Germany as viewed by other Member States. EPIN Working Paper No. 33, 21 June 2012

Germany’s problem is not so much that it is generally right about the need for fiscal discipline but that it has to learn how to be right: this is the most difficult issue to manage from a political standpoint. This EPIN (European Policy Institutes Network) paper brings together contributions from a cross-section of EU member states and the Gallup World Poll survey on the question of how Germany is being viewed at this time of economic and political crisis. The conclusions, subtitled: The Narcissism of Small Differences is a refreshingly candid and insightful analysis of current European relations, noting that Germany’s current weight reflects only the conjuncture of extraordinary domestic and international economic factors. How Germany and the other member states behave towards one another now will have implications for all long after this moment has passed.

A sovereign wealth fund to lift Germany's curse of excess savings. CEPS Policy Brief No. 280, 28 August 2012

As an alternative to the present system of intermediation of the German savings surplus, this paper suggests that the risk-adjusted rate of return could be improved by creating a sovereign wealth fund for Germany (designated DESWF), which could invest excess German savings globally. Such a DESWF would offer German savers a secure vehicle paying a guaranteed positive minimum real interest rate, with a top-up when real investment returns allowed. The vehicle would invest the funds in a portfolio that is highly diversified by geography and asset classes. Positive real returns can be expected in the long run based on positive real global growth. Since, in this case, a significant amount of funds would flow outside the euro area, the euro would depreciate, which would help crisis countries presently struggling to revive growth through exports and to close their external deficits so as to recoup their international credit-worthiness. Target imbalances would gradually disappear and German claims abroad would move from nominal claims on the ECB to diversified real and nominal claims on various private and public foreign entities in a variety of asset classes.

What Germany should fear most is its own fear: An analysis of Target2 and current account imbalances. CEPS Working Document No. 368, September 2012

This paper analyzes two claims that have been made about the Target2 payment system. The first one is that this system has been used to support unsustainable current account deficits of Southern European countries. The second one is that the large accumulation of Target2 claims by the Bundesbank represents an unacceptable risk for Germany if the eurozone were to break up. We argue that these claims are unfounded. They also lead to unnecessary fears in Germany that make a solution of the eurozone crisis more difficult. Ultimately, this fear increases the risk of a break-up of the eurozone. Or to paraphrase Franklin Roosevelt, what Germany should fear most is simply its own fear.

British Balance of Competence Reviews, Part I: ‘Competences about right, so far’. EPIN Working Paper No. 35, October 2013

The first in a series for a CEPS-EPIN project entitled “The British Question and the Search for a Fresh European Narrative” this paper is pegged on an ambitious ongoing exercise by the British government to review all the competences of the European Union. The intention is that this should provide a basis for informed debate before the referendum on the UK remaining in the EU or not, which is scheduled for 2017. This paper summarises the first six reviews, each of which runs to around 80 pages, covering foreign policy, development policy, taxation, the single market, food safety, and public health. The present authors then add their own assessments of these materials. While understandably giving due place to British interests, they are of general European relevance. The substantive conclusions of this first set of reviews are that the competences of the EU are judged by respondents to be ‘about right’ on the whole, which came as a surprise to eurosceptic MPs and the tabloid media. Our own view is that the reviews are objective and impressively researched, and these populist complaints are illustrating the huge gap between the views of informed stakeholders and general public opinion, and therefore also the hazard of subjecting the ‘in or out’ choice for decision by referendum. If the referendum is to endorse the UK’s continuing membership there will have to emerge some fresh popular narratives about the EU. The paper therefore concludes with some thoughts along these lines, both for the UK and the EU as a whole.

The Visegrad group and Germany: towards a new paradigm. CEPS Commentary, 28 November 2013

In surveying the strategic realignment now underway in Central Europe among the four members of the Visegrad Group, Michal Simecka observes in a new CEPS Commentary that it is hard to think of another point in modern history that permitted a scenario of Germany and its eastern neighbours working together to constructively shape Europe.

The macroeconomic imbalance procedure and Germany: when is a current account surplus an 'imbalance'? CEPS Policy Brief No. 301, 13 November 2013

In this new Policy Brief, CEPS Director Daniel Gros argues that the 13 November announcement of the European Commission that Germany is running an excessive current account surplus appears to be much ado about little. All the Commission can, and will, do is to start an ‘in depth analysis’. This might lead to strong political reactions and an enormous echo in the media. But nothing of concrete substance is likely to follow.

Germany as Scapegoat. CEPS Commentary, 10 December 2013

Germany has been an attractive target for external-deficit countries in Europe and beyond, but beating up on Germany alone appears to be the wrong way to get results. This CEPS Commentary by Daniel Gros argues that the discussion of Germany’s surplus confuses the issues in two ways. First, he points out that although the German economy and its surplus loom large in the context of Europe, an adjustment by Germany alone would only modestly benefit the eurozone periphery. Second, in the global context, he finds that adjustment by Germany alone would benefit many countries a little, but other surplus countries including Russia, China and Japan, would benefit disproportionally.

