Labour Mobility in Europe: An untapped resource? CEPS Policy Brief No. 327, March 2015

Despite public perceptions, labour mobility is low in the EU, particularly within the euro area. The authors of this Policy Brief make four main points: first, that the economic and financial crisis has affected mobility patterns by redirecting flows away from the periphery, thus showing the limits of labour mobility potential within the current eurozone - largely due to the negligible mobility of nationals from large countries hit by the crisis. Second, east-west mobility has not been fundamentally affected by the crisis, and ten years after the eastern enlargement the number of East Europeans living in EU15 should be of no overall concern. Third, the long-term economic effects of mobility are uncertain, but potential negative effects are more likely to show up in sending countries than in receiving ones. Finally, in view of the lessons learned from the economic crisis, the Commission and member states should adopt a longer-term view on labour mobility. The authors recommend a further upgrade of job-matching tools, namely the EURES system, and should foster better recognition of qualifications and the exchange of best practices among mobility networks. In order to improve mobility in the longer term, the Commission and member states should improve the mobility of third-country nationals – starting with those completing tertiary education at an EU institution and able to find employment. The aim of improving mobility gives new impetus to the ‘mother tongue + two foreign languages’ objective and the European Benchmark of Language Competences Initiative, in particular competence in the first foreign language taught at school.

Smart electricity grids: A very slow deployment in the EU. Egmont Paper No. 74, February 2015

Summary. The European electricity sector will have to deal with a huge challenge in the decades to come. On the one hand, electrical power is increasingly substituted for other forms of energy. It has been forecast that electricity demand will increase in the future (notably because of new needs in transport and heat sectors), although it is currently stagnant, mainly because of the economic crisis. Unless a major alternative energy source is discovered, electricity will become the central energy pillar in the long term. On the other hand, electricity production remains uncertain and will depend on numerous factors: the growth of renewable energy and decentralized energy, the renewal of old power generation capacities, increased external dependency, CO2 charges, etc. This increases the demand for electricity networks that are more reliable, more efficient, and more flexible. Europe’s current electricity networks are ageing, and, as already indicated by the International Energy Agency, many of them will need to be modernized or replaced in the decades to come. Finally, the growing impact of energy trading also needs to be taken into account. These considerations explain the need to modernize the electric grid through various ICT means. This modernization alone may allow the grid to become more flexible and interactive, to provide real time feedback, more adaptation to a fluctuating demand, and finally to reduce the global electricity costs. The paper begins with a description of the EU definition of the term ‘smart grid’ (§ 1) and of the body in charge of advising the Commission (§ 2). The EU legal framework applicable to smart grids is also detailed (§ 3). It is a rather complex domain, connected to various regulations. The paper then examines three critical factors in the development of smart grids (and smart meters as a precondition). Standardization is quite complex, but absolutely essential (§ 4). Innovation is not easily put into action (§ 5). Finally, as digital insecurity has worsened dramatically in recent years, the security of electricity networks, and especially their multiplied electronic components, will become increasingly important (§ 6). Lastly, the paper provides a concise overview of the progress of smart grids in the EU in recent years (§ 7). In a nutshell, the conclusion is that progress is quite slow, many obstacles remain, and, given the appearance of many new regulatory problems, it would be useful to organize a review of the present EU strategy.

The Re-emergence of Russia and its Collision Course with Europe. Jean Monnet/Robert Schuman Paper Series Vol. 14 No. 4, March 2014

From the Introduction. In order to understand the historical roots of the current geopolitical confrontation between the EU and Russia, we have to go back to the end of the Cold War and to the catastrophic decade that it was followed by in Russian history. The dissolution of the USSR imposed serious economic hardship for Russia and for all the ex-communist East-European states. Russia was the hardest hit amongst them, as the center of the USSR's economic system it suffered most from the dissolution of regional economic ties. This crisis was just deepened by the IMF's privatization and reform campaign, which imposed austerity measures and state-asset privatization as a “shock-therapy” answer to the country's economic problems. This policy package did nothing to save Russia from economic collapse (which eventually happened in 1998), the only thing it achieved was an even stronger social and economic crisis and the enrichment of the rent-seeking ex-communist top bureaucrats by state-assets, which were sold out under-priced through diverse channels of corruption

