European elections: from ‘second-order’ elections to ‘first-order supranational’ elections, How can a ‘first-order supranational’ European election be created? European Policy Brief No. 34, April 2014

Starting from the idea that European elections cannot be considered as purely second order elections, the author gathers some proposals in order to encourage a more effective electoral process. According to the author, if political leaders adopt these reforms, it could transform gradually the European elections into genuine ‘first-order supranational elections’.

Syria: A Roadmap for a Sustainable Political Settlement. Egmont Security Policy Brief No. 52, January 2014

On the eve of the Geneva II conference and amid continued fighting on the ground, this short paper seeks to draw up a roadmap, indicating the different stages and steps on the way to a sustainable political settlement of the conflict in Syria. A longer term perspective is put forward, adopting a broad-based and inclusive approach, focused on a Syrian-led transition process under international supervision with the assistance of key third countries, thus preparing the way for a multi-party democratic post-Baath future.

Beyond Russia’s ‘Versailles syndrome’. Egmont Security Policy Brief No. 58, November 2014

Russia alleges that at the end of the Cold War it underwent a soft version of a Versailles Treaty, pushing it into the periphery of global politics and cutting it out of European decision-making. The crisis in Ukraine is about the survival of Putin’s regime and the dismantling of the post-Cold War settlement. We should not accept the fallacious narrative of victimhood propagated by the Kremlin’s Versailles syndrome. Even so, it is time to explore practical ways of coexisting with Russia. The Helsinki Process and the disarmament and arms control agreements of the Cold War could serve as a model for a mutually acceptable security architecture.

The Special Monitoring Mission in Ukraine: a useful but flawed OSCE tool. EPC Policy Brief, 23 April 2015

The OSCE’s Special Monitoring Mission in Ukraine functions as the eyes and ears of the international community in Eastern Ukraine; it monitors, impartially, the ongoing conflict between Ukraine and Russia and observes whether or not both parties comply with the Minsk II Agreement. The success, or failure, of this Mission will not only be of crucial importance for the situation in Eastern Ukraine, but will also determine the OSCE’s entire future and ability to operate in conflict regions. Although the SMM is a flawed tool, Dennis Sammut and Joseph D’Urso argue that its deployment and the subsequent reinvigoration of OSCE is the perfect opportunity for the EU to rethink its relation to and position in the organisation, and to assume a bigger and more decisive role.

The Monetary Policy of the European Central Bank (2002-2015). CEPS Special Report No. 109/May 2015

This paper examines the policies pursued by the European Central Bank (ECB) since the inception of the euro. The ECB was originally set up to pursue price stability, with an eye also to economic growth and financial stability as subsidiary goals, once the primary goal was secured. The application of a single monetary policy to a diverse economic area has entailed a pronounced pro-cyclicality in its real economic effects on the eurozone periphery. Later, monetary policy became the main policy instrument to tackle financial instability elicited by the failure of Lehman Brothers and the sovereign debt crisis in the eurozone. In the process, the ECB emerged as the lender of last resort in the sovereign debt markets of participating countries. Persistent economic depression and deflation eventually brought the ECB into the uncharted waters of unconventional policies. That the ECB could legally perform all of these tasks bears witness to the flexibility of the TFEU and its Statute, but its tools and operating procedures were stretched to their limit. In the end, the place of the ECB amongst EU policy-making institutions has been greatly enhanced, but has entailed repeated intrusions into the broader domain of economic policies – not least because of its market intervention policies – whose consequences have yet to be ascertained.

Balancing realism and vision - The prospects of EU-Israel relations in times of change and uncertainty. European Policy Brief, 28 May 2015

In this joint EPC-FSD Policy Brief, Andrea Frontini and Eran Etzion assess the state of play and the future prospects of EU-Israel relations in the light of recent domestic and regional political developments. They argue that, despite frequent cacophony and recurring stalemates, the EU-Israel partnership still has the potential to pursue shared strategic objectives. The two sides have to realign their relations, taking into account new realities and common challenges in the Middle East and Northern Africa region, and the current state of the Middle East Peace Process. More careful differentiation and stronger prioritisation of the policy dossiers at stake are urgently needed. An autonomous but joined up review of the overall relationship, guided by courage, pragmatism and stronger strategic direction, is crucial in order to move ahead.

The harsh reality of Ukraine's fiscal arithmetic. Bruegel Policy Contribution ISSUE 2015/07, June 2015

Ukraine is struggling with both external aggression and the dramatically poor shape of its economy. The pace of political and institutional change has so far been too slow to prevent the deepening of the fiscal and balance-of-payments crises, while business confidence continues to be undermined. • Unfortunately, the 2015 International Monetary Fund Extended Fund Facility programme repeats many weaknesses of the 2014 IMF Stand-by Arrangement: slow pace of fiscal adjustment especially in the two key areas of energy prices and pension entitlements, lack of a comprehensive structural and institutional reform vision, and insufficient external financing to close the expected balance-of-payments gap and allow Ukraine to return to debt sustainability in the long term. • The reform process in Ukraine must be accelerated and better managed. A frontloaded fiscal adjustment is necessary to stabilise public finances and the balance-of-payments, and to bring inflation down. The international community, especially the European Union, should offer sufficient financial aid backed by strong conditionality, technical assistance and support to Ukraine’s independence and territorial integrity.

