Inflation persistence in Central and Eastern European countries. Bruegel Working Paper 2013/04, 22 July 2013

This paper studies inflation persistence with time-varying coefficient autoregressions for twelve central European countries,in comparison with the United States and the euro area. Inflation persistence tends to be higher in times of high inflation. Since the oil price shocks, inflation persistence has declined both in the US and euro-area. In most central and eastern European countries, for which our study covers 1993-2012, inflation persistence has also declined, with the main exceptions of the Czech Republic, Slovakia and Slovenia, where persistence seems to be rather stable.

Micro-, Small- and Medium-Sized Enterprises with High-Growth Potential in the Southern Mediterranean: Identifying Obstacles and Policy Responses. CEPS Paperbacks. January 2014

The Arab Spring, which took root in Tunisia and Egypt in the beginning of 2011 and gradually spread to other countries in the southern Mediterranean, highlighted the importance of private-sector development, job creation, improved governance and a fairer distribution of economic opportunities. The developments led to domestic and international calls for the region’s governments to implement the needed reforms to enhance business and investment conditions, modernise their economies and support the development of enterprises. Central to these demands are calls to enhance the growth prospects of micro-, small- and medium-sized enterprises (MSMEs), which represent an overwhelming majority of the region’s economic activity.

Addressing weak inflation: The European Central Bank's shopping list. Bruegel Policy Contribution 2014/05, May 2014

There are clear benefits to price stability. High inflation can distort corporate investment decisions and the consumption behaviour of households. Changes to inflation redistribute real wealth and income between different segments of society, such as savers and borrowers, or young and old. Price stability is therefore a fundamental public good and it became a fundamental principle of European Economic and Monetary Union. But the European Treaties do not define price stability. It was left to the Governing Council of the European Central Bank (ECB) to quantify it: "Price stability is defined as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%"[1]. The Governing Council has also clarified that it aims to maintain inflation below, but close to, two percent over the medium term, though it has not quantified what 'closeness' means, nor has it given a precise definition of the 'medium term'[2]. The clarification has been widely interpreted to mean that the actual target of the ECB is close to, but below, two percent inflation in the medium term.

Too high and too low: The problems with energy prices in the EU. OSW Commentary No. 122, 03.12.2013

On 11 October, the top executives of ten European energy companies, which jointly own about half of the European Union’s electricity generating capacity, warned that “energy security is no longer guaranteed” and once again called for changes to EU energy policy. Due to persistent adverse conditions in the energy market (linked to, for example, the exceptionally low wholesale energy prices) more and more conventional power plants are being closed down. According to sector representatives, this could lead to energy shortages being seen as early as this winter. Meanwhile, in an interview with The Daily Telegraph published in September of this year, the European industry commissioner Antonio Tajani warned – in a rather alarmist tone – of the disastrous consequences the rising energy prices could have on European industry. Amongst the reasons for the high prices of energy, Tajani mentioned the overambitious pace and methods used to increase the share of renewables in the sector. In a similar vein, EU President Herman Van Rompuy has highlighted the need to reduce energy costs as a top priority for EU energy policy1. The price of energy has become one of the central issues in the current EU energy debate. The high consumer price of energy – which has been rising steadily over the past several years – poses a serious challenge to both household and industrial users. Meanwhile, the declining wholesale prices are affecting the cost-effectiveness of energy production and the profits of energy companies. The current difficulties, however, are first and foremost a symptom of much wider problems related to the functioning of both the EU energy market as well as to the EU’s climate and energy policies.

European Central Bank quantitative easing: the detailed manual. Bruegel Policy Contribution Issue 2015/02, March 2015

• The European quantitative easing programme, the Public Sector Purchase Programme (PSPP), started on 9 March 2015 and will last at least until September 2016. Purchases will be composed of sovereign bonds and securities from European institutions and national agencies. • The European Central Bank Governing Council imposed limits to ensure that the Eurosystem will not breach the prohibition on monetary financing. However, these limits will constrain the size and duration of the programme, especially if it is sustained after September 2016. The possibility for national central banks to also buy national agency securities could alleviate this, but the small number of eligible agencies could limit their role as a back-up purchase. • The Eurosystem should find other eligible agencies, especially in countries in which public debt is small, or waive the limits for countries respecting the investment grade eligibility criteria. The same issue arises with European institutions: their number and outstanding debt securities are limited. The waiver of the limits proposed for sovereigns should be applied to institutions with high ratings. • The PSPP profits that will ultimately be repatriated to national treasuries will be small. This was to be expected, given current very low yields. Profits will also come from the major increase in reserves resulting from the implementation of QE, combined with the negative deposit rates on excess reserves at the ECB.

