The European Union and global security: is the EU becoming the indispensable partner? EU Centre Singapore Background Brief No. 11, April 2014

The European Union has developed new capacity as a security actor in third countries, in particular in the area of crisis management. Over the past two decades the EU has deployed numerous missions, both of a civilian and military nature. Moreover the EU has defined its ability to intervene all along the ‘crisis cycle’, (from prevention to mediation, from peace-keeping to post-conflict reconstruction) and using all tools at its disposal (taking a ‘comprehensive approach’). However the EU is still not perceived as a major security provider globally and interventions remain limited to some geographic areas, mostly in its neighbourhood and Africa, with just a few examples further afield. The EU also tends to avoid taking direct action and seems to prefer partnership arrangements with other players. How can we explain the growing activism and number of EU’s intervention with the low impact and lack of visibility? Can we expect the EU to become more active in the future, taking on more responsibility and leading roles in addressing conflict situations? This paper will argue that the main reason for the EU’s hesitant role in crisis management is to be found in the weak decision-making provisions for EU’s security interventions, as one of the few policy areas still subject to consensus amongst 28 European Union Member States. Lack of a clearer delegation of competence or stronger coordination structures is closely linked to low legitimacy for the EU to take more robust action as a security actor. In order to overcome this legitimacy problem, and in order to facilitate consensus amongst Member States, the EU thus privileges partnership arrangements with other actors who can provide legitimacy and know-how, such as the UN or the African Union. As there is no political desire in the EU for tighter decision-making in this area, we can expect that the EU will continue to play a supporting rather than leading role in crisis management, becoming the partner of choice as it deepens its experience. However this does not mean that the EU is playing just a secondary role in the wider area of security, in particular when looking at nontraditional security. Looking at the role of the EU in Asia, where the EU has deployed just two missions, this paper will offer a broader assessment of the EU as a partner in the area of security taking into account different types of actions. The paper will argue that in order to strengthen cooperation with Asian partners in the area of crisis management, the EU will need to define better what it is able to offer, present its actions as part of an overall strategy rather than ad-hoc and piecemeal, and enter into partnership arrangements with different players in the region.

A stable Libya would close the door to Daesh. CEPS Policy Brief No. 340, March 2016

Since the fall of the Gaddafi regime in 2011, everything has seemed to conspire against the transition process in Libya. The idea of a stabilisation force has met political resistance in most European countries, because there is little appetite for long-term interventions that carry a high risk of casualties. This author argues that, among other initiatives, ground forces are nevertheless a necessary component of stabilisation in this fragile country. He makes four recommendations to guide the engagement of external actors.

An agenda for the European Council: feasible steps to bring the eurozone back from the precipice. CEPS Policy Brief No. 274, 20 June 2012

In the run-up to the emergency European Council meeting at the end of June, Stefano Micossi outlines in this Policy Brief the main elements of a realistic and yet incisive policy package, capable of reassuring financial markets and a bewildered public opinion. It is more than Germany has been willing to accept so far but much less than many of the demands it will confront at the Council meeting. More importantly, it only requires a minimum of additional disbursements by the member states, while strengthening risk-sharing for sovereign and banking risks.

Moving the EU from a Laggard to a Leader in Democracy Assistance: The Potential Role of the European Endowment for Democracy. CEPS Policy Brief No. 273, 15 June 2012

In their assessment of the proposed European Endowment for Democracy (EED), Hrant Kostanyan and Magdalena Nasieniak conclude that an instrument along the lines currently envisaged could and should take on the challenge to make the EU a truly committed, pro-active and effective leader of democracy assistance. A flexible and fast-track path of assessing needs and granting funds could become the most visible results of the EU’s assistance in this area, delivering almost immediate tangible results. They argue that the EED therefore needs to become an instrument free of nationally-driven decisions, European ‘turf wars’ and cumbersome bureaucracy.

Implementing Basel III in Europe: disgnosis and avenues for improvement. CEPS Policy Brief No. 275, 27 June 2012

This Policy Brief provides a preliminary diagnosis of the proposed regulatory reforms contained in the Capital Requirements Directive and Regulation (CRD IV-CRR), which translate into EU law the Basel III standards adopted by the Basel Committee for Banking Supervision, and suggests avenues for improvement. The main criticism is that the proposal is not ambitious enough. In some crucial areas, such as the leverage ratio and the long-term liquidity requirements adopted under the Basel III framework, the CRD IV-CRR proposal stops short of making a strict commitment to introduce binding requirements and instead is contented with weaker (and possibly divergent) disclosure requirements.

