The euro crisis: ten roots, but fewer solutions. Bruegel Policy Contribution 2012/17, October 2012

Many factors have contributed to the euro crisis. Some have been addressed by policymakers, even if belatedly, and European Union member states have been willing to improve the functioning of the euro area by agreeing to relinquish national sovereignty in some important areas. However, the most pressing issue threatening the integrity, even the existence, of the euro, has not been addressed: the deepening economic contraction in southern euro-area member states. The common interest lies in preserving the integrity of the euro area and in offering these countries improved prospects. Domestic structural reform and appropriate fiscal consolidation, wage increases and slower fiscal consolidation in economically stronger euro-area countries, a weaker euro exchange rate, debt restructuring and an investment programme should be part of the arsenal. In the medium term, more institutional change will be necessary to complement the planned overhaul of the euro area institutional framework. This will include the deployment of a euro-area economic stabilising tool, managing the overall fiscal stance of the euro area, some form of Eurobonds and measures to make euro-area level decision making bodies more effective and democratically legitimate.

Development and illustrative outputs of the Community Integrated Assessment System (CIAS), a multi-institutional modular integrated assessment approach for modelling climate change.

This paper describes the development and first results of the “Community Integrated Assessment System” (CIAS), a unique multi-institutional modular and flexible integrated assessment system for modelling climate change. Key to this development is the supporting software infrastructure, SoftIAM. Through it, CIAS is distributed between the community of institutions which has each contributed modules to the CIAS system. At the heart of SoftIAM is the Bespoke Framework Generator (BFG) which enables flexibility in the assembly and composition of individual modules from a pool to form coupled models within CIAS, and flexibility in their deployment onto the available software and hardware resources. Such flexibility greatly enhances modellers’ ability to re-configure the CIAS coupled models to answer different questions, thus tracking evolving policy needs. It also allows rigorous testing of the robustness of IA modelling results to the use of different component modules representing the same processes (for example, the economy). Such processes are often modelled in very different ways, using different paradigms, at the participating institutions. An illustrative application to the study of the relationship between the economy and the earth’s climate system is provided.