Towards Explaining Anti-Foreign Violence in Germany. CES Germany & Europe Working Papers, No. 04.8 (Series 53), 1993

Gennany has recently witnessed a vast increase in anti-foreign violence. Assembling data from a wide variety of recent research, the paper addresses two basic questions: to what extent is the outburst of xenophobic attacks a German peculiarity? and what are the explanations for the mcreasing violence? An analysis of criminal statistics of various European countries and of comparative opinion polls in the European Community shows that Germany has indeed witnessed a growth of anti-foreign sentiment, and a level of violence that is conspicuous from a com­ parative perspective. Four possible determinants of this peculiarity of recent German history are discussed: (1) the growing ethnic and cultural heterogeneity due to the vast increase in immigration from non-European countries; (2) the increasing costs of foreigners' claims on the German welfare state; (3) the economic context of immigration; and (4) the transformation of national identity in the context of German unification. It is shown that neither the rate of immigration nor the position of foreigners in the German welfare state yields satisfactory explanations for the recent upsurge in violence, which only occurred after unification. The key for an explanation lies in a particu­lar macro-constellation that is characterized by the concurrence of a massive wave of immigration with an economic crisis, and with the ethnicization of German national identity in the context of unification. Anti-foreign sentiments do not automatically follow increases in immigration, but grow in a specific political climate to which the political elites actively contribute.

Paris 2015: What’s in it for the EU? CEPS Commentary, 8 May 2015

The European Union, together with all countries, is making a second effort to reach a comprehensive global climate change agreement at the United Nations Climate Change Conference (COP21 or CMP11) in Paris in December 2015, after the unsuccessful attempt to do so in Copenhagen in 2009. At a time when the EU is still preoccupied with recovery from the economic crisis, and is facing geopolitical challenges and a number of conflicts, why should it see the importance of continuing to offer leadership in the field of climate change? And why would such an agreement be important for the EU? In short: “What’s in it for the EU?” This commentary reviews the wider context of the negotiations, looking not only at the geopolitical shifts that have taken place on the road to Paris, but also at the interests of the EU both as far as its domestic climate policy is concerned, as well as its role as a diplomatic ‘soft power’.

Ukraine on the financial front – the problem of Ukraine’s foreign public debt. OSW COMMENTARY NUMBER 178|05.08.2015

One of the key challenges that Ukraine is facing is the scale of its foreign debt (both public and private). As of 1st April it stood at US$ 126 billion, which is 109.8% of the country’s GDP. Approximately 45% of these financial obligations are short-term, meaning that they must be paid off within a year. Although the value of the debt has fallen by nearly US$ 10 billion since the end of 2014 (due to the private sector paying a part of the liabilities), the debt to GDP ratio has increased due to the recession and the depreciation of the hryvnia. The value of Ukraine’s foreign public debt is also on the rise (including state guarantees); since the beginning of 2015 it has risen from US$ 37.6 billion to US$ 43.6 billion. Ukraine does not currently have the resources to pay off its debt. In this situation a debt restructuring is necessary and this is one of the top priorities for the Ukrainian government as well as for the International Monetary Fund (IMF) and its assistance programme. Without this it will be much more difficult for Ukraine to overcome the economic crisis.

Strangers among us. Non-governmental organisations in Russia. OSW COMMENTARY 2015-09-29

The situation of the third sector in Russia, i.e. the civil society structures independent from the state, is worsening on a regular basis. The Kremlin’s actions aimed at paralysing and destroying the independent non-governmental sector seen over the past four years have been presented as part of a struggle for the country’s sovereignty. This is above all a consequence of the Russian government’s efforts to take full control of the socio-political situation in the country while it also needs to deal with the geopolitical confrontation with the West and the worsening economic crisis. The policy aimed against non-governmental organisations is depriving the public of structures for self-organisation, protection of civil rights and the means of controlling the ever more authoritarian government. At the same time, the Kremlin has been depriving itself of channels of co-operation and communication with the public and antagonising the most active citizens. The restrictive measures the Kremlin has taken over the past few years with regard to NGOs prove that Russian decision-makers believe that any social initiative independent of the government may give rise to unrest, which is dangerous for the regime, and – given the economic slump – any unrest brings unnecessary political risk.

