, 14 May 2013

Despite apparent consensus that the creation of a ‘Banking Union’ is essential for the survival of the euro, progress is painfully slow. The Single Supervisory Mechanism may not be ready before the middle of next year, the Single Resolution Mechanism may require a laborious change of the EU Treaty and common deposit insurance has been postponed into the indefinite future. Any real progress has been prevented by the protracted fights over which government will be the payer of last resort when banks fail because of past bad loans. In this Policy Brief, Thomas Mayer suggests that a radically new approach is needed if there is any prospect of moving beyond this impasse to reach full Banking Union. Instead of trying to move from common bank supervision over to resolution and then on to deposit insurance, he argues that policy-makers should go backwards and start with deposit insurance, move from there to resolution, and end with supervision.

A Copernican turn in Banking Union urgently needed. CEPS Policy Brief No. 297, July 2013 [is another Brief with no. 297]

Despite broad agreement among central bankers, policy-makers and economists that creation of a ‘Banking Union’ is essential for the survival of the euro, progress in building this union has been painfully slow. This is largely due to the protracted fights over which government will be the payer of last resort when banks fail because of bad loans made in the past. Taking a cue from Copernicus, Thomas Mayer suggests in this new CEPS Policy Brief that the impasse may be broken by turning the whole process on its head. So, instead of trying to move from common bank supervision, over to bank resolution and then on to deposit insurance, he proposes reversing the process by starting with deposit insurance, moving from there to resolution and ending with supervision.

Reshaping politics of the left and centre in Greece after the 2014 EP election. EPIN Commentary No. 21/10 September 2014

The political landscape in Greece is confused and volatile at the moment; the right and extreme- right-wing parties are accorded a disproportionately large place in political debate, while the radical left-wing SYRIZA party is attempting to maintain a ‘leftist’ profile and demonstrate its capacity to govern through a strategy of image normalisation. These tensions make it very difficult for the Greek government to stick to the EU’s tough reform agenda. The governing coalition is trying to conceal the social effects of implementing structural policy reforms, even postponing some measures to avoid bearing their political cost. At the same time, it is adopting a very rushed, and thus quite worrying, attitude towards a fast-track growth agenda, without taking into consideration the conditions for sustainable economic development.

Iceland’s contested European Policy: The Footprint of the Past - A Small and Insular Society. Jean Monnet Occasional Paper 01/2013

Introduction. Iceland’s domestic politics and foreign affairs are undergoing drastic changes. After an economic crash, violent protests on the streets of Reykjavik for the first time in Iceland’s history contributed to the defeat of the government. The party system has been altered. A turn has been taken towards Europe after the United States left the island, first by closing its military base in 2006 and then by its clear stance not to assist the country in its economic difficulties. The former close relations with the superpower are unlikely ever to be restored. The EU membership application is placing severe constraints on political parties which are split on the issue and has put in jeopardy the unity of the first left majority in the Icelandic parliament, the Althingi. Society is in a state of flux after an unprecedented economic downscaling and the collapse of almost its entire financial sector – which had boomed rapidly beginning in the mid-1990s. The credibility of politicians, the parliament and the media is in ruins. Iceland’s smallness and its location on the geographical map – one could also say the geopolitical map – has had a profound influence on its domestic and foreign affairs. Iceland is closely associated with the other Nordic states and has adopted many of their domestic characteristics, with important exceptions. On the other hand, the country has come under American influence – geographically, it straddles the Mid-Atlantic rift – and has limited its participation in the European project. Its geographical location in the middle of the North Atlantic has led to a notion that the country’s culture is unique and should be protected by all available means. Politicians continue to play the ‘nationalistic uniqueness’ card with considerable success even though the country has been swept by globalization. Rapid modernization (which only really began in the Second World War with British and American occupations) and sudden engagement with the outside world (which only extended to the general public in the last quarter of the twentieth century) are still slowly but steadily making their mark on the country’s foreign policy. The country’s political discourse and foreign policy still bear the hallmark of the past, i.e. of a small and insular society This paper will address the political developments in Iceland since the 2008 economic crash and place it in a historical context. The aim is to understand Iceland’s present foreign policy and, in particular, the highly contested decision by its government in 2009 to apply for membership of the European Union. The paper is divided into five sections in addition to this introduction and the concluding remarks. First, it starts by explaining the importance in Iceland of a political discourse based on the concept of independence which dates back to the historical narrative of the settlement period. This section will also examine Iceland’s close relations with the other Nordic states – despite important differences between it and the others. Second, the paper will analyse the importance of the party system, i.e. the dominance of the centre-right in Icelandic politics, and the changed nature of the system. Third, it examines how Iceland further distinguishes itself from the other Nordic states in many important features. Fourthly, the paper analyses the country’s three main foreign policy priorities in the post-war period, i.e. extensions of the Exclusive Economic Zone, firm defence arrangements with the US and membership of NATO, and the drive for better market access for marine products – including a partial engagement in the European project. Fifthly, the paper examines how the country’s smallness, in terms of its central administrative capacity, has affected its domestic and foreign policy-making. The concluding section summarizes the main findings concerning the political and historical obstacles that the Social Democratic Alliance faces in its hard-fought battle to change the country’s European Policy.

