The EU’s Enlargement Strategy 2015: Will the ‘new elements’ make a difference? CEPS Commentary, 26 November 2015

After an unprecedented delay, the European Commission adopted its 2015 Enlargement Package on November 10th, together with the annual reports on each of the candidate and prospective candidate countries. In this Commentary, Erwan Fouéré offers his assessment of what Enlargement Commissioner Johannes Hahn called the “new elements” in the package, including an “overarching strategy for the next 4 years” (coinciding with the remainder of the Commission’s mandate), “much clearer guidance to the countries on what they have to focus on in the year ahead”, as well as on the “longer-term results that are needed to meet EU expectations”.

What caused the eurozone crisis? CEPS Commentary, 27 November 2015

After five years of crisis there are now signs that the eurozone economy is recovering, but it is far from being back to normal. The authors of this CEPS Commentary sound a note of caution: although progress has been made with the banking union and new institutions like the European Stability Mechanism (ESM), more needs to be done. The eurozone crisis may be in remission now but when interest rates start to rise, or if confidence evaporates again due to global shock, the systemic cracks could reappear at an alarming rate.

The 2015 ENP Review: A policy in suspended animation. CEPS Commentary, 1 December 2015

One year after the Juncker Commission took office, the long-awaited official review of the European Neighbourhood Policy ​(ENP) ​was published ​in November 2015. By prioritising interests over values in increasingly atomised partnerships, the policy ​will now aim for pragmatic realism​ in its dealings with a turbulent neighbourhood​. ​But in the absence of the necessary funding to tackle the region’s multiple crises, and without a strategic vision to guide relations with the neighbours of the EU’s neighbours, the new ENP remains in suspended animation.

What drives household consumption in the EU-28? ECRI Commentary No. 19, 4 December 2015

Given that final consumption of households has contributed on average to broadly 60% of EU-28 GDP since 2001, an assessment of the drivers behind its dynamics is quite timely in a context of gradual economic recovery. The empirical analyses presented in this ECRI Commentary, covering 19 of the EU-28 economies, suggest that disposable income of households, consumer credit markets and the developments in housing markets have had a significantly positive impact on the growth of household final consumption since 2001. On the other hand, demographic trends do not seem to have played any significant role.

Household Final Consumption in the EU: The key driver for a sustainable recovery? ECRI Commentary No. 18, 4 December 2015

This commentary finds that after four to five years of poor performance, final consumption of households is expected to recover significantly in 2015 and 2016. This is all the more important since final consumption of households was the main driver of economic growth during the 12 years preceding the financial crisis. Some obstacles still stand in the way, however, preventing a sustainable recovery in private consumption.

Between continuation and adaptation: The Baltic states’ security policy and armed forces. OSW COMMENTARY 190/23.11.2015

The Baltic states have responded to the annexation of Crimea and the increased Russian military activity in the Nordic and Baltic region by taking measures to strengthen their own military potential. At the same time, they have intensified efforts to have the USA and NATO step up their military presence on their respective territories. Changes concerning the security policies and the armed forces of Lithuania, Latvia and Estonia have included increases in defence spending, the number of soldiers and members of volunteer Territorial Defence Forces, speeding up modernisation programmes, and – in the case of Lithuania – the reintroduction of conscription. In the coming years the Baltic states will focus on developing those of their military capabilities directly related to the defence of the country’s territory. However, Lithuania, Latvia and Estonia will not stop participating in the foreign missions of NATO, which is the guarantor of their security. The extent to which these plans can be implemented will depend primarily on the economic and demographic situations of Lithuania, Latvia and Estonia.

End of an energy honeymoon: what’s next for Russia-Turkey energy relations? EPC Commentary, 7 December 2015

Back in the autumn of 2014, the deal between Russia and Turkey on the Turkish Stream pipeline was expected to start a period of close energy cooperation between the two countries, potentially able to change the energy game in the region and consolidate political relations in a long-term perspective. One year later, after announcing the project’s size would be reduced by half, Moscow suspended the negotiations in retaliation to the downing of a Russian fighter jet by the Turkish Air Force at the border between Turkey and Syria. This seems to complement growing doubts about Turkish Stream, which already started as a result of Russia’s military involvement in Syria. From an EU perspective, recent developments raise doubts about Turkey’s role in the Union’s energy strategy.