Firmer foundations for a stronger European Banking Union. Bruegel Working Paper 2015/13, November 2015

The move to European Banking Union involving the supervision and resolution of banks at euro-area level was stimulated by the sovereign debt crisis in the euro area in 2012. However, the long-term objective of Banking Union is dealing with intensified cross-border banking.The share of the assets of national banking systems that come from other EU countries was rising before the financial and economic crisis of 2007, but went into decline thereafter in the context of a general retrenchment of international banking. Most recent data, however, suggests the decline has been halted. About 14 percent of the assets of banks in Banking Union come from other EU countries, while about a quarter of the assets of the top 25 banks in the Banking Union are held in other EU countries.While a crisis-prevention framework for the euro area has largely been completed, the crisis-management framework remains incomplete, potentially creating instability. There is no governance mechanism to resolve disputes between different levels of crisis-management agencies, and incentives to promote optimum oversight are lacking. Most importantly, risk-sharing mechanisms do not adequately address the sovereign-bank loop, with a lack of clarity about the divide between bail-in and bail-out.To complete Banking Union, the lender-of-last-resort and deposit insurance functions should move to the euro-area level, breaking the sovereign-bank loop. A fully-fledged single deposit insurance (and resolution) fund should be favoured over a reinsurance scheme for reasons of cost and simplicity.

Squaring the cycle: capital flows, financial cycles, and macro-prudential policy in the euro area. Bruegel Working Paper 2015/14, November 2015

• Before the financial and economic crisis, monetary policy unification and interest rate convergence resulted in the divergence of euroarea countries’ financial cycles. This divergence is deeply rooted in the financial integration spurred by currency union and strongly correlated with intra-euro area capital flows. Macro-prudential policy will need to deal with potentially divergent financial cycles, while catering for potential cross-border spillovers from domestic policies, which domestic authorities have little incentive to internalise. • The current framework is unfit to deal effectively with these challenges. The European Central Bank should be responsible for consistent and coherent application of macro-prudential policy, with appropriate divergences catering for national differences in financial conditions. The close link between domestic financial cycles and intra-euro area capital flows raises the question of whether macro-prudential policy in the euro area can be compatible with free flows of capital. Financial cycle divergence had its counterpart in the build-up of macroeconomic imbalances, so effective implementation of the Macroeconomic Imbalance Procedure would support and strengthen macro-prudential policy.

Is there a way out of the Polish pickle? EPIN Commentary No. 31/22 January 2016

Poland is making headline news again. This time, however, not in a role of Central European Wunderkind surfing the economic crisis, but for reasons to be less proud of. Ever since the Prawo and Sprawiedliwość (PiS, a member of European Conservatives and Reformists group in the European Parliament) government took power after the elections in November, Poland has experienced political turmoil and is now facing accusations that the rule of law is in danger. This constitutes a major challenge for the European Union and for its other member states, which are looking for ways to deal with a recalcitrant state that makes a rapid U-turn on democratic fundamentals and takes any criticism hysterically. This is not the first time that the organisation has had to deal with such a case, yet solutions have not yet been found. Hungary is a case in point. And now Polish leaders too seem convinced about the virtues of the concept of illiberal democracy. Which prescription should the EU use to buck the trend and what are the potential side-effects?

Odessa Oblast: Governor Saakashvili’s superficial changes. OSW COMMENTARY NUMBER 196|February 2016

Two years after the Revolution of Dignity, Odessa Oblast, one of Ukraine’s key regions in economic and political terms, is still strongly polarised as regards its residents’ views on the future of their country. The political circles rooted in the Party of Regions have maintained their influence to a great extent due to increasing dissatisfaction with the central government’s activity and with the economic crisis which has strongly affected the public. Politicians linked to the ancien régime remain the most important political players. Some pro-Ukrainian circles had pinned their hopes for change in the region on the nomination of the former Georgian president, Mikheil Saakashvili, for governor of Odessa Oblast on 30 May 2015. At the beginning of his rule this politician made widely publicised promises to combat corruption, to improve the quality of the administration services, to develop infrastructure and to attract foreign capital. However, more than half a year has passed since he assumed office, and it is difficult to speak about any spectacular successes in reforming the region. Saakashvili has above all become a player on the national forum, supporting the presidential camp in their struggle with Prime Minister Arseniy Yatsenyuk and the oligarch Ihor Kolomoyskyi, among others. However, his nomination has made Odessa Oblast more important for Ukraine, above all in political and symbolic terms. This is because Odessa Oblast is the best manifestation of the condition of the Ukrainian state two years since the Revolution of Dignity – rudimentary reforms or no reforms at all, strong resistance to any changes from the administration, strong local political-business connections, the lack of consolidation among post-Maidan groups and corruption inherent in the system.