The Pro-Western Turn in Russia's Foreign Policy: Causes, Consequences and Prospects. OSW Point of View, September 2002

From Europe and Poland's point of view, one of the most important recent developments in international politics was the re-orientation of Russia's foreign policy. This paper aims to answer three important questions relating to this issue: 4. When and why did the "pro-Western turn" in the Russian Federation's policy take place? 5. Has it been profitable for Russia? 6. What goals will the Russian policy pursue in the future? An analysis of the last two years in Russia's foreign policy leads to the several conclusions, including those: 5. Clearly, the Russian leaders realise that in the longer term, Russia - in its desire for more influence in the world - will not be able to survive as an independent pole of power in international politics and it will have to join forces with the West (most likely, the European Union). 6. September 11 was not the cause of Russia's pro-Western turn, but rather a catalyst that put the process which started when Vladimir Putin took his office in sharp focus. 7. In the nearest future, this new direction of Russia's foreign policy seems not be challenged by internal opposition in Russia. 8. The "pro-Western turn" proved to be beneficial for Russia, although: d. Russia has not become a strategic ally of the US e. There has been no breakthrough in the relations between Russia and the European Union, and Moscow has not gained any real influence on NATO's important decisions. f. Russia has not become a major decision-maker of international politics. 5. Russia's closing to the West is in Poland's and Europe's interest.

The "Pro-Western Turn" in Russia's Foreign Policy: Causes, Consequences and Prospects. OSW Point of View (unspecified), September 2002

From Europe and Poland's point of view, one of the most important recent developments in international politics was the re-orientation of Russia's foreign policy. This paper aims to answer three important questions relating to this issue: 1. When and why did the "pro-Western turn" in the Russian Federation's policy take place? 2. Has it been profitable for Russia? 3. What goals will the Russian policy pursue in the future? An analysis of the last two years in Russia's foreign policy leads to the several conclusions, including those: a. Clearly, the Russian leaders realise that in the longer term, Russia - in its desire for more influence in the world - will not be able to survive as an independent pole of power in international politics and it will have to join forces with the West (most likely, the European Union). b. September 11 was not the cause of Russia's pro-Western turn, but rather a catalyst that put the process which started when Vladimir Putin took his office in sharp focus. 7. In the nearest future, this new direction of Russia's foreign policy seems not be challenged by internal opposition in Russia. c. The "pro-Western turn" proved to be beneficial for Russia, although: d. Russia has not become a strategic ally of the US e. There has been no breakthrough in the relations between Russia and the European Union, and Moscow has not gained any real influence on NATO's important decisions. f. Russia has not become a major decision-maker of international politics. g. Russia's closing to the West is in Poland's and Europe's interest.

Russia's turn towards Asia: more words than actions. OSW Commentary No. 92, 2012-10-08

The APEC summit in Vladivostok (8–9 September) was expected to confirm Russia’s ambitions to play a more significant role in the Asia-Pacific region (particularly in East Asia) and balance Moscow’s foreign policy by shifting some of its focus from Europe to Asia. The measures taken ahead of the summit included both the implementation of economic projects in Russia’s Far East and greater diplomatic engagement in the region. The summit itself, however, was less effective than expected. Russia failed to define its place in the Asia-Pacific order, and did not propose any new political or economic initiatives that would go beyond the discussions that have already been held within APEC for years, including plans for a free trade area.

The turn to the East. The flawed diversification of Russian foreign policy. OSW Point of View Number 44, November 2014

The ‘turn to the East’ proclaimed by Russia in 2010 has failed to bring about a fundamental breakthrough in her relations with Asian countries, nor has it produced impulses for the economic modernization of Russia’s Far Eastern territories. Although the energisation of Russian policy towards Asia which has taken place under this slogan has diversified Russian foreign policy somewhat, this diversification has two weak points: Firstly, it has occurred only in the political sphere. The share of Asian countries in Russia’s foreign economic relations has not risen significantly in comparison with the share of European and North American countries. Secondly, the ‘turn to the East’ has turned out primarily to be a turn towards China. In all spheres – diplomatic, economic, energy and military – it is Beijing that has become the most important Asian partner for Moscow. The result is that the policy that aimed to limit the excessive – in the Kremlin’s view – dependence of Russia on the West is likely to turn Russia into a ‘junior partner’ of the People’s Republic of China.