The role of Central Europe in the German economy. The political consequences. OSW Report June 2016

Recent publications allow us to conclude that the economic relations between Germany and Central Europe have come to the ‘end of history’, and nothing new will happen. However, a deeper analysis of these relationships reveals interesting new trends. Since joining the European Union the states of Central Europe have not settled for maintaining the average level of economic development, but have continued to narrow the distance between them and Western Europe, something which the global financial crisis did not prevent. Their improved economic situation also affected their relations with Germany. The latest results from the Visegrád Group states show them to be Germany’s most important trading partner, and their balance of trade in goods is in a state of equilibrium, while many euro area countries have recorded high trade deficits with Germany. The aim of this report is to display the trends in trade and investment between Germany and Central Europe, based on the example of the Visegrád Group. The author will also attempt to answer the question of whether the advancing economic cooperation between Germany and the V4 countries will lead to the further modernisation of those countries’ economies, or whether it will run the risk of leaving them in the ‘middle income trap’.

Holocene flood frequency across the Central Alps

The frequency of large-scale heavy precipitation events in the European Alps is expected to undergo substantial changes with current climate change. Hence, knowledge about the past natural variability of floods caused by heavy precipitation constitutes important input for climate projections. We present a comprehensive Holocene (10,000 years) reconstruction of the flood frequency in the Central European Alps combining 15 lacustrine sediment records. These records provide an extensive catalog of flood deposits, which were generated by flood-induced underflows delivering terrestrial material to the lake floors. The multi-archive approach allows suppressing local weather patterns, such as thunderstorms, from the obtained climate signal. We reconstructed mainly late spring to fall events since ice cover and precipitation in form of snow in winter at high-altitude study sites do inhibit the generation of flood layers. We found that flood frequency was higher during cool periods, coinciding with lows in solar activity. In addition, flood occurrence shows periodicities that are also observed in reconstructions of solar activity from 14C and 10Be records (2500-3000, 900-1200, as well as of about 710, 500, 350, 208 (Suess cycle), 150, 104 and 87 (Gleissberg cycle) years). As atmospheric mechanism, we propose an expansion/shrinking of the Hadley cell with increasing/decreasing air temperature, causing dry/wet conditions in Central Europe during phases of high/low solar activity. Furthermore, differences between the flood patterns from the Northern Alps and the Southern Alps indicate changes in North Atlantic circulation. Enhanced flood occurrence in the South compared to the North suggests a pronounced southward position of the Westerlies and/or blocking over the northern North Atlantic, hence resembling a negative NAO state (most distinct from 4.2 to 2.4 kyr BP and during the Little Ice Age). South-Alpine flood activity therefore provides a qualitative record of variations in a paleo-NAO pattern during the Holocene. Additionally, increased South Alpine flood activity contrasts to low precipitation in tropical Central America (Cariaco Basin) on the Holocene and centennial time scale. This observation is consistent with a Holocene southward migration of the Atlantic circulation system, and hence of the ITCZ, driven by decreasing summer insolation in the Northern hemisphere, as well as with shorter-term fluctuations probably driven by solar activity.

SHRIMP U-Pb dating of high-grade migmatites and related magmatites from Northwestern Oates Land, East Antarctica

