Price formation in commodities markets. Financialisation and beyond. Report of an ECMI/CEPS Task Force

This report attempts to demystify the sphere of commodities markets worldwide by providing an in-depth examination of the major commodity groups, focusing on product characteristics, supply chains, pricing, liquidity, financial intermediation, industry players and the interplay between derivatives markets and the underlying physical goods. In so doing, the report contributes to the international debate with important information about the diverse market structures across commodities, including supply and demand elasticities, concentration of ownership, infrastructure organisation and layers of financial participation. While describing the endogenous factors, it also examines the increasing role of exogenous factors now impacting commodities. Finally, it assesses the drivers of the growth of derivatives markets and their impact on price formation. This report is a draft of the final version presented at a meeting at CEPS on 9 July 2013. A final version will be uploaded at the end of the summer when the book will be available in print.

Mass Surveillance of Personal Data by EU Member States and its Compatibility with EU Law. CEPS Liberty and Security in Europe No. 61, 6 November 2013

In the wake of the disclosures surrounding PRISM and other US surveillance programmes, this paper assesses the large-scale surveillance practices by a selection of EU member states: the UK, Sweden, France, Germany and the Netherlands. Given the large-scale nature of these practices, which represent a reconfiguration of traditional intelligence gathering, the paper contends that an analysis of European surveillance programmes cannot be reduced to a question of the balance between data protection versus national security, but has to be framed in terms of collective freedoms and democracy. It finds that four of the five EU member states selected for in-depth examination are engaging in some form of large-scale interception and surveillance of communication data, and identifies parallels and discrepancies between these programmes and the NSA-run operations. The paper argues that these programmes do not stand outside the realm of EU intervention but can be analysed from an EU law perspective via i) an understanding of national security in a democratic rule of law framework where fundamental human rights and judicial oversight constitute key norms; ii) the risks posed to the internal security of the Union as a whole as well as the privacy of EU citizens as data owners and iii) the potential spillover into the activities and responsibilities of EU agencies. The paper then presents a set of policy recommendations to the European Parliament.

Paving the Way for Micro-, Small- and Medium-Sized Enterprises in the Southern Mediterranean. CEPS Policy Brief No. 314, 14 January 2014

The upheavals of the Arab Spring in the southern Mediterranean led to domestic and international demands on the governments in the region to implement reforms aimed at enhancing business and investment conditions especially for micro, small- and medium-sized enterprises (MSMEs), which carry out an overwhelming majority of the region’s economic activity. A comprehensive survey among some 600 high-growth potential MSMEs in Algeria, Egypt, Morocco and Tunisia identified and ranked the key obstacles impeding their high-growth potential. This Policy Brief summarises the main results and policy recommendations that can be drawn from this survey, which has been analysed in depth by Ayadi & De Groen (2014).

Macroeconomic and Financial Crisis Management in the Southern and Eastern Mediterranean: Diagnosis and Prospects. CEPS Paperbacks. December 2013

The global financial crisis, which started in the summer of 2007 and deepened in the aftermath of the Lehman failure in September 2008, has led to a virtual collapse in economic activity and increased financial volatility worldwide. For the developing countries, the main channel of transmission has been a drop in external transactions, such as trade, financial and capital flows, and remittances. The emerging economies in the southern and eastern Mediterranean have also faced declining economic activity, although there seems to be considerable variation in the relative magnitude and timing. Most of these economies have shown a delayed but more lasting response to the crisis, driven mostly by their close trade and investment ties with the EU and the Gulf Cooperation Council (GCC) countries. This book explores the fiscal, monetary and financial effects of the crisis in the region and provides an in-depth analysis of the fiscal, monetary and banking policies in the post-crisis era, the viability of their exit strategies and the future of reforms in the region. These analyses not only provide a comprehensive comparison between the countries but also provide a solid basis for assessing future economic and financial developments and reforms in the region.