Consensus, contradiction, and conciliation of interests: the geo-economics of the Energy Union. EPC Policy Brief, 8 July 2015

European Union energy policy calls for nothing less than a profound transformation of the EU's energy system: by 2050 decarbonised electricity generation with 80-95% fewer greenhouse gas emissions, increased use of renewables, more energy efficiency, a functioning energy market and increased security of supply are to be achieved. Different EU policies (e.g., EU climate and energy package for 2020) are intended to create the political and regulatory framework for this transformation. The sectorial dynamics resulting from these EU policies already affect the systems of electricity generation, transportation and storage in Europe, and the more effective the implementation of new measures the more the structure of Europe's power system will change in the years to come. Recent initiatives such as the 2030 climate/energy package and the Energy Union are supposed to keep this dynamic up. Setting new EU targets, however, is not necessarily the same as meeting them. The impact of EU energy policy is likely to have considerable geo-economic implications for individual member states: with increasing market integration come new competitors; coal and gas power plants face new renewable challengers domestically and abroad; and diversification towards new suppliers will result in new trade routes, entry points and infrastructure. Where these implications are at odds with powerful national interests, any member state may point to Article 194, 2 of the Lisbon Treaty and argue that the EU's energy policy agenda interferes with its given right to determine the conditions for exploiting its energy resources, the choice between different energy sources and the general structure of its energy supply. The implementation of new policy initiatives therefore involves intense negotiations to conciliate contradicting interests, something that traditionally has been far from easy to achieve. In areas where this process runs into difficulties, the transfer of sovereignty to the European level is usually to be found amongst the suggested solutions. Pooling sovereignty on a new level, however, does not automatically result in a consensus, i.e., conciliate contradicting interests. Rather than focussing on the right level of decision making, European policy makers need to face the (inconvenient truth of) geo-economical frictions within the Union that make it difficult to come to an arrangement. The reminder of this text explains these latter, more structural and sector-related challenges for European energy policy in more detail, and develops some concrete steps towards a political and regulatory framework necessary to overcome them.

The Political Economy of the 2014-2020 Common Agricultural Policy: An Imperfect Storm. CEPS Paperback, 17 August 2015

After five years of debates, consultations and negotiations, the European institutions reached an agreement in 2013 on the Common Agricultural Policy (CAP) for the 2014-2020 period. The outcome has major implications for the EU’s budget and farmers’ incomes but also for Europe’s environment, its contribution to global climate change and to food security in the EU and in the world. It was decided to spend more than €400 billion during the rest of the decade on the CAP.The official claims are that the new CAP will take better account of society's expectations and lead to far-reaching changes by making subsidies fairer and ‘greener’ and making the CAP more efficient. It is also asserted that the CAP will play a key part in achieving the overall objective of promoting smart, sustainable and inclusive growth. However, there is significant scepticism about these claims and disappointment with the outcome of the decision-making, the first in which the European Parliament was involved under the co-decision procedure. In contrast to earlier reforms where more substantive changes were made to the CAP, the factors that induced the policy discussions in 2008-13 and those that influenced the decision-making did not reinforce each other. On the contrary, they sometimes counteracted one another, yielding an ‘imperfect storm’ as it were, resulting in more status quo and fewer changes. This book discusses the outcome of the decision-making and the factors that influenced the policy choices and decisions. It brings together contributions from leading academics from various disciplines and policy-makers, and key participants in the process from the European Commission and the European Parliament.

The Monetary Policy of the European Central Bank (2002-2015). Bruges European Economic Policy Briefings (BEEP) 35/2015.

This paper examines the policies pursued by the European Central Bank (ECB) since the inception of the euro. The ECB was originally set up to pursue price stability, with an eye also to economic growth and financial stability as subsidiary goals, once the primary goal was secured. The application of a single monetary policy to a diverse economic area has entailed a pronounced pro-cyclicality in its real economic effects on the eurozone periphery. Later, monetary policy became the main policy instrument to tackle financial instability elicited by the failure of Lehman Brothers and the sovereign debt crisis in the eurozone. In the process, the ECB emerged as the lender of last resort in the sovereign debt markets of participating countries. Persistent economic depression and deflation eventually brought the ECB into the uncharted waters of unconventional policies. That the ECB could legally perform all of these tasks bears witness to the flexibility of the TFEU and its Statute, but its tools and operating procedures were stretched to their limit. In the end, the place of the ECB amongst EU policy-making institutions has been greatly enhanced, but has entailed repeated intrusions into the broader domain of economic policies – not least because of its market intervention policies – whose consequences have yet to be ascertained.