High- to very-high-grade migmatitic basement rocks of the Wilson Hills area in northwestern Oates Land (Antarctica) form part of a low-pressure high-temperature belt located at the western inboard side of the Ross-orogenic Wilson Terrane. Zircon, and in part monazite, from four very-high grade migmatites (migmatitic gneisses to diatexites) and zircon from two undeformed granitic dykes from a central granulite-facies zone of the basement complex were dated by the SHRIMP U-Pb method in order to constrain the timing of metamorphic and related igneous processes and to identify possible age inheritance. Monazite from two migmatites yielded within error identical ages of 499 +/- 10 Ma and 493 +/- 9 Ma. Coexisting zircon gave ages of 500 +/- 4 Ma and 484 +/- 5 Ma for a metatexite (two age populations) and 475 +/- 4 Ma for a diatexite. Zircon populations from a migmatitic gneiss and a posttectonic granitic dyke yielded well-defined ages of 488 +/- 6 Ma and 482 +/- 4 Ma, respectively. There is only minor evidence of age inheritance in zircons of these four samples. Zircon from two other samples (metatexite, posttectonic granitic dyke) gave scattered 206Pb-238U ages. While there is a component similar in age and in low Th/U ratio to those of the other samples, inherited components with ages up to c. 3 Ga predominate. In the metatexite, a major detrital contribution from 545 - 680 Ma old source rocks can be identified. The new age data support the model that granulite- to high-amphibolite-facies metamorphism and related igneous processes in basement rocks of northwestern Oates Land were confined to a relatively short period of time of Late Cambrian to early Ordovican age. An age of approximately 500 Ma is estimated for the Ross-orogenic granulite-facies metamorphism from consistent ages of monazite from two migmatites and of the older zircon age population in one metatexite. The variably younger zircon ages are interpreted to reflect mineral formation in the course of the post-granulite-facies metamorphic evolution, which led to a widespread high-amphibolite-facies retrogression and in part late-stage formation of ms+bi assemblages in the basement rocks and which lasted until about 465 Ma. The presence of inherited zircon components of latest Neoproterozoic to Cambrian age indicates that the high- to very-grade migmatitic basement in northwestern Oates Land originated from clastic series of Cambrian age and, therefore, may well represent the deeper-crustal equivalent of lower-grade metasedimentary series of the Wilson Terrane.

Late Cretaceous and Cainozoic bathyal Ostracoda of DSDP Site 62-463 in the Central Pacific (Fig. 3)

Cainozoic deep-sea ostracod assemblages from the summits of Mid-Pacific guyots point to high levels of endemism possibly as a result of their bathymetric separation from the surrounding sea floor. However, the interpretation of these fossil assemblages is hampered by the paucity of comparative material from surrounding non-guyot sites. Fifteen ostracod assemblages from DSDP Site 463 (Late Cretaceous-Pleistocene) were studied to compare with those from nearby guyots. Three distinct faunal assemblages are recognised at Site 463: Assemblage A (Maastrichtian-Eocene), Assemblage B (Oligocene-Upper Miocene) and Assemblage C (Upper Miocene-Pleistocene) although the palaeoenvironmental significance of these units is unclear. Sixty-two ostracod species are identified, the thirteen most abundant are discussed in the taxonomic section, five of which are described as new. Between 30 and 100% of the species encountered in each sample are considered as endemic to Site 463, while some of the remaining species were previously thought to be endemic to individual guyots. Similarly high levels of endemism on nearby guyots probably reflect an incomplete knowledge of deep-sea ostracod faunas rather than the establishment of geographically or bathymetrically restricted populations. The presence of globally pandemic and geographically widespread taxa on sites such as the Mid-Pacific Mountains, surrounded by abyssal depths which lie below the CCD, indicates that some faunal exchange or migration of ostracods does take place. This must be achieved within the intermediate waters and probably occurs passively.

Abyssal community analysis from replicate box cores in the central North Pacific

A 0.25 m**2 United States Naval Electronics Laboratory box corer was used to take replicate samples from an oligotrophic bottom under the North Pacific Central Water Mass (~28°N, 155°W). The bottom is a red clay with manganese nodules at a depth of 5500-5800 m. Macrofaunal density ranges from 84 to 160 individuals per m**2 and is therefore much the same as in Northwest Atlantic Gyre waters. Of the macrofaunal taxa, polychaetes dominate (55 %), followed by tanaids (18 %), bivalves (7 %), and isopods (6 %). Meiofaunal taxa were only partially retained by the 297 µm screen used in washing. Even then, they are 1.5-3.9 times as abundant as the macrofaunal taxa, with nematodes being numerically dominant by far. Foraminifera seem to comprise an important portion of the community, but could not be assessed accurately because of the inability to discriminate living and dead tests. Remains of what are probably xenophyophoridans are also very important, but offer the same problem. Faunal diversity is extremely high, with deposit feeders comprising the overwhelming majority. Most species are rare, being encountered only once. The distributions of only three species show any significant deviation from randomness. The polychaete fauna from box cores collected from 90 miles to the north was not significantly different from that of the principal study locality. Concordance appeared at several taxonomic levels, from species through macrofaunal/meiofaunal relationships. As a result, the variation in total animal abundance shows aggregation among cores. We discuss Sokolova's concept of a deep-sea oligotrophic zone dominated by suspension feeders, and reconcile it with our present findings. The high diversity of the fauna combined with the low food level contradict theories that relate diversity directly with productivity.

