How to withdraw from the European Union? Confronting hard reality. CEPS Commentary, 16 January 2013

As David Cameron prepares to deliver his momentous “Europe” speech, Adam Łazowski warns the British Prime Minister that a divorce from the EU will not be easy and that the decision should be based on a very thorough political, economic and legal analysis, as the consequences in all possible respects will be profound.

Juncker’s Mission to the New Energy Team: Avoiding the hard choices. CEPS Commentary, 24 September 2014

In his mission letter to Arias Cañete, Jean-Claude Juncker asked the designated Commissioner for Climate Action and Energy to focus on further developing EU policy for renewables in order to “be a world leader in this sector” and on promoting the EU Emissions Trading System “to ensure that we reach our climate goals in a cost-effective way”. Furthermore, he would like Alenka Bratušek, the designated Vice-President for Energy Union, to focus on “completing the internal energy market” and on “increasing competition”. In assessing the feasibility and desirability of this remit, this commentary finds these objectives to be very ambitious but more importantly, partially conflicting, given the state of play in EU energy markets.

The Transatlantic Trade and Investment Partnership: A long hard road to multilateralism? EPC Commentary, 26 September 2014

The seventh round of the Transatlantic Trade and Investment Partnership (TTIP) negotiations between the European Union and the United States will take place in Washington on 29 September. If concluded successfully, the TTIP would become the world’s largest free trade pact. The EU and the US account for nearly half of the world’s GDP and 30% of world trade with exchanges of goods and services worth around €723 billion a year and €1.8 billion a day. The Partnership, unprecedented in its scope and ambition, has generated great expectations which will be hard to meet in reality. It could however have a beneficial effect on trade multilateralism, provided that it is the result of an open negotiating process.

Russia in Serbia – soft power and hard interests. OSW COMMENTARY No. 150, 2014-10-29

Russian President Vladimir Putin’s visit to Serbia on 16 October has demonstrated Moscow’s willingness to secure its interests in the Balkans and use Belgrade in its confrontation with the West. It seems, however, that Russia does not have much to offer to Serbia’s authorities, which are reluctant to make more concessions towards Russia. However, Moscow has already gained a strong position in Serbia, which is due to the country’s dependence on Russian natural resources and, in particular, strong support for Russian policy on the part of Serbian elites and society. The traditional pro-Russian attitudes have been strengthened as a result of a series of Russia-inspired, wide-ranging soft power initiatives which have proved so successful that a large part of society has begun to believe that Russia’s interests are consistent with Serbia’s. Russia’s increasingly active policy towards Serbia and the Serbian minorities in the neighbouring countries – Bosnia and Herzegovina, Montenegro and Kosovo – has been part of a larger plan aimed at hampering the integration of the Balkan states with the Euro-Atlantic structures and maintaining an area of instability and frozen conflicts in the EU’s near neighbourhood. Russia’s policy is also becoming increasingly effective due to the EU states’ diminishing support for Balkan countries’ European integration.

The fiscal compact - Europe's "hard core" based on German economic conditions. OSW Commentary No. 71, 2012-03-07

On 2 March, the leaders of 25 EU member states signed the Treaty on stability, coordination and governance in the economic and monetary union. It will introduce new fiscal constraints and officially vest new competences in the eurozone countries. Thus, their right to coordinate economic policy among them will be sanctioned. So far, the Lisbon Treaty has only provided for organisation of informal Eurogroup meetings, to be attended by representatives of the European Commission. The principles introduced by the compact, if the eurozone countries are really determined to observe its provisions, will create a new way of managing the single currency. Within the next few years, the most indebted countries will have to carry out radical reforms to boost their competitiveness and adjust it to German standards. During this period the Federal Republic of Germany will most probably decide to offer higher loan guarantees to relieve these countries’ budgets. The compact’s political consequences are also of great significance, especially considering how the treaty was finalised. The eurozone states have in fact accepted that the direction for changes will be devised by France and Germany, and the role of European institutions such as the Commission or the Parliament may weaken. From the perspective of eurozone candidate countries, the introduction of the fiscal compact means expanding the scope of conditions they must meet to become members of the single currency area. In the future, a country, in order to adopt the single currency, will have to meet the structural deficit criterion, and also most probably carry out economic reforms such as unifying its fiscal system. These goals will be achieved across the eurozone gradually, in the subsequent stages of the economic governance reform.

The Standard of Proof in EC Merger Control-Conclusions from the Sony BMG Saga. IES WORKING PAPER 4/2008

One of the most important developments in EC competition policy during 2006 was the Court of First Instance’s (CFI) Impala v. Commission judgment annulling the European Commission’s approval of the merger between the music units of Sony and Bertelsmann. It harshly criticized the Commission’s Decision because it found that the evidence relied on was not capable of substantiating the conclusion. This was the first time that a merger decision was annulled for not meeting the requisite legal standard for authorizing the merger. Consequently, the CFI raised fundamental questions about the standard of proof incumbent on the Commission in its merger review procedures. On July 10, 2008, the European Court of Justice overturned Impala, yet it did not resolve the fundamental question underlying the judicial review of the Sony BMG Decision; does the Commission have the necessary resources and expertise to meet the Community Court’s standard of proof? This paper addresses the wider implications of the Sony BMG saga for the Commission’s future handling of complex merger investigations. It argues that the Commission may have set itself an impossible precedent in the second approval of the merger. While the Commission has made a substantial attempt to meet the high standard of proof imposed by the Community Courts, it is doubtful that it will be able to jump the fence again in a similar fashion under normal procedural circumstances.

