Ensuring the EU’s future as a security provider Five recommendations for the June European Council’s session on CSDP. EPC Commentary, 23 June 2015

On 25 and 26 June 2015, the Heads of State or Government of the European Union (EU) will convene to discuss the implementation of their Conclusions on the Common Security and Defence Policy (CSDP) from December 2013. A substantial and frank debate among EU leaders is urgently needed in order to forge a lasting and credible vision for CSDP.

Solidarity and asylum seekers: member states agreed to disagree. EPC Commentary, 29 June 2015

At the June 2015 European Council, European leaders were meant to come to an agreement in order to help Italy and Greece cope with the increasing number of migrants and asylum seekers arriving on their shores. They were invited to give their agreement on a proposal from the European Commission to set up a mandatory relocation scheme, i.e. a scheme defining the precise number of asylum seekers that should be relocated to each member state over the next two years.

Nord Stream expansion: what does it mean for Europe? EPC Commentary, 2 July 2015

Two announcements in sequence have shaken the energy debate on 18 and 19 June. Gazprom announced the signature of a Memorandum of Understanding with Shell, Exon and OMV for the construction of strings 3 and 4 of Nord Stream, aiming at doubling the current 55 bcm capacity of the corridor running in the Baltic sea bed and connecting the Russian terminal of Vyborg to Germany. On the day after, a €2 bn deal between Russia and Greece was signed for extending the Turkish Stream project into Greek territory. ...

Restructuring the Greek banking sector with an empty purse. CEPS Commentary, 13 July 2015

Greek banks are close to collapse, even if a new bail-out programme is agreed soon. The deterioration of the economy means that their fragile capital position is deteriorating further. In this CEPS Commentary, Daniel Gros observes that any new programme needs to include recapitalisation, comprising possibly a bail-in and restructuring to get the banking system working again. With only a small part of the assets unencumbered and a government with empty pockets, the depositors might have to take a large part of the burden. As private investors are unlikely to participate in a recapitalisation, foreign official funds will be needed. A direct equity investment by the EIB or the EBRD could be used to transfer control rights, and special ESM bonds could be used to provide additional capital without entailing additional risk to the creditors

Poor Greeks or lazy Greeks? CEPS Commentary, 13 July 2015

Drawing on a wide array of statistical indicators reflecting economic activity, states of poverty, structural reform and governance in Greece, this Commentary by Ilaria Maselli provides substance to a debate that has become highly inflammatory and superficial in the latest episodes.

EU-Iran relations post-Vienna: the way forward. EPC Commentary, 16 July 2015

From the Introduction. After 18 days of marathon talks over Iran’s nuclear programme, the E3 plus 3 (US, Russia, China, Britain, France, Germany) and Iran agreed on the final text of the Joint Comprehensive Plan of Action (JCPOA), opening a new chapter in relations between Iran and the West after a 12-year standoff.

Keep capital markets union simple. ECMI Commentary No. 38/July 2015

A few additional initiatives will need to be taken before a European capital markets union is able to unleash its full potential. The main problem is fragmentation, arising from the deep differences existing from one country to another in the structure of markets, user preferences and the availability of well organised, long-term saving schemes. Several attempts have been made to address these barriers, but with limited or uneven success so far

Evolving Patterns of Euroscepticism in the Danish Political Landscape. EPIN Commentary No. 25/15 July 2015

Catharina Sørensen observes in this new EPIN Commentary that the most significant result of the Danish elections on June 18th was not the change of government from centre-left to centre-right, but rather the possibility that the anti-immigration, anti-European integration Danish People’s Party (DPP) would also enter government. While its leadership elected not to do so, but rather to exercise influence from outside, the author further notes that one positive outcome of a new pro-European government that is dependent on a largely eurosceptic supporting party could be that EU issues will finally get the prominence in Danish politics that they deserve.

EU Climate and Energy Governance: There’s more to it than meets the eye. CEPS Commentary, 14 July 2015

In this new CEPS Commentary, a team of climate and energy specialists argue that a reliable system of climate and energy governance in the EU would certainly need to go beyond the issues that are identified in the 2030 framework for climate and energy and the Energy Union. In their view, such a system would consist of no less than seven complex areas, which they proceed to outline and discuss their interrelationships. To ensure that these areas are dealt with in an integrated manner, they recommend that the European Commission creates a roadmap – possibly in the form of a Communication – that would indicate the direction, interactions and a timeline for their adoption.

A game played according to Lukashenka’s rules: the political opposition in Belarus. OSW COMMENTARY NUMBER 176, 08.07.2015

The Belarusian opposition is currently experiencing its deepest crisis since Alyaksandr Lukashenka took power in 1994. Following many months of negotiations, opposition leaders failed to select a joint candidate for the presidential election scheduled for 11th October. The failure of this latest round of talks has proven that not only is the opposition unlikely to threaten Lukashenka’s rule; it will not even be able to demonstrate to society that it could provide a genuine alternative to the present government.

Are student workers a threat or a solution? CEPS Commentary, 14 July 2015

The massification of tertiary education means that a significant percentage of young people participate in tertiary education while also working. They can be seen as a threat – as cheap and highly qualified competition for low-skilled workers in casual jobs who are setting aside their studies for the time being in favour of immediate income. Or they might present an opportunity – a natural way for a large percentage of young people to gain experience and contact with the labour market without the need for massive government programmes. The authors argue in this CEPS commentary that student work is more of an opportunity than a threat.

The nuclear deal with Iran: Le moment suprême? CEPS Commentary, 16 July 2015

More than two years in the making, the agreement concluded by China, the EU, France, Germany, Russia, the UK and the US with Iran to prevent the ‘weaponisation’ of the latter’s nuclear programme is a big deal. But, cautions Steven Blockmans in this CEPS Commentary, it is not the silver bullet to the normalisation of relations. Implementation will be a tortuous process, fraught with suspicion and friction. Although Europe has been called upon to seize the moment and to shift to a relationship with Iran based on engagement, not containment, the EU and its member states would be better advised not to move beyond their nuclear focus too quickly, but rather to show a sense of duty and loyal cooperation with their international partners by supporting the effective execution of the accord.

Addressing the immediate needs of the Greek banks. CEPS Commentary, 31 July 2015

Based on a detailed calculation of the recapitalisation requirements of the Greek banks, we find that the sector needs an infusion of capital, but that the level largely depends on the stringency of the capital requirements applied. An expedient quick fix to comply with the minimum capital requirements could be achieved by a bail-in of existing creditors under the EU Bank Recovery and Resolution Directive of around €5 billion, leaving only €6 billion needed for re-capitalisation. If the ‘Cypriot’ standard is applied, however, the required re-capitalisation would be €15 billion. A ‘generous’ approach, which takes into account the phasing in of the new more-stringent capital requirements until 2018, would imply a re-capitalisation of €29 billion (or more bailing-in of creditors). The re-capitalisation should be undertaken preferably by the EIB, the EBRD or the new Greek investment fund, rather than via loans from the ESM to the Greek government.

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.

Why Greece declined a euro holiday. CEPS Commentary, 6 August 2015

In a new CEPS Commentary, Daniel Gros speculates on why the Greek government suddenly turned an about-face on July 13th and conceded to terms that not only controverted its own promises, but also closely resembled those that voters had overwhelmingly rejected in a popular referendum barely a week earlier?