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 Eurozone crisis and the erosion of democratic legitimacy: Lessons from the gold standard. ACES Cases No. 2013.3

This paper makes four propositions. First, it argues that the euro’s institutional design makes it function like the interwar gold exchange standard during periods of stress. Just like the gold exchange standard during the 1930s, the euro created a ‘core’ of surplus countries and a ‘periphery’ of deficit countries. The latter have to sacrifice their internal domestic economic equilibrium in order to restore their external equilibrium, and therefore have no choice but to respond to balance of payments crises by a series of deflationary spending, price and wage cuts. The paper’s second claim is that the euro’s institutional design and the EU’s response to its ‘sovereign debt crisis’ during 2010-13 deepened the recession in the Eurozone periphery, as EMU leaders focused almost exclusively on austerity measures and structural reforms and paid only lip service to the need to rebalance growth between North and South. As Barry Eichengreen argued in Golden Fetters, the rigidity of the gold standard contributed to the length and depth of the Great Depression during the 1930s, but also underscored the incompatibility of the system with legitimate national democratic government in places like Italy, Germany, and Spain, which is the basis for the paper’s third proposition: the euro crisis instigated a crisis of democratic government in Southern Europe underlining that democratic legitimacy still mainly resides within the borders of nation states. By adopting the euro, EMU member states gave up their ability to control major economic policy decisions, thereby damaging their domestic political legitimacy, which in turn dogged attempts to enact structural reforms. Evidence of the erosion of national democracy in the Eurozone periphery can be seen in the rise of anti-establishment parties, and the inability of traditional center-left and center-right parties to form stable governments and implement reforms. The paper’s fourth proposition is that the euro’s original design and the Eurozone sovereign debt crisis further widened the existing democratic deficit in the European Union, as manifested in rising anti-EU and anti-euro sentiment, as well as openly Eurosceptic political movements, not just in the euro periphery, but also increasingly in the euro core.

The Rocky Road to an EU-Armenia Agreement: From U-turn to detour. CEPS Commentary, 3 February 2015

The EU was taken by surprise when the President of Armenia, Serzh Sargsyan, stood by his Russian counterpart and announced Armenia’s plans to join the Russian-led Customs Union in September 2013. After all, before this announcement Armenia and the EU had successfully concluded negotiations on their Association Agreement. Armenia is still suffering the consequences of the Kremlin’s coercion to reject this Association Agreement. Indeed, as Armenians around the world commemorate the centenary of the Armenian Genocide by Ottoman Turkey, the Republic of Armenia is facing mounting challenges. The country remains subject to an economic blockade by Turkey and is in conflict with Azerbaijan. Ever since President’s Sargsyan’s astonishing volte-face, the EU and Armenia are still in the process of trying to rework the failed agreement. The author of this commentary argues that because the future of any new agreement is uncertain, negotiations should be accompanied by a pragmatic EU-Armenia roadmap. This roadmap, alongside the start of the visa liberalisation process and Armenia’s signing up to the European Common Aviation Agreement and Horizon 2020, could become a deliverable at the Riga Summit on 26-27 April 2015.

Social Democracy, Globalization and Governance: Why is there no European Left Program in the EU? CES Germany & Europe Working Papers, No. 00.6, April 2000

This paper addresses globalization and governance in the EU by attempting to generate some plausible hypotheses that might explain the policy choices of the 12 out of 15 European democratic left governments. With all of the discussion in recent years of a democratic deficit, and then need to maintain a "social Europe," why have these governments not produced more explicit left-wing policies? It suggests three possible hypotheses to account for this apparently mysterious outcome. Hypothesis #1: They want to but they can't. Hypothesis #2: They don't want to because they aren't really left anymore. Hypothesis #3: They could, but they all are suffering from a fundamental failure of imagination. The paper explores each of these hypotheses in two ways. First it examines the initial years of the Schröder government in Germany apparently, pursuing each of these three hypotheses and different times during this period. Then it looks more systematically and comparatively and each of the three hypotheses by including analysis both of Germany and several other EU member states. The larger goal of this work is to provoke discussion and research on what role left political movements can actually play. Is it even reasonable to expect such a group of nation states to develop innovative forms of cross-national governance? Or are new and/or revised forms of representation and governance beyond traditional nation-state models.