State Aid and Public Service Broadcasting How Future-proof is the Remit of Public Broadcasting Organisations? IES WORKING PAPER 1/2009

The European Commission’s interference through state aid rules with the Member States’ support for public service broadcasting is not undisputed. Member States, public broadcasters and numerous academics fear that State aid control might limit the public service remit and, hence, the multi-platform and holistic role of public broadcasters in the converging media industries. This paper assesses to what extent the fear for Commission intervention is, indeed, justified. It starts with the assumption that the transformation from public service broadcasting to public service media is vital for the European democratic society. The paper leads to the observation that, in fact, European State aid policy might contribute to such a necessary and urgent transformation, instead of threatening it. The paper consists of three main parts. Firstly, the legal constraints and margins of the Community’s State aid framework are discussed. Secondly, the application of the rules to a selection of public broadcasting cases is analyzed. Finally, some conclusions are drawn from the analysis.

An Assessment of the Penalties System for Infringements of EU Competition Law: Can Personal Sanctions be the Missing Piece of the Puzzle? IES WORKING PAPER 6/2013

Competition law seeks to protect competition on the market as a means of enhancing consumer welfare and of ensuring an efficient allocation of resources. In order to be successful, therefore, competition authorities should be adequately equipped and have at their disposal all necessary enforcement tools. However, at the EU level the current enforcement system of competition rules allows only for the imposition of administrative fines by the European Commission to liable undertakings. The main objectives, in turn, of an enforcement policy based on financial penalties are two fold: to impose sanctions on infringing undertakings which reflect the seriousness of the violation, and to ensure that the risk of penalties will deter both the infringing undertakings (often referred to as 'specific deterrence') and other undertakings that may be considering anti-competitive activities from engaging in them (often referred to as 'general deterrence'). In all circumstances, it is important to ensure that pecuniary sanctions imposed on infringing undertakings are proportionate and not excessive. Although pecuniary sanctions against infringing undertakings are a crucial part of the arsenal needed to deter competition law violations, they may not be sufficient. One alternative option in that regard is the strategic use of sanctions against the individuals involved in, or responsible for, the infringements. Sanctions against individuals are documented to focus the minds of directors and employees to comply with competition rules as they themselves, in addition to the undertakings in which they are employed, are at risk of infringements. Individual criminal penalties, including custodial sanctions, have been in fact adopted by almost half of the EU Member States. This is a powerful tool but is also limited in scope and hard to implement in practice mostly due to the high standards of proof required and the political consensus that needs first to be built. Administrative sanctions for individuals, on the other hand, promise to deliver up to a certain extent the same beneficial results as criminal sanctions whilst at the same time their adoption is not likely to meet strong opposition and their implementation in practice can be both efficient and effective. Directors’ disqualification, in particular, provides a strong individual incentive for each member, or prospective member, of the Board as well as other senior executives, to take compliance with competition law seriously. It is a flexible and promising tool that if added to the arsenal of the European Commission could bring balance to the current sanctioning system and that, in turn, would in all likelihood make the enforcement of EU competition rules more effective. Therefore, it is submitted that a competition law regime in order to be effective should be able to deliver policy objectives through a variety of tools, not simply by imposing significant pecuniary sanctions to infringing undertakings. It is also clear that individual sanctions, mostly of an administrative nature, are likely to play an increasingly important role as they focus the minds of those in business who might otherwise be inclined to regard infringing the law as a matter of corporate risk rather than of personal risk. At the EU level, in particular, the adoption of directors’ disqualification promises to deliver more effective compliance and greater overall economic impact.

TTIP’s Hard Core: Technical barriers to trade and standards. Paper No. 13 in the CEPS-CTR project ‘TTIP in the Balance’ and CEPS Special Report No. 117/August 2015

Michelle Egan and Jacques Pelkmans provide an overview of the TBT chapter in TTIP and the various issues between the US and the EU in this area, which in turn requires extensive expositions of domestic regulation in the US and the EU. TBTs, outside heavily regulated sectors such as chemicals, automobiles or medicines (which have separate chapters in TTIP), can be caused by divergent (voluntary) standards, technical regulations and conformity assessment. Indeed, in all three the US and the EU have long experienced frictions with considerable trading costs. The 1998 Mutual Recognition Agreement about conformity assessment only succeeded in two out of six sectors. The US and European standardisation traditions differ and this paper explains why it is so hard, also economically, to realise convergence. However, the authors reject the unproductive ‘stand-off’ between US and EU negotiators on standardisation and suggest to clarify the enormous economic ‘installed base’ of prominent US standards in the world economy and build a solution from there. As to technical regulation, the prospect of converging regulation (via harmonisation) is often dim, but equivalence (given similar levels of regulatory protection) can be an option.

China's Confidence Issue: Hard or Smart Landing - What Can We Expect? Asia Policy Brief 2015/03, November 2015

A China whose economy is growing at a slower pace is something the world can cope with. But a China with doubts about whether the government can maintain control and implement reform – that would be a serious problem. The signals currently coming from the economic and political spheres are cause for concern. China is in danger of falling into a downward spiral of declining confidence. What are the consequences for Germany?

Soft or hard Brexit? EPC Commentary, 15 July 2016

The EU is in uncharted waters when it comes to negotiating the UK’s exit from the Union. Creative and flexible thinking will be required from all parties if an orderly departure is to be managed. The alternative is a fractious, mutually damaging and disorderly Brexit. This commentary argues for a short-term, time-limited agreement to stabilise the EU-UK relationship and to allow breathing space to develop the terms of a long-term strategic partnership.