Elements of Europe's energy union. Bruegel Policy Brief 2014/05, September 2014

THE ISSUE European Union energy policy is guided by three objectives: sustainability, security of supply and competitiveness. To meet its goals in these areas, the EU is updating its energy strategy with new targets for 2030. The starting point for this is the assessment of the previous EU climate and energy package, at the centre of which were the 20-20-20 targets for 2020. Although the EU is largely on track to meet these targets, EU energy policy is generally not perceived as a success. Recent events have undermined some of the assumptions on which the 2020 package was built, and the policies for achieving the 2020 targets – although at first sight effective – are far from efficient.

Was the ECB’s Comprehensive Assessment up to standard? CEPS Policy Brief No. 325, 10 November 2014

The Comprehensive Assessment conducted by the European Central Bank (ECB) represents a considerable step forward in enhancing transparency in euro-area banks’ balance sheets. The most notable progress since the previous European stress test has been the harmonisation of the definition of non-performing loans and other concepts as well as uncovering hidden losses, which resulted in a €34 billion aggregate capital-charge net of taxes. Despite this tightening, most banks were able to meet the 5.5% common equity tier 1 (CET1) threshold applied in the test, which suggests that the large majority of the euro-area banks have improved their financial position sufficiently that they should no longer be constrained in financing the economy. As shown in this CEPS Policy Brief by Willem Pieter de Groen, however, the detailed results provide a more nuanced picture: there remain a large number of the banks in the euro area that are still highly leveraged and in many cases unable to meet the regulatory capital requirements that will be introduced in the coming years under the adverse stress test scenario.

Between energy security and energy market integration. Guidelines for the future development of the EU’s external energy policy in Europe’s neighbourhood. OSW Report, June 2011

For many years the European Union has been improving the efficient use of energy resources and yet the demand for energy in the EU continues to increase. When Europe belonged to one of the world’s key energy markets with relatively easy access to energy resources, growing energy needs were not seen as a source of concern. Today, however, as the competition for energy resources is intensifying and the global position of the EU energy market is being challenged by growing economies in the developing countries, above all China and India, the EU needs to adopt bold policies to guarantee the sustainable supply of energy. This report argues the EU needs to develop a fully-fledged external energy policy; i.e. a common, coherent, strategic approach that build bridges between the interests and needs of the EU integrated energy market on the one hand and supplier countries on the other. The EU’s external energy policy has two main objectives. The first one is to ensure a sustainable, stable and cost-effective energy supply. The second is to promote energy market integration and regulatory convergence with neighbouring countries (often but not always this supports the achievement of the first objective). However, in order to improve its effectiveness, the EU’s external energy policy needs to be seen in a broader economic and political context. Any progress in energy cooperation with third countries is contingent upon the EU’s general stance and offer to those countries.

The Policy Framework for the Promotion of Hydrogen and Fuel Cells in Europe: a Critical Assessment. Bruges European Economic Policy (BEEP) Briefing 19/2008

This paper reviews the current EU policy framework in view of its impact on hydrogen and fuel cell development. It screens EU energy policies, EU regulatory policies and EU spending policies. Key questions addressed are as follows: To what extent is the current policy framework conducive to hydrogen and fuel cell development? What barriers and inconsistencies can be identified? How can policies potentially promote hydrogen and fuel cells in Europe, taking into account the complex evolution of such a disruptive technology? How should the EU policy framework be reformed in view of a strengthened and more coherent approach? The paper concludes that 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. However, the large scale market development of hydrogen and fuel cells will require a new policy approach which comprises technology specific support as well as a supportive policy framework with a special regional dimension.

Scenarios Assessment and Transitions towards a Sustainable Euro-Mediterranean in 2030. MEDPRO Policy Paper No. 9, July 2013

In the aftermath of the 2011 Arab uprisings in the southern and eastern Mediterranean, the region has reached a turning point in its history, presenting as many opportunities as challenges. The European Union itself is facing challenging conditions following the financial and economic crises that have hit its periphery. This MEDPRO Policy Paper examines and assesses various possible scenarios that could play out in EU-Mediterranean relations over the next two decades and offers recommendations towards long-term sustainable socio-economic development in the region.

Financial Engineering Instruments and their Assessment Under EU State Aid Rules. Bruges European Economic Policy (BEEP) Briefing 26/2013

Financial engineering instruments such as guarantees, loans and equity are increasingly used in public funding of enterprises. These instruments have three attractive features: they are repayable, they “leverage” private involvement, and they have a multiplier effect because they generate new income. At the same time, however, they are technically complex and they are subject to state aid rules. Their assessment under EU state aid rules creates two additional problems. First, under certain conditions financial instruments may not contain state aid. This is when public authorities act as “private investors”. This means that state aid cannot be presumed to exist in all financial instruments. It must first be established through market analysis. Second, when state aid is found to be present it is not always possible to quantify it. For this reason the state aid rules that apply to financial instruments differ significantly from other rules. This paper reviews how financial instruments have been assessed by the European Commission and under which conditions the state aid they may contain can be considered to be compatible with the internal market. The paper finds that by and large Member States have succeeded to design measures that have all been approved by the Commission.

Options for Increasing Europe’s Security Role on the Korean Peninsula. IES Policy Brief Issue 2014/06 • July 2014

Summary. Mainstream thinking about the role of the European Union in East Asia usually rests on non-traditional security threats such as human and environmental security. In contrast, and within the context of the continuing instability on the Korean peninsula, this Policy Brief looks at the potential for EU-Republic of Korea cooperation on hard security matters. This Policy Brief surmises that there is much room for cooperation that chimes with the objectives of the European Security Strategy and its Implementation Report. The Policy Brief concludes that the EU and Member States will need to balance desirability and ambition if coherent and effective EU-ROK cooperation is to emerge.

