Changing cultural clusters: A research note. ACES Working Papers, August 2009

The purpose of this research note is to investigate the changing cultural clusters that emerged between the studies of Hofstede (1970s) and GLOBE (1990s) using similar measures and overlapping countries. Our study analyzes the world's cultural clusters using two seminal and comparable cultural classifications: Hofstede and GLOBE. Four common cultural dimensions are empirically examined: individualism, power distance, uncertainty avoidance, and masculinity. We use two leading methods from cluster analysis and display data in both dandrograms and pie chart forms showing the grouping of countries. Our results suggest diverging cultural typologies that transcend geography, language, and religion. Countries are engaged in selective cultural borrowing that leads to new and changing global cultural structures.

An international study on the impact of cultural factors on the prevalence of family-owned firms. ACES Working Papers, August 2010

A key question in international corporate governance is why certain in ownership types are prevalent in different countries around the world (La Prota et al., 1999). In this study, we provide an answer for the prevalence of the family-owned firms in 42 countries by examining key characteristics of culture. We show that family-ownership is positively correlated with power distance (PD), in-group collectivism (CI) and, insignificantly, with uncertainty avoidance (UA). Our study makes a contribution to the field since previous research used religion and language as umbrella constructs for culture, while we pinpoint specific cultural dimensions.

Ending uncertainty: recapitalisation under European Central Bank supervision. Bruegel Policy Contribution 2013/18, 17 December 2013

Estimates of the recapitalisation needs of the euro-area banking system vary between €50 and €600 billion. The range shows the considerable uncertainty about the quality of banks’ balance sheets and about the parameters of the forthcoming European Central Bank stress tests, including the treatment of sovereign debt and systemic risk. Uncertainty also prevails about the rules and discretion that will applyto bank recapitalisation, bank restructuring and bank resolution in 2014 and beyond. The ECB should communicate the relevant parameters of its exercise early and in detail to give time to the private sector to find solutions. The ECB should establish itself as a tough supervisor and force non-viable banks into restructuring. This could lead to short-term financial volatility, but it should be weighed against the cost of a durably weak banking system and the credibility risk to the ECB. The ECB may need to provide large amounts of liquidity to the financial system. Governments should support the ECB, accept cross-border bank mergers and substantial creditor involvement under clear bail-in rules and should be prepared to recapitalise banks. Governments should agree on the eventual creation of a single resolution mechanism with efficient and fast decision-making procedures, and which can exercise discretion where necessary. A resolution fund, even when fully built-up, needs to have a common fiscal backstop to be credible.

Renewables: The great uncertainty of the EU energy strategy. Egmont Paper No. 71, November 2014

Summary. For more than two decades, the development of renewable energy sources (RES) has been an important aim of EU energy policy. It accelerated with the adoption of a 1997 White Paper and the setting a decade later of a 20% renewable energy target, to be reached by 2020. The EU counts on renewable energy for multiple purposes: to diversify its energy supply; to increase its security of supply; and to create new industries, jobs, economic growth and export opportunities, while at the same time reducing greenhouse gas (GHG) emissions. Many expectations rest on its development. Fossil fuels have been critical to the development of industrial nations, including EU Member States, which are now deeply reliant upon coal, oil and gas for nearly every aspect of their existence. Faced with some hard truths, however, the Member States have begun to shelve fossil fuel. These hard truths are as follows: firstly, fossil fuels are a finite resource, sometimes difficult to extract. This means that, at some point, fossil fuels are going to be more difficult to access in Europe or too expensive to use.1 The problem is that you cannot just stop using fossil fuels when they become too expensive; the existing infrastructure is profoundly reliant on fossil fuels. It is thus almost normal that a fierce resistance to change exists. Secondly, fossil fuels contribute to climate change. They emit GHG, which contribute greatly to climate change. As a consequence, their use needs to be drastically reduced. Thirdly, Member States are currently suffering a decline in their own fossil fuel production. This increases their dependence on increasingly costly fossil fuel imports from increasingly unstable countries. This problem is compounded by global developments: the growing share of emerging economies in global energy demand (in particular China and India but also the Middle East) and the development of unconventional oil and gas production in the United States. All these elements endanger the competitiveness of Member States’ economies and their security of supply. Therefore, new indigenous sources of energy and a diversification of energy suppliers and routes to convey energy need to be found. To solve all these challenges, in 2008 the EU put in place a strategy based on three objectives: sustainability (reduction of GHG), competitiveness and security of supply. The adoption of a renewable energy policy was considered essential for reaching these three strategic objectives. The adoption of the 20% renewable energy target has undeniably had a positive effect in the EU on the growth in renewables, with the result that renewable energy sources are steadily increasing their presence in the EU energy mix. They are now, it can be said, an integral part of the EU energy system. However, the necessity of reaching this 20% renewable energy target in 2020, combined with other circumstances, has also engendered in many Member States a certain number of difficulties, creating uncertainties for investors and postponing benefits for consumers. The electricity sector is the clearest example of this downside. Subsidies have become extremely abundant and vary from one Member State to another, compromising both fair competition and single market. Networks encountered many difficulties to develop and adapt. With technological progress these subsidies have also become quite excessive. The growing impact of renewable electricity fluctuations has made some traditional power plants unprofitable and created disincentives for new investments. The EU does clearly need to reassess its strategy. If it repeats the 2008 measures it will risk to provoke increased instability and costs.

The Politics of Budget Consolidation in Britain and Germany: the Impact of Blame-Avoidance Opportunities. CES Germany & Europe Working Papers, No. 05.2, 2005

According to parts of the literature, blame avoidance opportunities, i.e. the necessity and applicability of blame avoidance strategies, may differ among countries according to the respective institutional set-ups and between governing parties according to their programmatic orientation. In countries with many veto actors, a strategy of "Institutional Cooperation" among these actors is expected to diffuse blame sufficiently to render other blame avoidance strategies obsolete. In contrast, governments in Westminster democracies should resort to the more unilateral strategies of presentation, policy design and timing. At the same time, parties of the left are expected to have an easier time implementing spending cuts while right parties are less vulnerable when proposing tax increases. Evidence from the politics of budget consolidation in Britain and Germany does not corroborate these hypotheses. Instead, it seems that party competition conditions the effects institutions and the partisan complexion of governments have on the politics of blame avoidance.

Balancing realism and vision - The prospects of EU-Israel relations in times of change and uncertainty. European Policy Brief, 28 May 2015

In this joint EPC-FSD Policy Brief, Andrea Frontini and Eran Etzion assess the state of play and the future prospects of EU-Israel relations in the light of recent domestic and regional political developments. They argue that, despite frequent cacophony and recurring stalemates, the EU-Israel partnership still has the potential to pursue shared strategic objectives. The two sides have to realign their relations, taking into account new realities and common challenges in the Middle East and Northern Africa region, and the current state of the Middle East Peace Process. More careful differentiation and stronger prioritisation of the policy dossiers at stake are urgently needed. An autonomous but joined up review of the overall relationship, guided by courage, pragmatism and stronger strategic direction, is crucial in order to move ahead.

Exit from Brexit? Not likely but uncertainty prevails. EPC Commentary, 12 July 2016

Theresa May, who is set to become UK Prime Minister on Wednesday, has made it clear that “Brexit means Brexit”. Stating this so bluntly has become necessary as a number of voices have speculated that there may be a way back from the brink, claiming that the result of the referendum is not very decisive and that citizens have been misled by the lies of the Brexit campaign, not realising the magnitude of the decision. There certainly seems a wish in the Chancellery in Berlin and in some other capitals that Britain can be kept in, accompanied by a willingness to table compromises to smooth the process.