The Treaty of Lisbon or intergovernmental temptation?

From the Introduction. This question goes to the very heart of the European project: it is fundamental for the future of the European Union and its role in the world. The Treaty of Lisbon emerged from the ashes of the European Constitution. Driven forward by Angela Merkel, as President of the European Council, Nicolas Sarkozy and José Manuel Barroso, the main advances made in the Constitution were preserved at the expense of a few concessions and symbolic sacrifices in order to make the Union more effective and more democratic.

A simple model of multiple equilibria and default. CEPS Working Document No. 366, 16 July 2012

This Working Document by Daniel Gros presents a simple model that incorporates two types of sovereign default cost: first, a lump-sum cost due to the fact that the country does not service its debt fully and is recognised as being in default status, by ratings agencies, for example. Second, a cost that increases with the size of the losses (or haircut) imposed on creditors whose resistance to a haircut increases with the proportional loss inflicted upon them. One immediate implication of the model is that under some circumstances the creditors have a (collective) interest to forgive some debt in order to induce the country not to default. The model exhibits a potential for multiple equilibria, given that a higher interest rate charged by investors increases the debt service burden and thus the temptation to default. Under very high debt levels credit rationing can set in as the feedback loop between higher interest rates and the higher incentive to default can become explosive. The introduction of uncertainty makes multiple equilibria less likely and reduces their range.

Taking stock after the Warsaw COP. CEPS Commentary, 4 December 2013

Drawing on his direct participation in the latest round of climate talks in Warsaw, Andrei Marcu looks at the results of the 19th COP through the lens of three basic questions, with a view to understanding how much progress was made and where we stand two years ahead of Paris. Are the targets adequate and how do we reach environmentally adequate targets? Can one understand and compare what other Parties are promising to do to ensure that the level of effort is comparable and equitable, and that companies are not asked to do more than their competitors in other jurisdictions? Is there comparability and equity in the eyes of the beholder? Do we understand what tools each country uses (what is available, what one gets as support) to ensure that no one country (and its companies) gets an easier ride or competitive advantage in meeting the commitment/promises that countries make. The author asserts that these questions need to be answered if an agreement is to be reached in 2015. And if they are not, he warns of mistrust, fear of carbon leakage and the temptation to resort to protectionist measures to compensate for competitive disadvantage.

Searching for harm or harming search? A look at the European Commission’s antitrust investigation against Google. CEPS Special Report No. 118/September 2015

As the European Commission’s antitrust investigation against Google approaches its final stages, its contours and likely outcome remain obscure and blurred by a plethora of nonantitrust-related arguments. At the same time, the initial focus on search neutrality as an antitrust principle seems to have been abandoned by the European Commission, in favour of a more standard allegation of ‘exclusionary abuse’, likely to generate anticompetitive foreclosure of Google’s rivals. This paper discusses search neutrality as an antitrust principle, and then comments on the current investigation based on publicly available information. The paper provides a critical assessment of the likely tests that will be used for the definition of the relevant product market, the criteria for the finding of dominance, the anticompetitive foreclosure test and the possible remedies that the European Commission might choose. Overall, and regardless of the outcome of the Google case, the paper argues that the current treatment of exclusionary abuses in Internet markets is in urgent need of a number of important clarifications, and has been in this condition for more than a decade. The hope is that the European Commission will resist the temptation to imbue the antitrust case with an emphasis and meaning that have nothing to do with antitrust (from industrial policy motives to privacy, copyright or media law arguments) and that, on the contrary, the Commission will devote its efforts to sharpening its understanding of dynamic competition in cyberspace, and the tools that should be applied in the analysis of these peculiar, fast-changing and often elusive settings.