British Balance of Competence Reviews, Part II: Again, a huge contradiction between the evidence and Eurosceptic populism. EPIN Paper No. 40, June 2014

This paper is the second in a series for a CEPS project entitled “The British Question and the Search for a Fresh European Narrative”. It is pegged on an ambitious exercise by the British government to review all the competences of the European Union on the basis of evidence submitted by independent stakeholders. In all, 32 sectoral policy reviews are being produced over the period 2013-2015, as input into public information and debate leading up to a referendum on whether the UK should remain in, or secede from, the EU, planned for 2017. This second set of reviews covers a broad range of EU policies (for the single market for goods, external trade, transport policy, environment, climate change, research, asylum, non-EU immigration, civil judicial cooperation, tourism, culture and sport). The findings confirm what emerged from the first set of reviews, namely that there is little or no case for repatriation of EU competences at the level they are defined in the treaties. This does not exclude that at a more detailed level there can be individual actions or laws that might be done better or not at all. However, that is the task of all the institutions to work at on a regular basis, and hardly a rationale for secession. For the UK in particular the EU has shown considerable flexibility in agreeing to special arrangements, such as in the case of the policies here reviewed of asylum, non-EU immigration and civil judicial cooperation. In other areas reviewed here, such as the single market for goods, external trade, transport, environment, climate change and research, there is a good fit between the EU’s policies and UK priorities, with the EU perceived by stakeholders as an ‘amplifier’ of British interests.

British Balance of Competence Reviews, Part III: More reform than renegotiation or repatriation. EPIN [Working] Paper No. 42/December 2014. [see Abstract for I and II]

This paper, the third in a series for a CEPS project on the ‘The British Question’, is pegged on an ambitious exercise by the British government to review all the competences of the European Union on the basis of evidence submitted by independent stakeholders. The reviews considered in this paper cover the following EU policies: the single market for services, financial markets, the free movement of people, cohesion, energy, agriculture, fisheries, competition, social and employment policies, and fundamental rights. The declared objective of Prime Minister Cameron is to secure a ‘new settlement’ between the UK and the EU. From political speeches in the UK one can identify three different types of possible demand: reform of EU policies, renegotiation of the UK’s specific terms of membership, and repatriation of competences from the EU back to the member states. As most of the reviews are now complete, three points are becoming increasingly clear: i) The reform agenda – past, present or future - concerns virtually every branch of EU policy, including several cases reviewed here that are central to stated UK economic interests. The argument that the EU is ‘unreformable’ is shown to be a myth. ii) The highly sensitive cases of immigration from the EU and social policies may translate into requests for renegotiation of specific conditions for the UK, but further large-scale opt-outs, as in the case of the euro and justice and home affairs, are implausible. iii) While demands for repatriation of EU competences are voiced in general terms in public debate in the UK, no specific proposals emerge from the evidence as regards competences at the level at which they are identified in the treaties, and there is no chance of achieving consensus for such ideas among member states. Michael Emerson and Steven Blockmans, “British Balance of Competence Reviews, Part I: ‘Competences about right, so far’”, CEPS/EPIN Working Paper No. 35, October 2013 (www.ceps.eu/book/british-balance-competence-reviews-part-i-%E2%80%98competences-about-right-so-far%E2%80%99)(http://aei.pitt.edu/45599/); Michael Emerson, Steven Blockmans, Steve Peers and Michael Wriglesworth, “British Balance of Competence Reviews, Part II: Again, a huge contradiction between the evidence and Eurosceptic populism”, CEPS/EPIN Working Paper No. 40, June 2014 (www.ceps.eu/book/british-balance-competence-reviews-part-ii-again-huge-contradiction-between-evidence-and-eurosc)(http://aei.pitt.edu/52452/).

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.

Creating Stability: National Preferences and the Origins of European Monetary System. CES Germany & Europe Working Papers, No. 00.9, December 2000

This essay compares the preferences of France, Italy, and Britain on the creation of the European Monetary System in 1978-1979, especially the Exchange Rate Mechanism, which stabilised nominal exchange rates. My claim is that the different conclusions reached by the governments (France and Italy in, Britain out) cannot be explained by economic circumstances or by interests, and I elaborate an intervening institutional variable which helps explain preferences. Deducing from spatial theory that where decisionmakers `sit' on the left-right spectrum matters to their position on the EMS, I argue that domestic constitutional power-. sharing mechanisms privilege certain actors over others in a predictable and consistent way. Where centrists were in power, the government's decision was to join. Where left or right extremists were privileged, the government's decision was negative. The article measures the centrism of the governments in place at the time, and also reviews the positions taken by the national political parties in and out of government. It is intended to contribute to the growing comparativist literature on the European Union, and to the burgeoning literature on EU-member-state relations.

European Monetary Union: between the stakeholder and the stockholder models of capitalism. CES Germany & Europe Working Papers, No. 01.3, 2001

From the mid-1980s on a new attitude towards self-determination appeared in Western European integration. With the Maastricht Treaty of 1992 and, later, with theAmsterdam Treaty of 1997 the member countries of the European Community manifested their determination to be active players in the new international order. Accepting and instituting the single market and monetary union constituted, however, a challenge of compatibility between the traditional model of welfare European capitalism and the impositions coming from globalization under the neo-liberal model of Anglo-Saxon capitalism. This issue is examined here under two perspectives. The first reviews the implications which globalization has had on the European model of capitalism and the second the complications for monetary management as Europe moves from a nationally regulated to a union regulated financial structure.