Political economy of the Agenda 2010 reforms: How Gerhard Schröder overcame the "blocked republic". ACES Cases No. 2008.3

This essay will show that the Schröder-led government managed to break the political gridlock and introduce the Agenda 2010 because key institutional structures of Germany‟s political economy had lost their obstructive powers. In other words, the formerly semi-sovereign state had reclaimed its sovereignty. To understand how this happened, Peter Katzenstein's concept of the semi-sovereign state is first explored as a framework through which to analyze economic policy continuity and change. Within this framework, the causes for constant reform inertia between 1982 and 2002, in spite of varying political constellations and changes in the country‟s economic structure, are then discussed. This analysis will demonstrate that the Agenda 2010 reforms are predominantly a result of underlying incremental change in the political economy and its effect on the political decision-making process. Finally, the findings of this analysis are summarized and discussed with the aim of better understanding the economic policies of the current grand coalition government of the CDU/CSU and the SPD government under Chancellor Angela Merkel.

The Relevance of International Spillovers and Asymmetric Effects in the Taylor Rule. CEPS Working Document No. 403, February 2015

Deviations of policy interest rates from the levels implied by the Taylor rule have been persistent before the financial crisis and increased especially after the turn of the century. Compared to the Taylor benchmark, policy rates were often too low. This paper provides evidence that both international spillovers, for instance international dependencies in the interest rate-setting of central banks, and nonlinear reaction patterns can offer a more realistic specification of the Taylor rule in the main industrial countries. The inclusion of international spillovers and, even more, nonlinear dynamics improves the explanatory power of standard Taylor reaction functions. Deviations from Taylor rates tend to be smaller and their negative trend can be eliminated.

Green, Pink & Silver? The Future of Labour in Europe, Vol. 2. CEPS Paperback, 3 March 2015

Work is both an essential part of our daily lives and one of the major policy concerns across Europe. In this second volume of The Future of Labour in Europe, the authors explain in accessible language the findings of the NEUJOBS project on the job prospects of key industries and groups of people. They use three colours – green, pink and silver – to pinpoint areas with the largest challenges as well as the greatest potential. The conclusions are addressed to policy-makers, the business world, journalists, fellow academics and to anyone interested in the shape, size and character of the labour markets of tomorrow.

Mapping competitiveness with European data. Bruegel Blueprint 23, 6 March 2015

Europe needs improved competitiveness to escape the current economic malaise, so it might seem surprising that there is no common European definition of competitiveness, and no consensus on how to consistently measure it. To help address this situation, this Blueprint provides an inventory and an assessment of the data related to the measurement of competitiveness in Europe. It is intended as a handbook for researchers interested in measuring competiveness, and for policymakers interested in new and better measures of competitiveness. MAPCOMPETE has been designed to provide an assessment of data opportunities and requirements for the comparative analysis of competitiveness in European countries at the macro and the micro level.

Progress on the “Juncker Plan” continues – but are Member States behind it? EPC Commentary, 18 March 2015

Introduction. The draft regulation on the Juncker Investment Plan was presented by the European Commission in January and has been discussed by the Ecofin Council on 10 March. This leaves sufficient time for the European Parliament to express its views and to make the Plan operational by the summer, as aimed for by President Juncker. But while governments agreed swiftly, ministers did not decide on two issues that are of importance: the eligibility of projects that have benefited from the Connecting Europe Facility (CEF) and the Horizon 2020 programmes and the contributions of the national promotional banks (NPBs) to the investment plan. This commentary argues that the foreseeable engagement of NPBs remains unsatisfactory.

Transnational Globalization & Regional Governance. CES Germany & Europe Working Papers, No. 06.2, July 1996

Since the end of the 1980s, international relations has experienced a resurgence of regionalism in Europe (Single Market, Maastricht) and the Americas (NAFTA, MERCOSUR). Why did regional economic cooperation gain mo­ mentum? Theoretical approaches have proved the relevance of institutions, intergovernmental bargains, and na­ tional interest formation for the emergence of cooperation, but fall short in explaining why new cooperative moves happened in the late 1980s and early 1990s and not earlier. This paper argues that the simultaneous con­vergence of interests favoring regional organization of states was stimulated by transnational globalization. Since the early 1980s, states had to adapt to the pressures from transnational globalization, from actors and systems which are not shaped by national territories and interests, and which undermined traditional national economic policy and domestic coalitions. Under the new circumstances, joint regional governance on specific policy areas became an attractive option to respond to new constraints. With the conceptualization of transnational globalization as an explanatory factor for regional cooperation this paper does not dismiss other approaches, but rather attempts to complement the research agenda by shedding light on a crucial-but often neglected-aspect of international relations.

