The ‘Lisbonisation’ of the European Parliament: Assessing progress, shortcomings and challenges for democratic accountability in the area of freedom, security and justice. CEPS Paper on Liberty and Security in Europe No. 58, September 2013

This paper examines the performance of the European Parliament in EU AFSJ law and policy-making from the entry into force of the Lisbon Treaty until the end of the first half of 2013. The paper situates the EP in the new post-Lisbon institutional setting, documenting its transition to ‘AFSJ decision-maker’, and its new powers to shape and make policy covering the EU’s internal and external security agenda. While the paper finds that the EP has become an active co-owner of the EU AFSJ post-Lisbon, with the Parliament demonstrating a dynamic adjustment to its new post-Lisbon role and powers, the authors identify a set of new developments and challenges that have arisen in the conduct of democratic accountability by the EP in the AFSJ since 2009, which call for critical reflection ahead of the new parliamentary term 2014-2019 and the post-2014 phase of the EU’s AFSJ.

Memo to Merkel: Post-election Germany and Europe. Bruegel Policy Brief 2013/05, 24 September 2013

Recent economic data points to the seeds of an economic recovery in the European Union. However, significant risks remain and bold policies are still needed. There are three central risks. Competitiveness adjustment is incomplete, casting doubt on the sustainability of public debt. Banking remains unstable and fragmented along national lines, resulting in unfavorable financial conditions, which further erode growth, job creation and competitiveness. Rising unemployment, especially among the young, is inequitable, unjust and politically risky. Germany has a central role to play in addressing these risks. The new German government should work on three priorities: Domestic economic policy should be more supportive of growth and adjustment, with higher public investment, a greater role for high-value added services, and more supportive immigration policy. Germany should support a meaningful banking union with a centralised resolution mechanism requiring a transfer of sovereignty to Europe for all countries including Germany. The establishment of a private investment initiative combined with a European Youth Education Fund and labour market reforms should be promoted. Building on these priorities, a significant deepening of the euro area is needed, with a genuine transfer of sovereignty, stronger institutions and democratically legitimate decision-making structures in areas of common policy.

La disoccupazione giovanile in tempo di crisi: un monito all’Europa (continentale) per rifondare il diritto del lavoro? = Youth Unemployment in Recessionary Times: a Caveat to (Continental) Europe to Reconstruct its Labour Law. WP C.S.D.L.E. "Massimo D'Antona" .INT - 91/2012

The current debate taking place in continental Europe on the need to reform labour law to reduce the duality between labour market insiders and outsiders, thus giving new employment opportunities to young people seems to be, at its best, a consequence of the crisis, or at its worst, an excuse. The considerable emphasis placed on the power of legislation to reduce youth unemployment prevents real labour market problems from being clearly identified, thus reducing the scope to adopt more effective measures. Action is certainly required to help young people during the current crisis, yet interventions should not be exclusively directed towards increased flexibility and deregulation. This paper questions the “thaumaturgic power” wrongly attributed to legislative interventions and put forward a more holistic approach to solve the problem of youth employment, by focusing on the education systems, school-to-work transition and industrial relations. As a comparative analysis demonstrates, in order to effectively tackle the issue of youth employment, it is not enough to reform labour law. High quality education systems, apprenticeship schemes, efficient placement and employment services, cooperative industrial relations and flexible wage determination mechanisms are the key to success when it comes to youth employment, not only in times of recession.

Global and regional financial safety nets: lessons from Europe and Asia. Bruegel Working Paper 2013/06 [07?], November 2013

The Asian financial crisis (1997) and the European crisis (2009) have both contributed to the development and deepening of regional safety net arrangements. This paper analyses the relationships between global and regional financial safety nets, and uncovers the potential tensions and operational challenges associated with the involvement of several institutional players with potentially different interests, analytical biases and governance. The G20 has acknowledged the importance of these new players for the international monetary system, but the principles for cooperation between the IMF and regional financing arrangements are far too broad and ad hoc to contribute to a coherent and effective architecture. This paper tries to establish some lessons learned from the Asian financial crisis in 1997 and the current European crisis in order to enhance the effectiveness, efficiency, equity and governance of these arrangements. In particular, it proposes changes to the IMF articles of agreement to allow for lending or guarantees to regional arrangements directly and it establishes some key desirable features and practices of regional mechanisms that should be adopted everywhere to ensure some global consistency, particularly in the field of macroeconomic surveillance, programme design and conditionality.

The Visegrad group and Germany: towards a new paradigm. CEPS Commentary, 28 November 2013

In surveying the strategic realignment now underway in Central Europe among the four members of the Visegrad Group, Michal Simecka observes in a new CEPS Commentary that it is hard to think of another point in modern history that permitted a scenario of Germany and its eastern neighbours working together to constructively shape Europe.

Rule of law or rule of thumb? A new Copenhagen mechanism for the EU. CEPS Policy Brief No. 303, 20 November 2013

This Policy Brief synthesises the main research findings and policy recommendations presented in the CEPS e-book entitled The Triangular Relationship between Fundamental Rights, Democracy and Rule of Law: Towards an EU Copenhagen Mechanism” (http://www.ceps.eu/book/triangular-relationship-between-fundamental-righ...). The authors examine the ways in which the European Union could strengthen and develop its competences in the assessment of member states’ fundamental rights, democracy and rule of law commitments. They argue that a strong political impetus is needed at Union level in order to set up a new supervisory “Copenhagen Mechanism” that would effectively and periodically evaluate member states’ compliance with democratic rule of law with fundamental rights on the basis of independent academic expertise, and by ensuring a high level of democratic accountability and judicial oversight at European levels. The Policy Brief also aims at summarising CEPS’ contribution to the upcoming Conference “Assises de la Justice: Shaping Justice Policies in Europe for the Years to Come” organised by the European Commission in Brussels on 21-22 November 2013.