The EU Counter-Terrorism Policy Responses to the Attacks in Paris: Towards an EU Security and Liberty Agenda. CEPS Liberty and Security in Europe No. 81/February 2015

This paper examines the main EU-level initiatives that have been put forward in the weeks following the attacks in Paris in January 2015, which will be discussed in the informal European Council meeting of 12 February 2015. It argues that a majority of these proposals predated the Paris shootings and had until that point proved contentious as regards their efficacy, legitimacy and lawfulness. The paper finds that EU counterterrorism responses raise two fundamental challenges: A first challenge is posed to the freedom of movement, Schengen and EU citizenship. Priority is being given to the expanded use of large-scale surveillance and systematic monitoring of all travellers including EU citizens, which stands in contravention of Schengen and the free movement principle. A second challenge concerns EU democratic rule of law. Current pressures calling for the adoption of measures such as the EU Passenger Name Record challenge the scrutiny roles held by the European Parliament and the Court of Justice of the EU on counterterrorism measures in a post-Lisbon Treaty setting. The paper proposes that the EU adopts a new European Agenda on Security and Liberty based on an EU security (criminal justice-led) cooperation model that is firmly anchored in current EU legal principles and rule of law standards. This model would call for ‘less is more’ concerning the use, processing and retention of data by police and intelligence communities. Instead, it would pursue better and more accurate use of data meeting the quality standards of evidence in criminal judicial proceedings.

EU’s quest for energy security. What role for the Energy Union? EPC Policy Brief, 3 March 2015

From the Introduction. The past year has pushed energy security high on the EU agenda, and with it, the need for stronger cooperation on a common energy policy. For years the EU member states have been driven by different reasons to – or not to – collaborate. The internal energy market's economic benefits have not have not provided a sufficient driver for cooperation. The first climate and energy targets were an achievement, but in reality action has been undermined by concerns over competitiveness. Being a global leader in setting targets has not translated in cross-border collaboration in meeting them. National interests and bilateral energy deals have weakened EU's common voice vis-à-vis supplier countries. Whether the recognition of EU's energy vulnerability will become a real driver for creating an Energy Union worth its name remains to be seen. The need for action could not be stronger.

Turkish Stream and its implications for the EU. European Policy Brief No. 34, March 2015

“A first assessment is that this would not work”, EC Vice-President in charge of Energy Union Mr. Maros Sefcovic said in an interview with The Wall Street Journal at the World Economic Forum in Davos on the 22nd of January. He was commenting on the recent announcement by President Vladimir Putin and Gazprom’s Alexei Miller. Indeed, the Russian gas giant’s CEO announced that South Stream would be replaced by a new project, Turkish Stream, linking Russia to the European part of Turkey and this in addition to the existing 16 billion cubic meters (bcm) Blue stream. This policy brief looks at the various implications this new reality could have for Europe’s energy security.

The Ukraine crisis and the demise of the European Security order. EPC Policy Brief, 1 December 2015

The annexation of Crimea by Russia and the subsequent war in the Donbas have delivered a severe blow to the European security order, and have increased tensions between the West and Russia to a level unprecedented since the end of the Cold War. In this context, it would be difficult to start negotiating a new commitment to the principles of the European security order. In this Policy Brief, Paul Ivan analyses the Ukraine crisis and its effect on European security and calls for the EU and NATO to stand firm on their own principles, but also to engage carefully with Russia to develop mechanisms to contain risks and avoid escalation and military confrontation, whether in Syria, the Baltic, the Mediterranean or the Black seas. The recent shooting down of a Russian jet by Turkish forces makes clear the need to prevent such incidents with potential rapid escalatory dynamics.

Rethinking the security of the European Union’s gas supply. Bruegel Policy Contribution, Issue 2016/01 January 2016

Highlights: • The security of the European Union’s gas supplies is crucial to ensuring that supplies to households are not disrupted in freezing winters, that industry can flourish and that the EU cannot be blackmailed in vital foreign policy questions. • Gas supply security should be addressed at EU level because a joint solution would be cheaper, national approaches could undermine the internal energy market and have adverse effects on other countries, and the EU Treaty explicitly calls for energy solidarity. • The current focus on supply diversification and reduction of dependence on imported gas is expensive and does not constitute a systemic response. • Instead of doing everything to reduce gas supplies from key suppliers, gas supply security could more effectively be safeguarded by ensuring that unused alternatives are maintained so that they can be tapped into for an indefinite period in case of supply disruption from a key supplier.This Policy Contribution outlines a market approach that could safeguard gas supply security at very low cost.

Elements of a complex but still incomplete puzzle: an assessment of the EU(-Turkey) summit. CEPS Post-Summit Analysis, 21 March 2016

The March 2016 EU Summit was yet another attempt to make progress on managing the EU’s migration/refugee crisis. In this post-summit analysis, Janis A. Emmanouilidis argues that the EU-Turkey deal, which foresees a return of migrants from Greece to Turkey and a direct resettlement of Syrians from Turkey to the EU on the grounds of a ‘1-for-1’ scheme, is a key and necessary element in a very complex puzzle trying to stop ‘irregular routes’ of migration. The ultimate success of this agreement is by no means certain, but it has the chance to reduce the number of people arriving at the shores of Europe. However, this would neither settle the crisis nor will it provide an adequate response to those in need of international protection. The ‘humanitarian imperative’ requires that the EU-Turkey deal is complemented by a much more ambitious direct resettlement scheme and other long-term measures as part of a comprehensive plan aiming to balance ‘solidarity and security’ in an effort to sustainably overcome the crisis.