Does All Fit One Size? An evaluation of the ECB policy response to changing economic conditions in the Euro area member states. ACES Cases No. 2008.1

This paper empirically investigates the extent to which the European Central Bank has responded to evolving economic conditions in its member states as opposed to the euro area as a whole. Based on a forward-looking Taylor rule-type policy reaction function, we conduct counterfactual exercises that compare the monetary policy behavior of the ECB with two alternative hypothetical scenarios: (1) were the euro member states to make individual policy decisions, and (2) were the ECB to respond to the economic conditions of individual members. The results reflect the extent of heterogeneity among the national economies in the monetary union and indicate that the ECB's monetary policy rates have been particularly close to the "counterfactual" interest rates of its largest euro members, as well as of countries with similar economic conditions, which includes Germany, Austria, Belgium and France.

Banking Union with a Sovereign Virus. The self-serving regulatory treatment of sovereign debt in the euro area. CEPS Policy Brief No. 289, 27 March 2013

In many eurozone countries, domestic banks often hold more than 20% of domestic public debt, which is an unsatisfactory situation given that banks are highly leveraged and that sovereign debt is inherently subject to default risk within the euro area. This paper by Daniel Gros finds, however, that the relative concentration of public debt on bank balance sheets is not just a result of the euro crisis, for there are strong additional incentives for banks in some countries to increase their sovereign. His contribution discusses a number of these regulatory incentives – the most important of which is specific to the euro area – and explores ways in which euro area banks can be weaned from massive investments in government bonds.

The Path to European Integration: A Historical Institutionalist Perspective, CES Germany & Europe Working Papers, No. 05.2, 25 October 1994

Many European and American observers of the EC have criticized "intergovemmentalist" ac­ counts for exaggerating the extent of member state control over the process of European integra­ tion. This essay seeks to ground these criticisms in a "historical institutionalist" account that stresses the need to study European integration as a political process which unfolds over time. Such a perspective highlights the limits of member-state control over long-term institutional de­ velopment, due to preoccupation with shorHerm concerns, the ubiquity of unintended conse­ quences, and processes that "lock in" past decusions and make reassertions of member-state control difficult. Brief examination of the evolution of social policy in the EC suggests the limita­ tions of treating the EC as an international regime facilitating collective action among essentially sovereign states. It is ore useful to view integration as a "path-dependent" process that has pro­ duced a fragmented but still discernible "multitiered" European polity.

The Dangers and Inanity of (Euro-) Nationalism: From Communitarianism to Cosmopolitanism. Egmont Paper No. 77, April 2015

INTRODUCTION In the current times of multifaceted crisis, nationalism looks, more than ever, like a positive and necessary feeling. It seems both natural and indispensable if we are to have viable political and social institutions that meet the needs and preferences of all citizens. The following paper contests this vision. Its criticism of nationalism is directed not only at its national forms, but also at any defence of collective identity based on the same model, such as the various forms of European nationalism. Furthermore, the same overriding criticism can be made of different kinds of nationalism, regardless of their more or less open and progressive political content. In order to ground our argument theoretically and practically, we will try to show that nationalism is always potentially harmful to individual rights, and unnecessary for the maintenance of a just social and political system. We will thus oppose any acritical defence of the intrinsic value of a specific community and the belief in its artificial homogeneity. The historical construction of a supposedly homogeneous community, and the insistence on its values, which are perceived as superior and binding, facilitate the absorption of the individual into the collective. As we will explain further in more details, this holistic approach is typical of communitarian approaches. In that respect, it does not really matter whether they appeal to passion or to reason, to some irrational binding features of the community or to more rational political aspects of a common identity. The main problem in nationalism is not the emotion it can trigger, it is not even its reliance on particular values. What makes nationalism problematic is, firstly, that it tends to overlook the intrinsically divisive and contradictory nature of individual and collective interests in unjust societies; secondly, that it attributes an intrinsic superiority to a particular community over others; and thirdly, that it sees politics as a means to promote the interests, values or identity of that community. As an alternative, we will very briefly advocate a cosmopolitan approach that grounds political legitimacy in a demanding approach to individual freedom, rather than in a shared collective identity. However, even if only briefly, we will also carefully distinguish our own vision of cosmopolitanism from those commonly put forward. Frequently, cosmopolitan perspectives entangle their identity frameworks with concrete political projects, without clearly explaining how the latter derive from the former. Our approach to cosmopolitanism, on the other hand, is, first and foremost, a critical vision of all communitarian postulates according to which politics should be based on some form of collective identity. Thus, we insist on the conceptual distinction between a general stance on identity issues and the more practical political ideology one stands for. In a subsequent step, we link this cosmopolitan framework with a progressive approach to individual rights. Because of our demanding approach to individual freedom, our cosmopolitanism goes hand in hand with a revival of identity-free sovereignty. It is therefore distinct from the severe condemnation of sovereignty often found in most mainstream cosmopolitan positions. Finally, instead of the frequent confusion found in public discourses and in the literature between ideals and reality, our position acknowledges the deep gulf separating these two dimensions. It therefore sketches out very general strategic principles to bring normative ideals closer to political reality.

Economic Policy Coordination in the Euro Area under the European Semester. CEPS Special Report No. 123, December 2015

The implementation record of the Country Specific Recommendations (CSRs) has declined over time, as financial turbulence lessened and the economic outlook started to improve. Urgency for reforms seemingly receded to leave room to request member states to move towards more accommodative stances. It is mainly the small countries that implement, at least partially, the recommendations addressed to them. Unfortunately, there is little that the EU can do to change the status quo. Yet, the President of the Eurogroup could be held accountable for the implementation of the recommendations addressed to the euro area. The creation of National Competitiveness Boards risks making the European Semester even more complex and likely to have little impact in the countries that need them most, namely large countries and those with poor governance. To make it effective, a procedure would be needed to make national wage norms consistent at the euro-area level, which may be a very difficult objective to achieve.