Description of, and 238U, 234U, 232Th and 230Th measurements on a nodule from R/V Sonne station SO79_62KD, Central East Pacific Ocean

Two diagenetic manganese nodules from the Peru Basin were investigated by thermal ionization mass spectrometry and high resolution alpha spectrometry for uranium and thorium. The TIMS concentrations for nodule 62KD (63KG) vary as follows: 0.12-1.01 ppb (0.06-0.59) 230Th, 0.51-1.98 ppm (0.43-1.40) 232Th, 0.13-0.80 ppb (0.09-0.49) 234U, and 1.95-13.47 ppm (1.66-8.24) 238U. Both nodules have average growth rates of ~110 mm per million years. However, from the variations of excess 230Th with depth we estimate partial accumulation rates which range from 50 to 400 mm per million years. The 234U dating method cannot be applied due to remobilization of U from the sediment and subsequent incorporation into the nodules' crystal lattice, reflected by decay corrected 234U values far above the ocean water value. Sections of fast nodule growth are related to those layers having high Mn/Fe ratios (up to 200) and higher densities. As a possible explanation we develop a scenario that describes similar glacial/interglacial trends in both nodules as a record of regional changes of sediment and/or deep water chemistry.

A high-resolution Lateglacial and Holocene palaeoceanographic record from the Greenland Sea

We present an unprecedented multicentennial sediment record from the foot of Vesterisbanken Seamount, central Greenland Sea, covering the past 22.3 thousand years (ka). Based on planktic foraminiferal total abundances, species assemblages, and stable oxygen and carbon isotopes, the palaeoenvironments in this region of modern deepwater renewal were reconstructed. Results show that during the Last Glacial Maximum the area was affected by harsh polar conditions with only episodic improvements during warm summer seasons. Since 18?ka extreme freshwater discharges from nearby sources occurred, influencing the surface water environment. The last major freshwater event took place during the Younger Dryas. The onset of the Holocene was characterized by an improvement of environmental conditions suggesting warming and increasing ventilation of the upper water layers. The early Holocene saw a stronger Atlantic waters advection to the area, which began around 10.5 and ended quite rapidly at 5.5?ka, followed by the onset of Neoglacial cooling. Surface water ventilation reached a maximum in the middle Holocene. Around 3?ka the surface water stratification increased leading to subsequent amplification of the warming induced the North Atlantic Oscillation at 2?ka.

Late pleistocene and holocene sedimentation in the central and eastern Persian Gulf