Labour Mobility in Europe – An untapped resource?. Policy Brief #2015/04

Despite the public perception in many member states that labour mobility has spiralled out of control, intra-EU migration remains low, particularly within the euro area. The limits to the potential of labour mobility became evident during the economic crisis as high unemployment rates in the periphery have only caused limited mobility from crisis countries. Hence, the bulk of labour mobility still flows from east to west but ten years after the eastern enlargement the number of East Europeans living in EU15 should be of no overall concern. In view of the lessons learned from the crisis, the Commission and member states should improve existing tools for cross-border job matching and adopt a longer-term view on labour mobility.

Social Policy Reforms in the EU: A Cross-national Comparison. Social Inclusion Monitor Europe (SIM) – Reform Barometer. Pilot Study

European countries are losing momentum for social policy reforms: The results of the SIM Europe Index report on social justice, published in September 2014, suggested a growing social divide among the member states. Assessing six policy areas of social inclusion, the data revealed the deteriorating social situation since 2009 across the EU. The report stressed, in particular, the difficulties southern EU member states were having in coping with the effects of the financial and economic crisis. This second report, the SIM Europe Reform Barometer, takes up these results and delivers two tasks: to impartially assess the extent of problem awareness of governments, and to ask whether they have enacted concrete social policy initiatives to tackle these challenges and to counterbalance the growing divide. Southern European member states, especially, did not or have not been able to pursue reforms to limit their withering levels of a socially inclusive society. In almost all key dimensions of social inclusion, those member states most affected by the implications of the protracted economic and fiscal crisis in the EU have been least able to confine the ongoing ‘internal devaluation’ in terms of socially balanced governmental activity. By contrast, some northern member states have legislated acts which seem well-suited to at least stabilise or even increase their level of social inclusion.

Les coalitions politiques et l'orientation du changement économique et politique aux États-Unis : la Grande Dépression et la Grande Récession comparées.

Ce mémoire s’intéresse au concept de crise, économique et politique, comme source de changement idéologique et politique. Au travers de l’étude de l’austérité économique, il sera possible d’identifier des différences majeures entre deux épisodes de troubles économiques importants, la Grande Dépression et la Grande Récession. Alors que la Grande Dépression est caractérisée par une double crise, économique et politique, la Grande Récession, elle, demeure un choc essentiellement économique. L’absence de contagion dans le système politique explique la ténacité d’une idée comme l’austérité, de retour depuis la révolution néolibérale des années 80. L’austérité économique s’est adaptée et s’aligne maintenant aux intérêts d’une frange importante de la coalition démocrate. La persistance de l’allure des coalitions politiques depuis le dernier grand réalignement témoigne de l’absence de transformation majeure du mode d’action étatique, ce qui constitue une différence importante entre les deux crises.

US hegemony and Southeast Asia - The impact of, and limits to, US power and influence

The United States has exerted a major influence on Southeast Asia, especially since World War II. As both a promoter of neoliberal reform and as the key strategic actor in the wider East Asian region, the impact of U.S. power has been immense. But both the Asian economic crisis and its aftermath, and the more recent war on terror, have highlighted the contradictory impact of evolving U.S. foreign policy and intervention in the region. At both an elite and a mass level there is evidence of resentment about, and hostility toward, U.S. policy and its perceived negative effects. This article outlines how U.S. foreign policy has impacted the region in the economic, political, and security spheres, and argues that not only has it frequently not achieved its goals, but it may in fact be undermining both America's long-term hegemonic position in the region and any prospects for political liberalization.