Central Banks in Times of Crisis: The FED vs. the ECB. CEPS Policy Brief No. 276, 11 July 2012,

Different economic and financial structures require different crisis responses. Different crises also require different tools and resources. The first ‘stage’ of the financial crisis (2007-09) was similar on both sides of the Atlantic, and the response was also quite similar. The second stage of the crisis is unique to the euro area. Increasing financial disintegration within the region has forced the ECB to become the central counterparty for the entire cross-border banking market and to intervene in the sovereign bond market of some stressed countries. The actions undertaken by the European Central Bank (ECB), however, have not always represented the best response, in terms of effectiveness, consistency and transparency. This is especially true for the Securities Markets Programme (SMP): by de facto imposing its absolute seniority during the Greek PSI (private sector involvement), the ECB has probably killed its future effectiveness.

Pre-empting technical barriers in the Single Market. CEPS Policy Brief No. 277, 11 July 2012

Effective enforcement and compliance with EU law is not just a legal necessity, it is also of economic interest since the potential of the Single Market will be fully exploited. Enforcement barriers generate unjustified costs and hindrances or uncertainty for cross-border business and might deprive consumers from receiving the full benefit of greater choice and/or cheaper offers. The EU has developed several types of enforcement efforts (preventive initiatives, pre-infringement initiatives and formal infringement procedures). More recently, the emphasis has been placed on effective prevention. This CEPS Policy Brief analyses the functioning of one preventive mechanism (the 98/34 Directive) and assesses its potential to detect and prevent technical or other barriers in the course of the last 25 years. Based on an empirical approach, it shows that this amazing mechanism has successfully prevented thousands of new technical barriers from arising in the internal goods market.

Unholy compromise in the eurozone and how to right it. CEPS Policy Brief No. 277, 16 July 2012

This paper reviews the causes of the ongoing crisis in the eurozone and the policies needed to restore stability in financial markets and reassure a bewildered public. Its main message is that the EU will not overcome the crisis until it has a comprehensive and convincing set of policies in place; able to address simultaneously budgetary discipline and the sovereign debt crisis, the banking crisis, adequate liquidity provision by the ECB and dismal growth. The text updates and expands on his Policy Brief contributed in the run-up to the emergency European Council meeting at the end of June.

Can Italy and Spain survive rates of 6-7%? CEPS Policy Brief No. 279, 27 July 2012

The sentiment that the euro is now in real danger is based in large part on the widespread conviction that interest rates of 6-7% are simply unsustainable for both Italy and Spain., After taking a closer look at the fundamentals, however, Daniel Gros concludes in this new Policy Brief that both countries should be able to live with this level of interest rates for quite some time, but only if they mobilize domestic savings, which remain strong in both countries. For Spain, some debt/equity swaps are also needed.

CSDP and NATO Post-Libya: Towards the Rubicon? Egmont Security Policy Brief No. 35, July 2012

In the wake of Libya and the American pivot to Asia, CSDP-NATO relations must be recalibrated. The buzz word for CSDP should be: integrated through the EU and empowered through NATO.

EU Grand Strategy: Optimism is Mandatory. Egmont Security Policy Brief No. 36, July 2012

The Arab Spring, the American pivot, and the global crisis: these affect all of EU external action, but also present opportunities for EU action. A debate on grand strategy remains necessary.

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.

Unleashing Competition in EU Business Services. CEPS Policy Brief No. 284, 24 September 2012

In most EU member states, the business services industry has booked no productivity growth during the last two decades. The industry’s performance in the other member states was weaker than that of its US counterparts. Exploring what may be causing this productivity stagnation, this policy brief reports that weak competition has contributed to the continuing malaise in European business services. The study analyzed the persistence (over time) of firm-level inefficiencies. The evidence further suggests that competition between small firms and large firms in business services is weak. Markets for business services work best in countries with flexible regulation on employment change and with low regulatory costs for firms that start up or close down a business. Countries that are more open to foreign competition perform better in terms of competitive selection and productivity. The policy simulations in this paper show that greater import openness strengthens competition in business services markets. The largest positive impact comes from lower regulatory barriers for growing and shrinking firms. More particularly, competitive selection would be fostered by a reduction of administrative and regulatory costs related to labour contracts, bankruptcy and start-up requirements. A key element of the European Commission’s Europe-2020 strategy is the Single European Market for Services. Business services form one of the largest industries in Europe – and given its productivity stagnation, it deserves to be a priority target of the Europe-2020 strategy. Improving the way the business services market functions may have large positive knock-on effects for the EU economy.

Banking Union: A Federal Model for the European Union with Prompt Corrective Action. CEPS Policy Brief No. 282, 18 September 2012

The European Commission has published its proposals for the transfer of supervisory responsibilities to the European Central Bank (ECB),1 under Article 127(6) of the TFEU, providing a comprehensive and courageous ‘first step’ towards a European banking Union, the other steps being European deposit insurance and resolution procedures. However, on a number of issues the Commission’s chosen path raises questions that should be brought out in the open and fully recognized before final deliberation by the Council.