Elections to the European Parliament and the trouble with vox populi. EPIN Commentary No. 12, 22 August 2013

Declining support for the European Union in many member states is causing some disquiet about the possibility of an even lower voter turnout in the upcoming European Parliament (EP) elections to be held next May. This discontent might well be exploited by populist anti-European parties and boost protest-vote participation, cautions Sonia Piedrafita in this EPIN Commentary, and this would pose a serious risk for EU decision-making and undermine the sense of common identity and any plans for further integration. This Commentary, which looks at the elections from an EU perspective, is the first in a series of Commentaries by EPIN (European Policy Institutes Network) that will examine the outlook for the European Parliament elections in various member states.

Macedonia - A country in crisis. CEPS Policy Brief No. 299, 13 September 2013

Macedonia is a country in deep trouble. There is a climate of mistrust between all the political parties; intolerance of minority groups is increasing and fear is also generated by the all-pervasive control of the main governing party. In 2009 the European Commission recommended that a date be set for accession negotiations to start, but since then the country's efforts to join the EU (and NATO) have been blocked. Author Erwan Fouéré sets out ten clear recommendations for both Macedonia and the EU on the way forward.

A Gas Hub for Ukraine. CEPS Commentary, 11 June 2014

For many years, when natural gas was mentioned in conjunction with Ukraine, it meant nothing but trouble. But at the very moment when Ukraine's territorial integrity is at stake, natural gas could become part of the solution. Due to its massive storage potential, namely one-third that of the EU (or seven-times that of the UK), Ukraine is a natural candidate for an eastern European gas hub. Becoming an integrated part of the European gas market has economic and political merits – both for Ukraine and the EU.

The Great Financial Plumbing: From Northern Rock to Banking Union. CEPS Paperback, 19 October 2015

The financial and economic crises have led to an enormous plumbing exercise, involving a fundamental re-design of the global and European regulatory and supervisory system. This book systematically assesses the big items on the G-20 and EU agendas and the effectiveness with which they have been implemented in the EU. Its publication coincides with the demand by European Commissioner Jonathan Hill, in the context of the Capital Markets Union, for a 'comprehensive review' of the impact and coherence of EU legislation in the area of financial services. Karel Lannoo argues in the book that much has been done by European policy-makers to make the financial system safer and to prevent banking crises of the magnitude that erupted in 2008 and 2011, but that the new framework puts an enormous burden on banks and supervisors to implement and enforce it correctly. With the huge amount of secondary or 'level-2' legislation in place, this process has spiralled out of control, and as member states always find new ways of ‘gold-plating’ EU rules, the EU always finds further reasons to achieve a 'single rulebook'. This process has to be brought to a halt, and mutual recognition, a basic single-market principle, reinforced. The new framework also brings huge advantages, which should offer benefits to all parties. Banking Union is a huge step forward, which introduces 'one-stop shopping' for banks in the eurozone, another basic single market principle, and a true single supervisor. The clarity of the new resolution framework should, if correctly applied, trigger early intervention and bring an end to forbearance, thereby enforcing market discipline in the banking sector. It should also avoid reliance on taxpayers' money to bail-out banks in trouble, which totalled 14% of EU GDP during the crisis.

Completing the Banking Union: Deposit Insurance. CEPS Policy Brief No. 335, 3 December 2015

It is generally agreed that a Banking Union should have common or ‘single’ institutions responsible for carrying out three basic functions: supervision, resolution and deposit insurance. So far, however, agreement has been reached in the EU on only the first two of these functions. The Commission has now presented its proposal on how to complete the Banking Union with a European Deposit Insurance Scheme (EDIS). It is an innovative and courageous proposal. It is courageous because it will clearly be very controversial in a number of member states (especially Germany) and it is innovative because it proposes a three-stage process, starting with re-insurance, then switching to co-insurance and finally to full direct insurance of deposits via a ‘single’ Deposit Insurance Fund (DIF). This final stage should be reached in 2024, which is also the date at which the Single Resolution Fund (SRF) will become the only source of financing for bank resolution. The Commission’s proposal calls for integrating the decision-making for EDIS into the decision-making entity for the SRF, namely the existing Single Resolution Board (SRB). This makes sense if one views resolution and deposit insurance as two highly interlinked dimensions of dealing with banks in trouble. In this view the two dimensions should be bundled into one institution – and one suspects that over time the two funds (the SRF and the DIF) could be merged into one. This Policy Brief argues that re-insurance should not be considered as a transitory phase, but could also provide a solution for the long run. ‘Experience rating’ could be used to ensure a proper pricing of risk and to protect the interests of the depositors in countries with safer banking systems. Moreover, EDIS should have a decision-making structure separate from and independent of the SRM, since it has mainly a macroeconomic function.