The US-China Joint Announcement on Climate Change: Can the G2 make a difference? CEPS Commentary, 26 November 2014

This Commentary finds that the US-China joint declaration on climate change, issued following the Asia-Pacific Economic Cooperation (APEC) Summit in Beijing on November 12th, is undoubtedly an important announcement by the two global economic giants responsible for emitting over 30% of the world’s GHG emissions. As such, it needs to be seen as important and relevant – a very positive development towards a new global climate change agreement in Paris. It is a challenge to those that have announced their pledges and are seen as capable of doing more, as well as to those that have not yet announced their intentions. It shows the importance and success of the UN climate change conference in Warsaw last year, when the decision was made that all Parties should announce their commitments by the first quarter of 2015. It also represents a total breakdown of the Kyoto Protocol-style separation in climate change negotiations between countries into Annex 1 and non-Annex 1, with China signalling that it is taking on the leadership role that comes with being a great economic power. In broader terms, it shows that there is scope for cooperation between the two main economic actors, even in the face of competition in other spheres. It is also a challenge to the EU, which was a leader and needs to show that there is a benefit in maintaining its leadership. Finally, agreements are deemed historic only by history. This one is important, and a potential game-changer, on the face of it. But it needs to live up to its promise. There is sufficient uncertainty for us to withhold final judgement and see if its promise materialises through implementation. But, as sober a judgement as we must make on such important matters, this announcement certainly gives us great hope that it is possible to do what needs to be done, and we must wholeheartedly welcome and applaud it.

The new Inter-Parliamentary Conference on the CFSP/CSDP. Jean Monnet/Robert Schuman Paper Series Vol. 14 No. 12, July 2014

The objectives of the 2009 Lisbon Treaty (LT) include ways to improve the democratic and international images of the European Union (EU). The focus of the literature has so far focused on the overall treaty impact and on the EU´s international role. This paper considers instead its impact on the question of the democratic accountability of the EU´s Common Foreign and Security Policy (CFSP), including its Common Security and Defence Policy dimension (CSDP). This paper consists of three parts: (1) The first part describes the changes the LT has made for the European Parliament (EP) in terms of its external relations. (2) The second part presents the many deficits that the EU suffers from in its foreign, security and defence policies. (3) The third part offers a preliminary analysis of the recently created Inter-Parliamentary Conference (IPC) on CFSP/CSDP, which in addition to MEPs (EP members) includes parliamentarians from the national EU parliaments. The paper concludes that although the IPC is a positive development in trying to bridge those existing democratic gaps, it remains only a step in the right direction due to the existence of many such deficits in the foreign, security and defence policies of the EU and of its member states.

Russia's development assistance. OSW Commentary No. 62, 2011-10-10

In its attempts to catch up with the global trend, Russia began granting development assistance in 2004. From the onset of Russia’s commitment, the aid delivered has increased fivefold and reached approximately US$ 500 million in 2010. Russian aid, albeit distributed nearly exclusively via international organisations, has been granted above all to members of the Commonwealth of Independent States (CIS). In recent months work on the establishment of the Russian development assistance system has been accelerated (a national strategy is being prepared and a specialised agency is to be established). This move proves that the Kremlin attaches weight to activity in this area which is an element of soft power politics, the foundations of which Moscow is currently attempting to lay. In its commitment to development co-operation Russia has sought on the one hand to increase its prestige on the international stage and on the other hand to gain another instrument of exerting its ascendancy in the CIS. The scale of aid and the way of delivering it have not made Russia an important global actor. Over the last five years Russia increased the funding allocated to development assistance several times, however, compared to other donors its aid does not appear impressive. The resources dedicated to this end stand at a mere 0.035% of Russian GDP. Unlike other non-Western superpowers such as China or India, Russia is not a competitor for Western countries in this area on the global scale. Nevertheless, within the CIS, Russia’s aid is building the country’s position as a donor. The long-term results of this aid are however being counteracted by the fact that Russia is expecting measurable and direct political and economic benefits in return. Although this policy helps Moscow achieve its objectives in the CIS, it does not develop Russian potential in the sphere of soft power or create a positive image of the country.

Financial Sector Development and Integration in the Southern and Eastern Mediterranean: Towards a long-term sustainable transition. MEDPRO Policy Paper No. 7, April 2013

This MEDPRO Policy Paper examines the trends and prospects in financial-sector development and integration in the southern and eastern Mediterranean countries and concludes with an agenda for a long-term sustainable transition where finance turns to be a positive stimulus to long-term growth.

Determinants of Financial Development across the Mediterranean. MEDPRO Technical Report No. 29/February 2013

Casual observation shows that that the financial systems in the southern and eastern Mediterranean are unable (or unwilling) to divert the financial resources that are available to them as funding opportunities to private enterprises. Using a sample of both northern and southern Mediterranean countries for the years 1985 to 2009, this study empirically assesses the reasons underlying such conditions. The results show that strong legal institutions, good democratic governance and adequate implementation of financial reforms can have a substantial positive impact on financial development only when they are present collectively. Moreover, inflation appears to undermine banking development, but less so when the capital account is open. Government debt growth appears to weaken credit growth, which confirms that public debt ‘crowds out’ private debt. Lastly, capital inflows appear to primarily have an income effect, increasing income and thereby national savings, and thus increasing the availability of credit.

The Relationship between Energy and Socio-Economic Development in the Southern and Eastern Mediterranean. MEDPRO Technical Report No. 27/February 2013

This report aims to identify, explain and detail the links and interactions in southern and eastern Mediterranean countries (SEMCs) between energy supply and demand and socio-economic development, as well as the potential role of energy supply and demand policies on both. Another related aim is to identify and analyse, in a quantitative and qualitative way, the changing role of energy (both demand and supply) in southern Mediterranean economies, focusing on its positive and negative impact on socio-economic development. This report investigates in particular: o The most important channels through which resource wealth can contribute to or hamper economic and social development in the analysed region; o Mechanisms and channels of relations between energy supply and demand policies and economic and social development. The burdens of energy subsidies and ‘oil syndrome’ are of particular relevance for the region. An integrated socio-economic development and energy policy scenario approach showing the potential benefits and synergies within countries and the region is developed in the final part of the report.

Banking Sector Soundness, Innovation, and Development: Emerging Europe and South Asia. ACES Working Papers, 2012

While most academic and practitioner researchers agree that a country’s commercial banking sector’s soundness is a very significant indicator of a country’s financial market health, there is considerably less agreement and substantial confusion surrounding what constitutes a healthy bank in the aftermath of 2007+ financial crisis. Global banks’ balance sheets, corporate governance, management compensation and bonuses, toxic assets, and risky behavior are all under scrutiny as academics and regulators alike are trying to quantify what are “healthy, safe and good practices” for these various elements of banking. The current need to quantify, measure, evaluate, and compare is driven by the desire to spot troubled banks, “bad and risky” behavior, and prevent real damage and contagion in the financial markets, investors, and tax payers as it did in the recent crisis. Moreover, future financial crisis has taken on a new urgency as vast amounts of capital flows (over $1 trillion) are being redirected to emerging markets. This study differs from existing methods in the literature as it entail designing, constructing, and validating a critical dimension of financial innovation in respect to the eight developing countries in the South Asia region as well as eight countries in emerging Europe at the country level for the period 2001 – 2008, with regional and systemic differentials taken into account. Preliminary findings reveal that higher stages of payment systems development have generated efficiency gains by reducing the settlement risk and improving financial intermediation; such efficiency gains are viewed as positive financial innovations and positively impact the banking soundness. Potential EU candidate countries: Albania; Montenegro; Serbia