EU Policies and Cluster Developments of Hydrogen Communities. Bruges European Economic Research (BEER) Papers 14/December 2008

This study takes on the issue of political and socio-economic conditions for the hydrogen economy as part of a future low carbon society in Europe. It is subdivided into two parts. A first part reviews the current EU policy framework in view of its impact on hydrogen and fuel cell development. In the second part an analysis of the regional dynamics and possible hydrogen and fuel cell clusters is carried out. The current EU policy framework does not hinder hydrogen development. Yet it does not constitute a strong push factor either. EU energy policies have the strongest impact on hydrogen and fuel cell development even though their potential is still underexploited. Regulatory policies have a weak but positive impact on hydrogen. EU spending policies show some inconsistencies. Regions with a high activity level in HFC also are generally innovative regions. Moreover, the article points out certain industrial clusters that favours some regions' conditions for taking part in the HFC development. However, existing hydrogen infrastructure seems to play a minor role for region's engagement. An overall well-functioning regional innovation system is important in the formative phase of an HFC innovation system, but that further research is needed before qualified policy implications can be drawn. Looking ahead the current policy framework at EU level does not set clear long term signals and lacks incentives that are strong enough to facilitate high investment in and deployment of sustainable energy technologies. The likely overall effect thus seems to be too weak to enable the EU hydrogen and fuel cell deployment strategy. According to our analysis an enhanced EU policy framework pushing for sustainability in general and the development of hydrogen and fuel cells in particular requires the following: 1) A strong EU energy policy with credible long term targets; 2) better coordination of EU policies: Europe needs a common understanding of key taxation concepts (green taxation, internalisation of externalities) and a common approach for the market introduction of new energy technologies; 3) an EU cluster policy as an attempt to better coordinate and support of European regions in their efforts to further develop HFC and to set up the respective infrastructure.

The Eurozone crisis and the erosion of democratic legitimacy: Lessons from the gold standard. ACES Cases No. 2013.3

This paper makes four propositions. First, it argues that the euro’s institutional design makes it function like the interwar gold exchange standard during periods of stress. Just like the gold exchange standard during the 1930s, the euro created a ‘core’ of surplus countries and a ‘periphery’ of deficit countries. The latter have to sacrifice their internal domestic economic equilibrium in order to restore their external equilibrium, and therefore have no choice but to respond to balance of payments crises by a series of deflationary spending, price and wage cuts. The paper’s second claim is that the euro’s institutional design and the EU’s response to its ‘sovereign debt crisis’ during 2010-13 deepened the recession in the Eurozone periphery, as EMU leaders focused almost exclusively on austerity measures and structural reforms and paid only lip service to the need to rebalance growth between North and South. As Barry Eichengreen argued in Golden Fetters, the rigidity of the gold standard contributed to the length and depth of the Great Depression during the 1930s, but also underscored the incompatibility of the system with legitimate national democratic government in places like Italy, Germany, and Spain, which is the basis for the paper’s third proposition: the euro crisis instigated a crisis of democratic government in Southern Europe underlining that democratic legitimacy still mainly resides within the borders of nation states. By adopting the euro, EMU member states gave up their ability to control major economic policy decisions, thereby damaging their domestic political legitimacy, which in turn dogged attempts to enact structural reforms. Evidence of the erosion of national democracy in the Eurozone periphery can be seen in the rise of anti-establishment parties, and the inability of traditional center-left and center-right parties to form stable governments and implement reforms. The paper’s fourth proposition is that the euro’s original design and the Eurozone sovereign debt crisis further widened the existing democratic deficit in the European Union, as manifested in rising anti-EU and anti-euro sentiment, as well as openly Eurosceptic political movements, not just in the euro periphery, but also increasingly in the euro core.