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.

Saving Libya from itself: What the EU should do now. CEPS Commentary, 1 December 2014

Libya is experiencing its worst security crisis since the 2011 revolution, the intervention by NATO and the overthrow of Colonel Muammar Gaddafi. While the parliamentary elections of July 2012 provided “an opportunity to put the transition process back on track and overcome the recent political polarisation”, the country has instead descended into a deadly vortex of conflicting political groups, militias and tribes. Without the international political attention that is needed to save it from itself, Libya is now breaking up in at least two parts. Each faction is under pressure to declare its allegiance to the two biggest rival coalitions: either ‘Libyan Dignity’ or ‘Libyan Dawn’. The authors suggest that EU action take place on three levels.

Gagauzia: growing separatism in Moldova? OSW Commentary No. 129, 10.03.2014

On 2 February, the regional authorities in Gagauzia - an autonomous region of the Republic of Moldova - carried out two simultaneous referenda. In the first, local residents were asked to declare their support for the country’s integration either with the EU or with the Moscow-led Customs Union (CU); the second referendum sought their opinion on the draft law “On the deferred status of the Autonomous Region of Gagauzia”. Under the proposed legislation, if Moldova were to lose its sovereignty (for example, through the unification of Moldova and Romania, or even as some politicians have argued, through Moldova’s further integration with the EU), the autonomous region would automatically become the independent Republic of Gagauzia. As expected, the outcome of the vote has shown overwhelming support for both the CU and for the draft law. According to the figures released by Gagauzia’s Central Electoral Commission, 98.5% of the voters supported Moldova’s integration with the Customs Union, while 98% voted in favour of the ‘deferred independence’ bill. Support for closer integration with the EU was marginal, reaching just over 2%. Despite the one-sided outcome of the referendum, there is no reliable evidence to suggest that the ballot was rigged. It should also be noted that voter turnout was very high, reaching about 70%. Representatives of the Moldovan Central Electoral Commission, however, believe that the figure may have been artificially inflated by excluding many of the voters currently residing abroad from the count.

Moments of Truth – A new neo-Gaullist Germany? EuropEos Commentary No. 3, 1 June 2010

The European process is based on compromises; when it comes to selling them to national electorates, countries behave differently. France feels compelled to declare victory; Germany has more often chosen to stress the concessions that it made, adding that they were painful but necessary for the sake of ‘Europe’. The reality is very different. In this new EuropEos Commentary, Riccardo Perissich, Executive Vice-President of the Council for the United States and Italy, describes that European reality, in unambiguous terms.