The Europe 2020 Strategy: Can it maintain the EU’s competitiveness in the world? CEPS Paperbacks. September 2012

Launched in March 2010 by the European Commission, the Europe 2020 strategy aims at achieving “smart, sustainable and inclusive” growth. This growth is intended to be driven by three sets of engines: knowledge and innovation, a greener and more efficient use of resources and higher employment combined with social and territorial cohesion. This CEPS report takes an in-depth look at the Europe 2020 strategy and the goals it sets for the EU, with the aim of shedding light on the question of whether the strategy will succeed in fostering the global competitiveness of the European Union. While finding that the Europe 2020 strategy identifies the right key indicators for its targets, the authors advise that it should be revised in several important respects and conclude with relevant policy steps to foster the future capability of European economies and their prosperity.

Flexibility clauses in the Stability and Growth Pact: No need for revision. CEPS Policy Brief No. 319, 24 July 2014

This Policy Brief offers an in-depth review of the Stability and Growth Pact (SGP) and looks at whether the margins of flexibility within existing rules are sufficient in the current climate of low growth, or whether there is a need to broaden them. The issue is especially relevant as the changing economic environment is raising fresh questions about whether the EU’s current common economic policies are able to manage dismal growth and low inflation. The fragile state of confidence in financial markets and the unresolved but inevitable questions of moral hazard linked to lax fiscal policies mean that no large-scale fiscal expansion to support the recovery of economic activity is feasible. The discussion may therefore only concern the scope within the SGP to accommodate an unexpected drop in economic activity and to provide room for the implementation of structural reforms. Here, we analyse the flexibility clauses of the Stability and Growth Pact under three headings; namely “exceptional circumstances”, “structural reforms and other relevant factors”, and the “investment clause”. Recommendation: Our main conclusion is that the SGP contains sufficient flexibility to accommodate an unexpected drop in economic activity and has the margins needed to finance structural reforms during the transition to the new regime. We therefore see no need to change the existing rules of the SGP. We believe that the ongoing debate about a fresh growth strategy for the eurozone and the European Union would greatly benefit from removing from the Council table ill-formulated and unnecessary demands for greater flexibility in the SGP.

A Strong Europe in a Globalized World: From the Hungarian to the Polish presidency of the Council of the European Union. ACES Working Papers, 2011

On June 17, 2011, the Center for Transatlantic Relations – together with the Center for European Policy Analysis, the Polish Institute of International Affairs in Warsaw, and the Embassies of Hungary and Poland – hosted authors writing on the theme “A Strong Europe in a Globalized World,” and who offered in-depth, substantive reflections about how the United States and Europe can work together more closely in meeting global challenges. Drawing on the agendas of the outgoing and incoming EU Presidencies of the Council of the European Union – Hungary and Poland respectively – authors focused on the importance of a strong US-EU partnership in the face of mounting global challenges, from the current financial and economic crisis through the insecurities of energy markets and the promise of the Arab Spring. Authors explored in depth four key areas of shared interests: A Global Perspective (Transatlantic Partnership in a Globalized World); Achievements and Deliverables of Eastern Partnership; Euro-Atlantic Perspectives for the Balkans; and Common Challenges of Energy Security. Senior Hungarian and Polish government officials, subject matter experts, private sector actors, and think tank scholars participated.

The Baltic states’ Territorial Defence Forces in the face of hybrid threats. OSW Commentary Number 165, 19.03.2015

From the Introduction. Russia’s annexation of Crimea and its aggression in eastern Ukraine have triggered a debate about the main directions of defence policy in the Nordic and Baltic region. In the Baltic states, but also in the Nordic countries and Poland, much attention is being paid to questions of Territorial Defence Forces (TDF). TDF are viewed as one of the elements in the national defence systems’ response during the early stages of a hybrid conflict. The Baltic states have decided to adapt their Territorial Defence Forces to new threats by making a number of changes to their functioning, depending on the local conditions in each case. Given the growing uncertainty in the region, they have opted not to undertake any in-depth reforms of TDF at this stage, as that could entail a temporary disorganisation in the armed forces. In the coming years Estonia, Latvia and Lithuania will invest in increasing the size and combat readiness of their Territorial Defence Forces, providing them with better training and equipment, and creating a system of incentives to encourage more people to serve in volunteer formations.