Towards a new constitutional blueprint for Bosnia and Herzegovina. CEPS Commentary, 20 June 2014

Bosnia-Herzegovina's provisional constitutional system, as created by the Dayton Agreement, has outlived its purpose by more than ten years. Economic and political governance are now even more deadlocked by corruption, political recriminations and institutional failure. Fouéré and Blockmans argue the need for more robust engagement by both the EU and the US and for a constitutional convention to spur reform. This should facilitate the transition from the country’s current status as international protectorate to sustainable self-government, guided by the EU pre-accession process.

Crimean Tatars after Russia's annexation of the Crimean Peninsula. OSW Commentary No. 141, 30.06.2014

After Russia’s annexation of Crimea, Crimean Tatars face the necessity of working out a modus vivendi to cope with the difficult situation which now confronts them. On the one hand, the desire to remain in their homeland, which they regained after exile in Soviet times, is an imperative encouraging them to accept the status quo, while on the other, the fear of Russia and the strong relations of Crimean Tatar elites with Kyiv would favour opposing the present state of affairs. Another fact pointing in favour of an agreement with Moscow is that Kyiv has not attempted to defend Crimea and has not been active in demanding its return to Ukraine, which has undermined Kyiv’s authority in the eyes of the Tatars. Therefore, the leaders of the Mejlis of Crimean Tatars (the national self-government) act carefully, trying to avoid actions which could be seen as provocative and thus liable to incite retribution. It could be expected that this course of action will continue, although it faces ever greater difficulties in the context of the Russian authorities’ adoption of a strongly anti-Tatar policy, which is likely to evoke more radical attitudes among the Crimean Tatars.

Self-Fulfilling Crises in the Eurozone: An Empirical Test. CEPS Working Document No. 366, 22 June 2012

This paper tests the hypothesis that government bond markets in the eurozone are more fragile and more susceptible to self-fulfilling liquidity crises than in stand-alone countries. We find evidence that a significant part of the surge in the spreads of the PIGS countries (Portugal, Ireland, Greece and Spain) in the eurozone during 2010-11 was disconnected from underlying increases in the debt-to-GDP ratios and fiscal space variables, and was the result of negative self-fulfilling market sentiments that became very strong since the end of 2010. We argue that this can drive member countries of the eurozone into bad equilibria. We also find evidence that after years of neglecting high government debt, investors became increasingly worried about this in the eurozone, and reacted by raising the spreads. No such worries developed in stand-alone countries despite the fact that debt-to-GDP ratios and fiscal space variables were equally high and increasing in these countries.

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.

Under the veneer of decentralisation. Ukraine's modernisation efforts stall due to lack of local government reform. OSW Commentary No. 102, 2013-02-12

President Viktor Yanukovych and his Party of Regions have been repeating the pledge to decentralise power in Ukraine and to give local government a greater decision-making role ever since the party appeared on the Ukrainian political scene. The implementation of this reform is crucial both for the economic recovery of Ukraine’s regions and the overall modernisation efforts of the Ukrainian state. At present relations between central government and the regions are regulated by Soviet-era legislation that fails to address the modern-day challenges facing Ukraine. The political elite in the country, including the opposition, appear to have reached consensus on the importance of the decentralisation reform. The first attempts to implement changes in this area were made in the late 1990s, followed by a comprehensive reform programme developed between 2007 and 2009 by Yulia Tymoshenko’s government. In 2012, the Constitutional Assembly under the President of Ukraine appointed a team of experts who drafted a document detailing the reform of local government and the territorial organisation of power1. The document envisages the implementation of what effectively are two major reforms: (1) an administrative-territorial reform, which would help consolidate the fragmented administrative structure, creating larger and more economically self-sufficient administrative units, and (2) local government reform, focusing on creating clearly defined powers for local authorities with a view to securing government funding for specific tasks delegated from central government. Nonetheless, despite these measures, and in spite of the rhetoric coming from President Yanukovych and other members of the Party of Regions, it seems unlikely that the reform will be implemented in the foreseeable future. A series of concrete political decisions taken by the president over the past three years indicate that Yanukovych has not abandoned his plan to build a highly centralised political system. This in turn limits the capacity to govern of local authorities and further restricts the sources of funding for Ukraine’s regions. This apparent resistance to change stems from the fact that by implementing the proposed reforms, the president and his political allies would be forced to relinquish much of their control over the political processes taking place in the country and would have to free up the distribution of budgetary resources between Kyiv and the regions. The implementation of the reform within the specified timeframe (i.e. by 2015) is also unlikely due to the upcoming presidential election and the deteriorating economic situation in Ukraine. Without a comprehensive reform of local government, however, Ukraine will be unable to undertake effective modernisation measures, which are key for the socio-economic development of the country’s regions.

The altar and the throne alliance. The Russian Orthodox Church vs. the government in Russia. OSW STUDIES 54, 2016-01-04

The Russian Orthodox Church Moscow Patriarchate (ROC), the largest religious community in Russia, plays an essential role in the process of the cultural and national self-identification of the Russian people. Being a socio-political institution with a centuries-long history, it possesses great symbolic capital and enjoys public respect, which has been used for political purposes. Since Vladimir Putin regained the presidency in 2012, in order to strengthen the political regime in Russia the Kremlin has begun to extensively draw upon conservative ideology and promote the traditional moral and social values which the Church is viewed as the guardian of. This has resulted in establishing closer relations between the secular government and the ROC, as well as in a greater engagement of ROC hierarchs and organisations in domestic and foreign policy issues. This situation exposes the ROC to criticism for being excessively involved in politics, and in the longer term, to the risks linked to potential destabilisation of the governmental system in Russia.

The EU’s Self-Defeating Aid Policy towards Palestine. CEPS Policy Brief No. 343/May 2016

Motivated by the dual aims of strengthening the Middle East Peace Process and contributing to Palestinian state-building, the European Union and its member states have been the biggest donors of financial assistance to the Palestinians. This CEPS Policy Brief finds, however, that these efforts have not achieved the desired change, as the EU failed to develop a coherent strategy to address Israel’s violations of international humanitarian law and it has accepted practices that undermine its political objectives. Hence, the author, Brigitte Herremans, argues that the aid has not contributed to a strong Palestinian government that can contribute to the security of both Palestinian and Israeli civilians. She calls upon the EU and its member states to take more measures to ensure that aid is received by people in need and that illegal practices on the part of Israel do not hamper its effectiveness.