Banking Union in sight five years on. CEPS Commentary, 13 September 2013

On the fifth anniversary of the start of the financial crisis, Karel Lannoo looks at the regulatory steps that have been taken to date, and argues that the EU should apply the same logic of reinforced integration at the federal level that informed the Single Supervisory Mechanism to the bank resolution systems and deposit guarantee schemes.

The European Citizen's Initiative: next big thing or new false good idea? Egmont Paper No. 59, July 2013

From the Introduction. One innovative element of the Lisbon Treaty was the creation of a European Citizens’ Initiative (ECI). At the time, this was sometimes hailed as a fundamental change in the European institutional system. A few years after the entry into force of the Treaty, however, much less is heard about this “first truly transnational instrument of modern direct democracy”, this “revolution in disguise”, this “very innovative and symbolic” provision. This could seem surprising at first sight. Since the entry into force of the Treaty, the implementation of this provision has been remarkably rapid. Meanwhile, new arguments have risen concerning the lack of democratic legitimacy of the European Union, and the lack of connection between the European institutions and the citizens.

Elements of Europe's energy union. Bruegel Policy Brief 2014/05, September 2014

THE ISSUE European Union energy policy is guided by three objectives: sustainability, security of supply and competitiveness. To meet its goals in these areas, the EU is updating its energy strategy with new targets for 2030. The starting point for this is the assessment of the previous EU climate and energy package, at the centre of which were the 20-20-20 targets for 2020. Although the EU is largely on track to meet these targets, EU energy policy is generally not perceived as a success. Recent events have undermined some of the assumptions on which the 2020 package was built, and the policies for achieving the 2020 targets – although at first sight effective – are far from efficient.

The Paradoxes of Moldovan Sports. An insight into the nature of the Transnistrian conflict. OSW Point of View, November 2011

Mutual relations in the area of sports, which in contemporary international contacts often not only reflect the true nature of political relations but sometimes even affect them, can be a valuable contribution to the analysis of this conflict’s nature. Why did the Transnistrian government, despite the use of anti-Moldovan rhetoric, agree to Transnistrian athletes representing Moldova during the Olympics and in other international competitions? Why does it accept the presence of sports teams from both banks of the Dniester playing in the same leagues? Why does Transnistria, despite being much smaller, predominate in many sports? How is it that Sheriff Tiraspol, the flagship football club of the business and political circles controlling Transnistria, managed to win the Moldovan championship ten times in a row and is the main source of players for Moldova’s national team? Does sport really ‘know no borders’ or perhaps the border on the Dniester is different than seems at first sight?

Is a Concordat over Ukraine now conceivable with Mishka the bear? CEPS Commentary, 21 December 2014

With the tumultuous year of ever-changing episodes in Ukraine coming to a close – from Yanukovich reneging at Vilnius last November, to the new Maidan, to Yanukovich fleeing for his life, to Russia’s annexation of Crimea and incursions into the eastern Donbass, the election of pro-European President Poroshenko, the war with over 4,000 dead, the election of a new pro-European parliament and now the crash of the rouble – Michael Emerson sees at last a possible the end-game in sight. In this commentary, he sketches the essential elements of a Concordat to be struck between Russia, Ukraine and the West that would allow the eastern Donbass to be drawn into more normal processes of political and economic negotiation and the badly wounded Russia to gradually return to more normal international relations.

What signal from the Fed? Should the ECB ease further? CEPS Commentary, 18 September 2015

The Federal Reserve left rates unchanged at its closely-watched meeting on September 17th, although many had argued that the real economy data, especially on the labour market, would have justified an exit (from the zero interest policy). In this CEPS Commentary, Daniel Gros observes that no similar decision on exit is in sight in the euro area, despite the fact that some have argued that the ECB should consider further easing measures (pushing the deposit rate deeper into negative territory or increasing the size of its asset purchase programme). He asks, in fact, whether further easing measures should be even discussed at this point.

Fine-tuning the use of bail-in to promote a stronger EU financial system. CEPS Special Report No. 136/April 2016

This paper discusses the application of the new European rules for burden-sharing and bail-in in the banking sector, in view of their ability to accommodate broader policy goals of aggregate financial stability. It finds that the Treaty principles and the new discipline of state aid and the restructuring of banks provide a solid framework for combating moral hazard and removing incentives that encourage excessive risk-taking by bankers. However, the application of the new rules may have become excessively attentive to the case-by-case evaluation of individual institutions, while perhaps losing sight of the aggregate policy needs of the banking system. Indeed, in this first phase of the banking union, while large segments of the EU banking sector still require a substantial restructuring and recapitalisation, the market may not be able to provide all the needed resources in the current environment of depressed profitability and low growth. Thus, a systemic market failure may be making the problem impossible to fix without resorting to temporary public support. But the risk of large write-offs of capital instruments due to burden-sharing and bail-in may represent an insurmountable obstacle to such public support as it may set in motion an investors’ flight. The paper concludes by showing that existing rules do contain the flexibility required to accommodate aggregate policy requirements in the general interest, and outlines a public support scheme for the precautionary recapitalisation of solvent banks that would be compliant with EU law.