Ending uncertainty: recapitalisation under European Central Bank supervision. Bruegel Policy Contribution 2013/18, 17 December 2013

Estimates of the recapitalisation needs of the euro-area banking system vary between €50 and €600 billion. The range shows the considerable uncertainty about the quality of banks’ balance sheets and about the parameters of the forthcoming European Central Bank stress tests, including the treatment of sovereign debt and systemic risk. Uncertainty also prevails about the rules and discretion that will applyto bank recapitalisation, bank restructuring and bank resolution in 2014 and beyond. The ECB should communicate the relevant parameters of its exercise early and in detail to give time to the private sector to find solutions. The ECB should establish itself as a tough supervisor and force non-viable banks into restructuring. This could lead to short-term financial volatility, but it should be weighed against the cost of a durably weak banking system and the credibility risk to the ECB. The ECB may need to provide large amounts of liquidity to the financial system. Governments should support the ECB, accept cross-border bank mergers and substantial creditor involvement under clear bail-in rules and should be prepared to recapitalise banks. Governments should agree on the eventual creation of a single resolution mechanism with efficient and fast decision-making procedures, and which can exercise discretion where necessary. A resolution fund, even when fully built-up, needs to have a common fiscal backstop to be credible.

The Asset Quality Review and Capital Needs: Why re-capitalise banks with public money? CEPS Policy Brief No. 311, 19 December 2013

It is generally assumed that any capital needs discovered by the Asset Quality Review the ECB is scheduled to finish by the end of 2014 should be filled by public funding (= fiscal backstop). This assumption is wrong, however. Banks that do not have enough capital should be asked to obtain it from the market; or be restructured using the procedures and rules recently agreed. The Directorate-General for Competition at the European Commission should be particularly vigilant to ensure that no further state aid flows to an already oversized European banking system. The case for a public backstop was strong when the entire euro area banking system was under stress, but this is no longer the case. Banks with a viable business model can find capital; those without should be closed because any public-sector re-capitalisation would likely mean throwing good money after bad.

Unified European Front: The Road towards a European Unitary Patent. EU Centre Singapore Working Paper No. 21, March 2014

For over forty years, European countries have held numerous conferences and signed multiple international agreements aimed at either creating a unitary patent which will be valid in all European countries upon issuance or establishing a specialized European court with jurisdiction over patents. This paper first outlines the need for a unitary patent in the European Union and then chronicles the measures taken to support and milestones toward the creation of a European-wide unitary patent system. The paper then discusses the few problems and pitfalls that have prevented European countries from coming to an agreement on such a patent system. Finally, the paper considers the closely related agreements of ‘Unitary Patent Package’, the challenges facing these agreements and examines if it would finally result in an EU Unitary patent system that benefits one and all.

The Second Phase of the Common European Asylum System: A Step Forward in the Protection of Asylum Seekers? IES WORKING PAPER 7/2013

The aim of this paper is to analyse what is the impact of the second phase of the creation of the Common European Asylum System (CEAS) in the protection of rights of Asylum Seekers in the European Union. The establishment of a CEAS has been always a part of the development of the Area of Freedom, Security and Justice. Its implementation was planned in two phases: the first one, focused on the harmonisation of internal legislation on minimum common standards; the second, based on the result of an evaluation of the effectiveness of the agreed legal instruments, should improve the effectiveness of the protection granted. The five instruments adopted between 2002 and 2005, three Directives, on Qualification, Reception Conditions and Asylum Procedures, and two Regulations, the so-called “Dublin System”, were subjected to an extensive evaluation and modification, which led to the end of the recasting in 2013. The paper discusses briefly the international obligations concerning the rights of asylum seekers and continues with the presentation of the legal basis of the CEAS and its development, together with the role of the Charter of Fundamental Rights of the European Union in asylum matters. The research will then focus on the development in the protection of asylum seekers after the recasting of the legislative instruments mentioned above. The paper will note that the European standards result now improved, especially concerning the treatment of vulnerable people, the quality of the application procedure, the effectiveness of the appeal, the treatment of gender issues in decision concerning procedures and reception. However, it will be also highlighted that Member States maintained a wide margin of appreciation in many fields, which can lead to the compression of important guarantees. This margin concerns, for example, the access to free legal assistance, the definition of the material support to be granted to each applicant for international protection, the access to labour market, the application of the presumptions of the “safety” of a third country. The paper will therefore stress that the long negotiations that characterised the second phase of the CEAS undoubtedly led to some progress in the protection of Asylum Seekers in the EU. However, some provisions are still in open contrast with the international obligations concerning rights of asylum seekers, while others require to the Member State consider carefully its obligation in the choice of internal policies concerning asylum matters.

Building a Capital Markets Union….or designing a financial system for the euro area? CEPS Commentary, 2 June 2015

In this CEPS Commentary, economists Anton Brender, Florence Pisani and Daniel Gros challenge the foundation on which the European Commission launched a key debate earlier this year on the development of the EU’s financial system, with publication of its Green Paper "Building a Capital Markets Union". While acknowledging that a single capital market could be useful in the European Union, they argue that it is extremely dangerous to conduct one and the same monetary policy in an area with broadly varying financial practices and structures – as the first 15 years of the euro area's history have vividly shown. They conclude that financial integration of the countries in EMU must receive top priority in a process that the rest of the European Union may then subsequently join.