The sandfraction of the sediment was analysed in five cores, taken from 65 m water depth in the central and eastern part of the Persian Gulf. The holocene marls are underlayn by aragonite muds, which are probably 10-11,000 years old. 1. The cores could be subdivided into coarse grained and fine grained layers. Sorting is demonstrated by the following criteria: With increasing median values of the sandfraction - the fine grained fraction decreases within each core; - the median of each biogenic component, benthonic as well as planktonic, increases; - the median of the relict sediment, which in core 1179 was carried upward into the marl by bioturbation, increases; - the percentages of pelecypods, gastropods, decapods and serpulid worms in the sandfraction increase, the percentages of foraminifera and ostracods decrease; - the ratios of pelecypods to foraminifera and of decapods to ostracods increase; - the ratios of benthonic molluscs to planktonic molluscs (pteropods) and of benthonic foraminifera to planktonic foraminifera increase (except in core 1056 and 1179); - the ratio of planktonic molluscs (pteropods) to planktonic foraminifera increases; - the globigerinas without orbulinas increase, the orbulinas decrease in core 1056. Different settling velocities of these biogenic particles help in better understanding the results : the settling velocities, hence the equivalent hydrodynamic diameters, of orbulinas are smaller than those of other globigerinas, those of planktonic foraminifera are smaller than those of planktonic molluscs, those of planktonic molluscs are smaller than those of benthonic molluscs, those of pelecypods are smaller than those of gastropods. Bioturbation could not entirely distroy this "grain-size-stratification". Sorting has been stronger in the coarse layers than in the finer ones. As a cause variations in the supply of terrigenous material at constant strength of tidal currents is suggested. When much terrigenous material is supplied (large contents of fine grained fraction) the sedimentation rates are high: the respective sediment surface is soon covered and removed from the influence of tidal currents. When, however, the supply of terrigenous material is small, more sandy material is taken away in all locations within the influence of terrigenous supply. Thus the biogenic particles in the sediment do not only reflect the organic production, but also the influence of currents. 2. There is no parameter present in all cores that is independently variable from grain size and can be used for stratigraphic correlation. The two cores from the Strait of Hormus were correlated by their sequences of coarse and fine grained layers. 3. The sedimentation rates of terrigenous material, of total planktonic and benthonic organisms and of molluscs, foraminifera, echinoids and ophiuroids are shown in table 1 (total sediment 6.3-75.5 cm/1000 yr, biogenic carbonate 1.9-3.6 cm/1000 yr). The sedimentation rates of benthonic organisms are nearly the same in the cores of the Strait of Hormus, whereas near the Central Swell they are smaller. In the upper parts of the two cores of the Strait of Hormus sedimentation rates are higher than in the deeper parts, where higher median values point to stronger reworking. 4. The sequence of coarse and fine grained intervals in the two cores of the Hormus Strait, attributed to variations in climate, as well as the increase of terrigenous supply from the deeper to the upper parts of the cores, agrees with the descriptions in the literature of the post Pleistocene climate as becoming more humid. The rise of sea level is sedimentologically not measurable in the marly sediments - except perhaps for the higher content of echinoids in the lower part of core 1056. These may be attributed to the influence of a migrating wave-base. 5. The late Pleistocene aragonite mud is very fine grained (> 50%< 2 p) and poor in fossils (0.5-1.8%) biogenic particles of total sediment. The sand fraction consists almost entirely of white clumps, c. 0.1 mm in diameter (1177), composed of aragonite needles and of detrital minerals with the same size (1201). The argonite mud was probably not formed in situ, because the water depth at time of formation was at most 35 m at least 12 m. The sorting of the sediment (predominance of the fine grained sand), the absence of larger biogenic components and of pellets, c. 0.2-0.5 mm in diameter, which are typical for Recent and Pleistocene locations of aragonite formation, as well as the sedimentological conditions near the sampling points, indicate rather a transport of aragonite mud from an area of formation in very shallow waters. Sorting as well as lenticular fabric in core 1201 point to sedimentation within the influence of currents. During alternating sedimentation - and reworking processes the aragonitic matrix was separated from the silt - and sand-sized minerals. The lenses grade into touches because of bioturbation. 6. In core 1056 D2 from Hormus Bay the percentages of organic carbon, total nitrogen and total carbonate were determined. With increasing amounts of smaller grain sizes the content of organic matter increases, whereas the amount of carbonate decreases. The amounts of organic carbon and of nitrogen decrease with increasing depth, probably due to early-diagenetic decomposition processes. Most of the total nitrogen is of organic origin, only about 10% may well be inorganically fixed as ammonium-nitrogen. In the upper part of the core the C/N-ratio increases with increasing depth. This may be connected with a stronger decomposition of nitrogen-containing organic compounds. The general decrease of the C/N-ratios in the lower part of the core may be explained by the relative increase of inorganically fixed ammonium-nitrogen with decreasing content of organic matter.

Grain size distribution analysis of prominent beds on Southern Central Chilean seamounts

Gravity cores obtained from isolated seamounts located within, and rising up to 300 m from the sediment-filled Peru-Chile Trench off Southern Central Chile (36°S-39°S) contain numerous turbidite layers which are much coarser than the hemipelagic background sedimentation. The mineralogical composition of some of the beds indicates a mixed origin from various source terrains while the faunal assemblage of benthic foraminifera in one of the turbidite layers shows a mixed origin from upper shelfal to middle-lower bathyal depths which could indicate a multi-source origin and therefore indicate an earthquake triggering of the causing turbidity currents. The bathymetric setting and the grain size distribution of the sampled layers, together with swath echosounder and sediment echosounder data which monitor the distribution of turbidites on the elevated Nazca Plate allow some estimates on the flow direction, flow velocity and height of the causing turbidity currents. We discuss two alternative models of deposition, both of which imply high (175-450 m) turbidity currents and we suggest a channelized transport process as the general mode of turbidite deposition. Whether these turbidites are suspension fallout products of thick turbiditic flows or bedload deposits from sheet-like turbidity currents overwhelming elevated structures cannot be decided upon using our sedimentological data, but the specific morphology of the seamounts rather argues for the first option. Oxygen isotope stratigraphy of one of the cores indicates that the turbiditic sequences were deposited during the last Glacial period and during the following transition period and turbiditic deposition stopped during the Holocene. This climatic coupling seems to be dominant, while the occurrence of megathrust earthquakes provides a trigger mechanism. This seismic triggering takes effect only during times of very high sediment supply to the shelf and slope.