From Survival to Revival: The Riga Summit 2015 and the revised ENP. Egmont Security policy Brief No. 65, July 2015

With the European Parliament’s July report on the revision of the European Neighbourhood Policy (ENP) calling on the Commission to ‘go back to basics’, this article argues that such a move would be counter-productive and that instead, the ENP needs to move towards the future and break away with the historical elusiveness of this overarching policy. The Riga Summit serves as an illustration of what will not suffice if the EU is to strengthen or even maintain its role in its neighbourhoods. The revision of the ENP is described as 3Dimensional process which needs to yield a concrete and forward-looking new ENP. The recommendations put forth herein map out what a truly revised ENP would entail.

Brexit – lessons from four referenda on the European Union (EU) in Denmark. EU Centre, Policy Brief No. 8, June 2015

From 1972 to 1993 Denmark staged four referenda on the EU. Two of them in particular hold valuable lessons for Britain seeking new terms - in June 1992 on the Treaty on European Union (Maastricht Treaty), the Danes voted “NO” with a slim majority; this was followed by another vote on the treaty in May 1993 on the Edinburgh Agreement with a “YES” vote. Joergen Oerstroem Moeller was directly involved in all four referenda and served 1989-1997 as State-Secretary in the Royal Danish Foreign Ministry. The result of a referendum may and often will be decided by policy decisions shaping the electorates’ perception long before the voting takes place. The majority votes according to instinct and intuition and is often guided by emotions. The Danish case highlights the importance of defining clearly specific exceptions, working hard to explain the case (at home and abroad), establishing good-will, and conveying that exceptions are in principle temporary and do not require treaty changes. The objectives laid out at the start of the process must be achievable. The member state in question should not manoeuvre itself into humiliating back-pedalling at the final negotiation round: if so it arouses suspicion among the electorate that it is being manipulated and deceived. During the campaign media attention will primarily focus on dissent and scepticism presenting the establishment with the tedious task of confuting accusations of all kinds. The YES camp will be pushed into the defensive by the NO camp setting the agenda. Time and effort and political capital needed to be invested for the positive outcome.

A Convergence Process in Household Credit in Central and Eastern Europe. ECRI Commentary No. 16, 30 October 2015

The liberalisation of Eastern Europe’s market during the 1990s and the 2004 EU enlargement have had a great impact on the economies of Central and Eastern Europe (CEE). Indeed, prior to these events, the financial system and household credit markets in CEE were underdeveloped. Nonetheless, it appeared to numerous economists that the development of the CEE financial system and credit markets was following an intensely positive trend, raising the question of sustainability. Many variables impact the level and growth rate of credit; several economists point out that a convergence process might be one of the most important. Using a descriptive statistics approach, it seems likely that a convergence process began during the 1990s, when the CEE countries opened their economies. However, it also seems that the main driver of this household credit convergence process is the GDP per capita convergence process. Indeed, credit to households and GDP per capita have followed broadly similar tendencies over the last 20 years and it has been shown in the literature that they appear to influence each other. The consistency of this potential convergence process is also confirmed by the breakdown of household credit by type and maturity. There is a tendency towards similar household credit markets in Europe. However, it seems that this potential convergence process was slowed down by the financial crisis. Fortunately, the crisis also stabilised the share of loans in foreign currency in CEE countries. This might add more stability to credit markets in Eastern Europe.

The limitations of policy coordination in the euro area under the European Semester. Bruegel Policy Contribution 2015/19, November 2015

The European Semester is a yearly process of the European Union to improve economic policy coordination and ensure the implementation of the EU’s economic rules. Each Semester concludes with recommendations for the euro area as a whole and for each EU member state. We show that implementation of recommendations was poor at the beginning of the Semester in 2011, and has deteriorated since. The European Semester is not particularly effective at enforcing even the EU’s fiscal and macroeconomic imbalance rules. We find that euro-area recommendations with tangible economic goals are not well reflected in the recommendations issued to member states. Finally, we review various proposals to improve the efficiency of the European Semester and conclude that while certain steps could be helpful, policy coordination will likely continue to have major limitations.

The Path towards 1.5 degrees Celsius. CEPS Policy Brief No. 336, 3 December 2015

In less than one year, the country-led exercise in preparing Intended Nationally Determined Contributions (INDCs) has accomplished what the top-down approach characteristic of the UNFCCC has not been able to achieve in over 21 years of negotiations, namely to produce a sound agreement to reduce climate change. As such, the UNFCCC should adopt a new process similar to that used in developing the INDCs, in which Parties to the Convention would mobilise their national efforts, but on a wider scale and under certain agreed binding conditions. To ensure a comprehensive engagement, this Policy Brief recommends the introduction of a four-tier system in which the most developed nations called upon to take the lead, but with the very least developed nations also contributing to the intended UN objective.