Quantifying Non-Tariff Measures for TTIP. Paper No. 12 in the CEPS-CTR project ‘TTIP in the Balance’ and CEPS Special Report No. 116/July 2015

This paper provides an overview of methods employed to quantify non-tariff measures (NTMs) and then analyses their differences and looks at what these mean for the Transatlantic Trade and Investment Partnership (TTIP) negotiations. The authors find several similarities in the approaches taken. Because all studies conclude that NTMs matter, they argue that policy-makers are right to focus on ‘regulatory cooperation’ in TTIP. Given the significant differences in NTMs across sectors, policy-makers are urged to dive deep into sector-specific elements of NTMs and focus on those sectors where the largest potential gains can be made (i.e. where NTMs are highest, such as in agriculture, automobiles, steel, textiles and insurance services). An area identified for further research is the fact that unlike trade taxes (i.e. tariffs), regulatory barriers to trade are not generally targeted as the primary policy objective, but rather stem from other strategic policy concerns such as consumer safety and/or social and environmental protection. This element should be further investigated.

What do Eurozone academics think about EMU reform? On broad support and German exceptionalism. Bruges Political Research Papers 41/2015.

This paper is an empirical contribution to the literature on the formation of policy preferences on Economic and Monetary Union (EMU) reform within its Member States. In the aftermath of the euro crisis, many proposals to ‘complete’ EMU have been tabled. However, discord among Member States has led to a piecemeal restructuring of EMU. For this paper, a survey has been conducted among euro area academic experts, gauging preferences on EMU reform. We find that general consensus masks significant discord among academics from different Member States. Our data indicates the existence of conflicting national epistemic communities, bound by shared causal beliefs on macro-economic policy. Academics within the key creditor Member State, Germany, assume an outlier position. Within the sample of German academics, economists are particularly strongly opposed to all moves in the direction of fiscal or social union. As economists are those academic experts most likely to influence the economic policy beliefs dominant among the German policy elite, these results are highly politically salient. We confront these findings with the literature on the exceptionalism of German economics. We contend that our results substantiate the claim that inadequate EMU reform and, more generally, the EU approach to the Eurozone crisis, can be partially explained by the firm grip these economic doctrines hold over the economics profession and policy-making circles in Germany.

German macro: how it's different and why that matters. EPC Discussion Paper, May 2016

Do the macroeconomics of the German political establishment really differ from standard western macroeconomics? That question was the starting point for the seminar on ‘German macro: How it’s Different and Why that Matters’, which was held at Heriot-Watt University in December 2015, with financial support from the Scottish Institute for Research in Economics (SIRE) and the Money, Macro & Finance Research Group (MMF). This ebook, edited by George Bratsiotis and David Cobham, is the result of that exercise; six of the papers were presented at the seminar in earlier versions, and the editors sought some additional papers to complete the range of perspectives offered. The authors all sought out to discover whether or not there is something unique about German macroeconomics, and in what ways it differs from standard western macroeconomics; is it true that the former neglects demand management (although it may be quite interventionist in other ways), rejects debt relief and emphasises structural reform designed to improve competitiveness as the (only) key to economic growth? How much of whatever difference exists is due to a well worked out set of ideas in the form of Ordoliberalism? In what way does it relate to Germany’s own experiences in different periods? And how far is this the result of political preferences and how much do the idiosyncrasies of these German views matter, for the development of the Eurozone and indeed the health of the German economy?

Synthesis Report on Structural Reforms in Member States. Report addressed to the Council and the Commission. 8 March 1999.

The Economic Policy Committee (EPC) is made up of representatives of the Member States and contributes to the work of the Economic and Monetary Affairs Council as regards the coordination of Member State and Community economic policies. The EPC also provides the Commission and the Council with advice in this area, focusing particularly on structural reforms.

Annual Report on Structural Reforms 2001. Report addressed to the Council and the Commission. 6 March 2001.

3rd report. The Economic Policy Committee (EPC) is made up of representatives of the Member States and contributes to the work of the Economic and Monetary Affairs Council as regards the coordination of Member State and Community economic policies. The EPC also provides the Commission and the Council with advice in this area, focusing particularly on structural reforms.

Annual Report on Structural Reforms 2002. 5 March 2002.

4th report. The Economic Policy Committee (EPC) is made up of representatives of the Member States and contributes to the work of the Economic and Monetary Affairs Council as regards the coordination of Member State and Community economic policies. The EPC also provides the Commission and the Council with advice in this area, focusing particularly on structural reforms.

Annual Report on Structural Reforms 2003. “Shifting up a Gear. The Case for Speeding up Reform”. 28 February 2003.

The Economic Policy Committee (EPC) is made up of representatives of the Member States and contributes to the work of the Economic and Monetary Affairs Council as regards the coordination of Member State and Community economic policies. The EPC also provides the Commission and the Council with advice in this area, focusing particularly on structural reforms.

Annual Report on Structural Reforms 2004. “Reinforcing implementation”. 3 February 2004.

The Economic Policy Committee (EPC) is made up of representatives of the Member States and contributes to the work of the Economic and Monetary Affairs Council as regards the coordination of Member State and Community economic policies. The EPC also provides the Commission and the Council with advice in this area, focusing particularly on structural reforms.

Annual Report on Structural Reforms 2005. “Increasing Growth and Employment”. 11 January 2005.

The Economic Policy Committee (EPC) is made up of representatives of the Member States and contributes to the work of the Economic and Monetary Affairs Council as regards the coordination of Member State and Community economic policies. The EPC also provides the Commission and the Council with advice in this area, focusing particularly on structural reforms.