To be in, or to be out: reflections on the Danish referendum. EPIN Commentary No. 29, 10 December 2015

In this EPIN Commentary, Catharina Sørensen offers her reflections on Denmark’s referendum, held on December 3rd, on whether the country should change its blanket opt-out on all justice and home affairs cooperation in the EU to the more nuanced opt-in model adopted by the UK and Ireland. In her view, the outcome reflected the two separate ‘languages’ deployed in the public debate over the referendum – the emotional discussion about sovereignty, which appealed to the heart, and the technical argument about cooperation, which appealed to reason. In using these two languages, the campaigners spoke past one another, failed to understand each other and divided Denmark into two opposing camps.

Can Schengen survive? CEPS Commentary, 14 December 2015

Against the background of Europe's refugee crisis, not to mention last month's terrorist attacks in Paris, Daniel Gros acknowledges in this Commentary that the core principle of a "Europe without borders" has come under serious attack. He exhorts member states to realise that they can be more secure without sacrificing liberty if they create a common institution to guard the external borders and reinforce the existing framework for internal security.

Will the Single Resolution Fund be a ‘baby tiger’ during the transition? CEPS Commentary, 17 December 2015

The short answer to this question is no! According to the authors’ calculations, even during its early years, the Single Resolution Fund (SRF) should be sufficient to deal with almost any crisis scenario imaginable. They caution, however, that its funding will be built up only gradually over the coming decade and there is thus a legitimate concern that the SRF will not be sufficient to deal with a major crisis.

Relaunching the European Retail Finance Market: Comments on the Commission's Green Paper. ECRI Commentary No. 20, 15 December 2015

The European Commission’s Green Paper on retail financial services, published on December 10th, provides valuable insights into the possible benefits of a single market, as well as the obstacles to its development and the possible remedies. While a greater diversity of products within countries could have a positive impact on both consumers and providers, it is also important to highlight that it could contribute to more effective macroeconomic policies at European level. The development of such a single market for Europe where consumers can confidently purchase more profitable financial products abroad necessitates the establishment of a European body along the lines of the US Consumer Financial Protection Bureau (CFPB), or at least the establishment of closer European supervisory cooperation and enforcement. A framework for the digitalisation of financial services should not only focus on mitigating specific types of risk, such as cyber insecurity, lack of privacy and financial exclusion, but it should also continue to maintain a “space of creation” for innovative financial firms.

Nord Stream II-testing EU and credibility. EPC Commentary, 16 December 2015

In September 2015, Gazprom and major European energy companies (Germany's E.ON and BASF/Wintershall, Austria's OMV, France’s ENGIE and Royal Dutch Shell) signed an agreement to double the Nord Stream gas pipeline’s capacity by 2019. The plan is to transport up to 55 billion additional cubic metres of gas a year to Germany through the Baltic Sea, bypassing Ukraine and other Central-Eastern European countries.

Balancing Priorities and Emergency Measures: Luxembourg’s Council Presidency. EPIN Commentary No. 30/15 January 2016

The Grand Duchy of Luxembourg held the reins of the EU Council presidency between 1 July and 31 December 2015. This was the 12th time that the second-smallest and the richest EU member state1 held the rotating Council presidency. As one of the founding members of the EU, Luxembourg has sound experience to bring to this role. It was, however, their first presidency since the entry into force of the Lisbon Treaty and its introduction of the trio presidency format, this time including Italy and Latvia. Under the slogan ‘A Union for the Citizens’, Luxembourg had the task of concluding certain major dossiers before the end of the trio’s term and was able to contribute to its overarching agenda, especially regarding the priorities of financial stability, growth stimulation and the digital agenda.

Monetary Policy and Public Investment. CEPS Commentary, 14 January 2016

Since the start of 2015, the ECB has been applying quantitative easing (QE), i.e. a programme in which large amounts of money are injected in the economy. Every month the ECB buys €60 billion of government bonds and in so doing injects the same amount of money in the economy. To date, the total amount of liquidity injection approaches €700 billion. On 3 December 2015, the ECB announced that this programme would be continued until February 2017. As a result, the cumulative amount of bond purchases will then reach €1.56 trillion.

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?