Priorities for the Next Legislature: EU external action. CEPS Commentary, 29 September 2014

At a time when the European Union’s strategic and geopolitical environment is more troubled and unpredictable than it has been for decades, the European Council is calling for stronger EU engagement in international affairs. The rest of the rapidly changing world is not going to wait for the EU to get its act together to defend its own values and interests. This CEPS Commentary sets out four priorities for High Representative/Vice-President-designate Federica Mogherini as she takes up her role as leader of the European External Action Service and the next 'RELEX' Group of Commissioners.

Ukraine on the edge. EPC Commentary, 24 April 2014

During the past six months Ukraine has been through a revolution, its Crimean peninsula has been annexed by Russia and its territorial integrity continues to be challenged. With ongoing unrest in three Eastern regions, a peace deal recently agreed in Geneva hangs by a thread as pro-Russian separatists continue to occupy numerous public buildings and international actors remain divided over how long to wait for Russia to implement the accord before placing new sanctions. While the West accuses Russia of provoking and influencing the unrest, Russia points the finger at Ukraine’s interim leadership which it claims is illegal and “fascist”.

What do the Maidan protests tell us about Ukraine? Diagnosis and prospects for Ukrainian politics. OSW Commentary No. 125, 22.01.2014

The outbreak of the protests in the Maidan in Kyiv, and also periodically in other Ukrainian cities, has come as a surprise to both the government and the opposition. These rallies have now been ongoing for several weeks and their most striking feature is their focus on citizenship and their apolitical nature and, by extension, a clear attempt to dissociate the protests from Ukraine’s political opposition. Neither Batkivshchyna, UDAR nor Svoboda have managed to take over full control of the demonstrations. On the one hand, this has been linked to the fact that the protesters have little confidence in opposition politicians and, on the other hand, to disputes over a joint strategy and to rivalry between the three parties. As a result, the citizen-led movement has managed to retain its independence from any political actors. As a consequence of the radicalisation and escalation of the protests following 19 January, the political opposition has lost a significant proportion of the control it had been in possession of until then. Maidan should also be seen as the first clear manifestation of a new generation of Ukrainians – raised in an independent Ukraine, well-educated and familiar with new social media, but nonetheless seeking to ground themselves in national tradition. After the initial shock and a series of failed attempts to quell the protests, the government has seemingly opted to wait out the unrest. At the same time, however, it has been creating administrative obstacles for both the political and the civil opposition, restricting their access to the media and severely limiting the legal possibility to organise demonstrations.

The Ukrainian Orthodox Church's stance on the revolution and war. OSW Commentary No. 151, 27.10.2014

Volodymyr (secular name Viktor Sabodan), the Metropolitan of Kyiv and All-Ukraine, the head of the Ukrainian Orthodox Church (UOC), which recognises the honorary primacy of the Moscow Patriarchate, died on 5 July 2014 at the age of 79. He was replaced by Metropolitan Onufry (secular name Orest Berezovsky), aged 70. The fact that this representative of the moderate trend, far from politics, was elected signifies that the UOC’s previous policy will be continued in the coming years: strengthening the Church’s independence without questioning its canonical bonds with Moscow. Metropolitan Onufry’s task is to wait out the hard times, rather than to embark upon an active policy. The political developments this year have significantly weakened pro-Russian views and sentiments among the Ukrainian public, including members of the UOC. On the other hand, they have also contributed to the radicalisation of views within firmly pro-Russian circles. The hierarchs of the Ukrainian Orthodox Church have distanced themselves from these developments. The reasons for this included a lack of unity among them as regards this issue, as well as the leadership crisis linked to Metropolitan Volodymyr’sillness. The main problems the Ukrainian Orthodox Church is facing today are as follows: meeting the expectations of those of its members who hold patriotic views (mainly the younger generation) without at the same time antagonising its numerous members who are pro-Russian; and also continuing to disregard the Kyiv Patriarchate and maintaining bonds with the Russian Orthodox Church. Therefore, we may expect the UOC to continue avoiding taking a clear stance on the present conflict, instead focusing on charity.

First steps towards into the unknown. The possibilities prospects of unconventional gas extraction in Ukraine. OSW Commentary No. 106, 2013-04-24

Ukraine’s deposits of unconventional gas (shale gas, tight gas trapped in non-porous sandstone formations, and coal bed methane) may form a significant part of Europe’s gas reserves. Initial exploration and test drilling will be carried out in two major deposits: Yuzivska (Kharkiv and Donetsk Oblasts) and Oleska (Lviv and Ivano-Frankivsk Oblasts), to confirm the volume of the reserves. Shell and Chevron, respectively, won the tenders for the development of these fields in mid 2012. Gas extraction on an industrial scale is expected to commence in late 2018/ early 2019 at the earliest. According to estimates presented in the draft Energy Strategy of Ukraine 2030, annual gas production levels may range between 30 billion m3 and 47 billion m3 towards the end of the next decade. According to optimistic forecasts from IHS CERA, total gas production (from both conventional and unconventional reserves) could reach as much as 73 billion m3. However, this will require multi-billion dollar investments, a significant improvement in the investment climate, and political stability. It is clear at the present initial stage of the unconventional gas extraction project that the private interests of the Ukrainian government elite have played a positive role in initiating unconventional gas extraction projects. Ukraine has had to wait nearly four decades for this opportunity to regain its status of a major gas producer. Gas from unconventional sources may lead not only to Ukraine becoming self-sufficient in terms of energy supplies, but may also result in it beginning to export gas. Furthermore, shale gas deposits in Poland and Ukraine, including on the Black Sea shelf (both traditional natural gas and gas hydrates) form a specific ‘European methane belt’, which could bring about a cardinal change in the geopolitics and geo-economics of Eastern and Central Europe over the next thirty years.

TRAC: a market-based tax on capital flight as an alternative to Grexit. CEPS Commentary, 7 May 2015

In this CEPS Commentary, Daniel Gros turns his attention to the main outstanding problem facing Greece today, namely capital flight. Fearful that the country will leave the euro, depositors are withdrawing cash from their bank accounts – thereby making this event more likely. He outlines a proposal in which outgoing payments from Greek banks in the form of cash or via the TARGET system would be limited to the amount of incoming payments, i.e. revenues from exports or tourism, via an auction system. Greece could remain formally a member of the euro area, but the price for cash withdrawals would encourage depositors to wait and stimulate exports.

Should the ‘outs’ join the European banking union? Bruegel Policy Contribution Issue 2016/03 February 2016

For political reasons, European Union member states’ opinions on joining banking union range from outright refusal to active consideration. The main stance is to wait and see how the banking union develops. The wait-and-see positions are often motivated by the consideration that joining banking union might imply joining the euro. However, in the long term, banking union’s ultimate rationale is linked to cross-border banking in the single market, which goes beyond the single currency. This Policy Contribution documents the banking linkages between the nine ‘outs’ and 19 ‘ins’ of the banking union. We find that some of the major banks based in Sweden and Denmark have substantial banking claims across the Nordic and Baltic regions. We also find large banking claims from banks based in the banking union on central and eastern Europe. The United Kingdom has a special position, with London as both a global and European financial centre. We find that the out countries could profit from joining banking union, because it would provide a stable arrangement for managing financial stability. Banking union allows for an integrated approach towards supervision (avoiding ring fencing of activities and therefore a higher cost of funding) and resolution (avoiding coordination failure). On the other hand, countries can preserve sovereignty over their banking systems outside the banking union.