Rapid deployment forces : policy and budgetary implications.

Item 1005-C

Unholy compromise in the eurozone and how to right it. CEPS Policy Brief No. 277, 16 July 2012

This paper reviews the causes of the ongoing crisis in the eurozone and the policies needed to restore stability in financial markets and reassure a bewildered public. Its main message is that the EU will not overcome the crisis until it has a comprehensive and convincing set of policies in place; able to address simultaneously budgetary discipline and the sovereign debt crisis, the banking crisis, adequate liquidity provision by the ECB and dismal growth. The text updates and expands on his Policy Brief contributed in the run-up to the emergency European Council meeting at the end of June.

Options for a Euro-area fiscal capacity. Bruegel Policy Brief 2013/01, January 2013

Europe has responded to the crisis with strengthened budgetary and macroeconomic surveillance, the creation of the European Stability Mechanism, liquidity provisioning by resilient economies and the European Central Bank and a process towards a banking union. However, a monetary union requires some form of budget for fiscal stabilisation in case of shocks, and as a backstop to the banking union. This paper compares four quantitatively different schemes of fiscal stabilisation and proposes a new scheme based on GDP-indexed bonds. The options considered are: (i) A federal budget with unemployment and corporate taxes shifted to euro-area level; (ii) a support scheme based on deviations from potential output;(iii) an insurance scheme via which governments would issue bonds indexed to GDP, and (iv) a scheme in which access to jointly guaranteed borrowing is combined with gradual withdrawal of fiscal sovereignty. Our comparison is based on strong assumptions. We carry out a preliminary, limited simulation of how the debt-to-GDP ratio would have developed between 2008-14 under the four schemes for Greece, Ireland, Portugal, Spain and an ‘average’ country.The schemes have varying implications in each case for debt sustainability

Major macroeconomic disturbances, expectations and policy responses

Includes bibliography

Fiscal policy and social protection in Chile

Includes bibliography

The EU Policy on Institutional Multilingualism: Between Principles and Practicality

This article brings to light several inconsistencies within the narrative of the EU policy on institutional multilingualism. The EU has invoked fundamental EU principles of democracy, equality and transparent government, to publically bolster the need for its institutions to communicate and operate in the languages of its citizens. However, these principles do not allow for the pragmatic and budgetary arguments that the EU uses to justify the in reality limited number of official and de facto working languages of its institutions. The article argues that this disagreement could be resolved if the narrative of the EU's language policy would include the objective that all European citizens master any of the languages that the EU institutions use. In that light, the article recommends that further research is done into the question whether the EU should accept or even encourage the spontaneous development of English as a de facto pan-European lingua franca.

A comparative state policy analysis of the adoption of birth defects surveillance legislation

Birth defects are the leading cause of infant mortality in the United States and are a major cause of lifetime disability. However, efforts to understand their causes have been hampered by a lack of population-specific data. During 1990–2004, 22 state legislatures responded to this need by proposing birth defects surveillance legislation (BDSL). The contrast between these states and those that did not pass BDSL provides an opportunity to better understand conditions associated with US public health policy diffusion. ^ This study identifies key state-specific determinants that predict: (1) the introduction of birth defects surveillance legislation (BDSL) onto states' formal legislative agenda, and (2) the successful adoption of these laws. Secondary aims were to interpret these findings in a theoretically sound framework and to incorporate evidence from three analytical approaches. ^ The study begins with a comparative case study of Texas and Oregon (states with divergent BDSL outcomes), including a review of historical documentation and content analysis of key informant interviews. After selecting and operationalizing explanatory variables suggested by the case study, Qualitative Comparative Analysis (QCA) was applied to publically available data to describe important patterns of variation among 37 states. Results from logistic regression were compared to determine whether the two methods produced consistent findings. ^ Themes emerging from the comparative case study included differing budgetary conditions and the significance of relationships within policy issue networks. However, the QCA and statistical analysis pointed to the importance of political parties and contrasting societal contexts. Notably, state policies that allow greater access to citizen-driven ballot initiatives were consistently associated with lower likelihood of introducing BDSL. ^ Methodologically, these results indicate that a case study approach, while important for eliciting valuable context-specific detail, may fail to detect the influence of overarching, systemic variables, such as party competition. However, QCA and statistical analyses were limited by a lack of existing data to operationalize policy issue networks, and thus may have downplayed the impact of personal interactions. ^ This study contributes to the field of health policy studies in three ways. First, it emphasizes the importance of collegial and consistent relationships among policy issue network members. Second, it calls attention to political party systems in predicting policy outcomes. Finally, a novel approach to interpreting state data in a theoretically significant manner (QCA) has been demonstrated.^

Economic Policy Coordination in the Economic and Monetary Union: From Maastricht via the SGP to the Fiscal Pact. CEPS Working Document No. 381, August 2013

This paper first takes a step backwards with an attempt to situate the recent adoption of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union in the context of discussions on the Stability and Growth Pact (SGP) and the ‘Maastricht criteria’, as fixed in the Maastricht Treaty for membership in the Economic and Monetary Union (EMU) in a longer perspective of the sharing of competences for macroeconomic policy-making within the EU. It then presents the main features of the new so-called ‘Fiscal Compact’ and its relationship to the SGP and draws some conclusions as regards the importance and relevance of this new step in the process of economic policy coordination. It concludes that the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union does not seem to offer a definitive solution to the problem of finding the appropriate budgetary-monetary policy mix in EMU, which was already well identified in the Delors report in 1989 and regularly emphasised ever since and is now seriously aggravated due to the crisis in the eurozone. Furthermore, implementation of this Treaty may under certain circumstances contribute to an increase in the uncertainties as regards the distribution of the competences between the European Parliament and national parliaments and between the former and the Commission and the Council.

The EU’s Economic Policy Architecture after Ratification of the Fiscal Stability Treaty. CEPS Commentary, 30 August 2013

In his presentation of the new Fiscal Stability Treaty, which came into force in January 2013, Jørgen Mortensen questions the extent to which the new inter-governmental agreement can be expected to solve the fundamental problem of consistency between budgetary and monetary policy.

The long haul: managing exit from financial assistance. Bruegel Policy Contribution Issue 2014/03, 20 February 2014

Countries can make a clean exit from financial assistance, or enter a new programme or a precautionary programme, depending on the sustainability of their public debt and their vulnerability to shocks. Ireland made a clean exit in December 2013, supported by significant budgetary and current-account adjustment and signs of economic recovery. But Irish debt sustainability is not guaranteed and prudence will be needed to avoid future difficulties. A clean exit for Portugal is not recommended when its programme ends in May 2014, because compared to Ireland it faces higher interest rates, has poorer growth prospects and has probably less ability to generate a consistently high primary surplus. A precautionary arrangement would be advisable. In case debt sustainability proves difficult to achieve later, some form of debt restructuring may prove necessary. It is unlikely that Greece will be able to exit its programme in December 2014. A third programme should be put in place to take Greece out of the market until 2030, accompanied by enhanced budgetary and structural reform commitments by Greece, a European boost to economic growth in the euro-area periphery and willingness on the part of lenders to reduce loan charges below their borrowing costs, should public debt levels prove unsustainable despite Greece meeting the loan conditions. Even assuming all goes well, the three countries will be subject to enhanced post-pro-gramme surveillance for decades. Managing such long-term relationships will be a key challenge.

The policy dilemma of the unitary patent. Bruegel Working Paper 2014/13, 27 November 2014

This paper provides new evidence about the budgetary consequences – for patent offices – of the coexistence of the forthcoming Unitary Patent (UP) with the current European Patent (EP). Simulation results illustrate a dilemma between (1) high UP renewal fees to ensure enough financial income for all national patent offices (NPOs) and (2) low UP renewal fees to make the UP system affordable, with very few NPOs losing on financial revenues. The simulations help to understand the positions of several patent offices, and underline an alternative way to proceed with the negotiations while reducing financial risks for the whole system.

Designing a Genuine EMU: Which "Unions" for EU and Eurozone? Bruges European Economic Policy (BEEP) Briefing 34/2014

The initial ‘framing’ (in the summer of 2012) of the ‘genuine EMU’ for the wider public suggested to design an entire series of ‘unions’. So many ‘unions’ are neither necessary nor desirable – only some are and their design matters. The paper critically discusses first the negative fall-out of the crisis for EMU, and subsequently assesses the fiscal and the banking unions as accomplished so far, without going into highly specific technical details. The assessment is moderately positive, although there is ample scope for further improvement and a risk for short-term turbulence once the ECB has finished its tests and reviews. What about the parade of other ’unions’ such as economic union, social union and political union? The macro-economic imbalances procedure (MIP) and possibly the ESRB have overcome the pre-crisis disregard of macro competitiveness. The three components of ‘economic union’ (single market, economic policy coordination and budgetary disciplines) have all been strengthened. The last two ‘unions’, on the other hand, would imply a fundamental change in the conferral of powers to the EU/ Eurozone, with drastic and possibly very serious long-run implications, including a break-up of the Union, if such proposals would be pushed through. The cure is worse than the disease. Whereas social union is perhaps easier to dismiss as a ‘misfit’ in the EU, the recent popularity of suggesting a ‘political union’ is seen as worrisome. Probably, nobody knows what a ‘political union’ is, or, at best, it is a highly elastic notion: it might be thought necessary for reasons of domestic economic reforms in EU countries, for a larger common budget, for some EU tax power, for (greater) risk pooling, for ‘symmetric’ macro-economic adjustment and for some ultimate control of the ECB in times of crisis. Taking each one of these arguments separately, a range of more typical EU solutions might be found without suggesting a ‘political union’. Just as ‘fiscal capacity’ was long an all-or-nothing taboo for shifting bank resolution to the EU level, now solved with a modest common Fund and carefully confined but centralised powers, the author suggests that other carefully targeted responses can be designed for the various aspects where seen as indispensable, including the political say of a lender-of-last-resort function of the ECB. Hence, neither a social nor a political union worthy of the name ought to be pursued. Yet, political legitimacy matters, both with national parliaments and the grassroots. National parliaments will have to play a larger role.

Strategic Insurance: The Future of the Belgian Armed Forces. IES Policy Brief Issue 2014/04/May 2014

Summary. Belgium is on the cusp of its next defence reform. While the security landscape throughout Europe’s neighbourhood and beyond deteriorates, the armed forces face numerous challenges. Most importantly, the next defence plan needs to recalibrate the force structure in function of political ambitions and budgetary realities. This Policy Brief argues that Belgium must embrace a nimble but broad-spectrum force. Any future structure must encompass agile land forces as well as a modern combat air force, without neglecting the need to safeguard a sizeable navy and invest in cyber capabilities. European cooperation should be pursued wherever possible while recognising that this necessitates budgetary convergence. For Belgium this means the investment budget needs to grow significantly in order to acquire interoperable but self-owned assets. Such a choice can be justified on the recognition that defence is not just about expeditionary operations, but also economic stimulus, intergenerational solidarity and strategic insurance: maintaining the ability to respond to whatever the future may bring.