Towards a Dynamic Asia-Europe Meeting (ASEM)? EU Centre Singapore Working Paper No. 14, May 2013

The Asia-Europe Meeting (ASEM) launched in 1996 is into its 17th year, and has expanded from a membership of  26 to 51. ASEM membership is made up of 10 ASEAN countries, the ASEAN Secretariat, China, Japan, South Korea,  Mongolia,  Bangladesh,  India,  Pakistan, Australia, New  Zealand  and  Russia  on the Asian side,  and the  27  EU  member states,  the  European  Commission,  Norway  and  Switzerland  on  the  European side.  Yet,  with such  impressive and diverse membership accounting for around 60% of the world’s population, 50% of global GDP,  and up to 60% of world trade, it remains relatively unknown in the public domain. There is also a palpable sense  that not all is well as interest in ASEM (particularly among the leaders) may wane without adequate follow‐up  actions, concrete deliverables and improved visibility.    The  challenges faced by ASEM were discussed in a recent Symposium in Yangzhou organised by the Chinese  government and co‐sponsored by Laos, India, Poland and the Asia‐Europe Foundation (ASEF).    Into its 17th year, ASEM remains essentially a forum for dialogue. After an initial euphoria following the launch   of the inaugural summit in Bangkok in 1996, symbolising Asia’s and Europe’s commitment to step up engagement  with each other, ASEM has since been plagued by the perennial questions of its lack of effectiveness, efficacy and  visibility, and doubts about sustained interest by its political leaders in light of the lack of concrete deliverables.   This paper drawn in part from an earlier article on The Asia‐Europe Meeting (ASEM) in the Palgrave Handbook on  EU‐Asia Relations (2013), and from the discussions at the above ASEM Symposium, will begin with an examination  of the on‐going debates with regards to the challenges faced by ASEM and the various suggestions to address  some  of these  challenges.  The  paper will  conclude with some  observations  on the real  issues  behind these  debates and a prognosis on the future development of ASEM.   

Global Solutions, Local Damages: A Critical Study in Judicial Councils in Central and Eastern Europe. Research Paper in Law 07/2013

This article examines why, how, and with what results have judicial councils spread under the influence of European institutions throughout Central and Eastern Europe in the course of the last twenty years. It first traces back how the judicial councils, themselves just one possible form of administration of courts, have emerged as the recommended universal solution Europe-wide and internationally. Second, it discusses how has this model been exported under the patronage of European and international institutions to transition countries in Central and Eastern Europe. Assessing, thirdly, the reality of the functioning of such new judicial councils in these countries, in particular in Slovakia and Hungary, with the Czech Republic without a judicial council providing a counter-example, it is suggested that their impact on further judicial and legal transition has been either questionable or outright disastrous. This brings, eventually, into question the legitimacy as well as the bare reasonableness of the entire process of European/international standards setting and their later marketing or in reality rather imposition onto the countries in transition.

The EU and ASEAN – In Search of a New Regional Paradigm? EU Centre Singapore Working Paper No. 15, August 2013

The European Union (EU) has been hailed as the most successful model of regional integration thus far, while the Association of Southeast Asian Nations (ASEAN), despite its fair share of critics and doomsayers, has been seen as a relatively successful regional organisation in the developing world. However, both seemed to have arrived at a critical juncture in their respective regional projects. Challenged by recent events, internal and external, and faced with increasing uncertainties and complexities, the EU and ASEAN are forced to re-examine the journey they have taken so far and ponder the road ahead. This paper seeks first to provide an overview of the two parallel processes of regionalism in Europe and Southeast Asia by focusing on the developments of the EU and ASEAN, and dissecting both the external forces and internal dynamics that shape the respective regional processes. It then sketches out some of the global trends likely to impact regional developments in Europe and Asia, and questions if the EU and ASEAN would need a new regional approach or paradigm if they are to maintain their salience and relevance as regional actors.

Impact of the Decarbonisation of the Energy System on Employment in Europe. CEPS Special Report No. 82, February 2014

This paper presents a methodology for calculating the potential impact of the new socio-ecological transition away from fossil fuels on employment in EU energy supply. The methodology is based on “employment factors” (i.e. labour intensities) of different energy technologies. These employment factors are applied to changing energy mixes as projected by the decarbonisation scenarios of the European Commission’s Energy Roadmap 2050. In particular, we analyse quantitative (number of jobs) and qualitative (qualification levels) impacts on employment in extraction and processing of primary (fossil) fuels and in the power sector for the years 2020, 2030 and 2050. The results show that the energy sector will provide not only more jobs as the new socio-ecological transition unfolds, but also jobs requiring higher-level qualifications when compared with the current energy sector.

Cameron’s reality check on Europe. EPIN [Working] Paper No. 38, 15 April 2014

Ever since Prime Minister David Cameron made his major speech on Europe on 23 January 2013, in which he argued for some kind of new deal between the UK and the EU, the rest of the EU as well as the British public have been wondering what he would actually propose in operational terms. On 15 March 2014, the Prime Minister offered at least an interim reply to these questions in an article in the Daily Telegraph newspaper. This paper extracts from the Daily Telegraph article the main ideas that the Prime Minister advances. In all, 10 propositions are identified, presented in the precise language used, followed by an appraisal. The article has not attracted so much attention, mainly because its content is not particularly sensational, but that is its real importance and quality. It points the way towards resolving what otherwise would mean a huge political crisis for the UK and the EU. The Prime Minister gave the overall impression that he is not now heading towards making an impossibly difficult list of demands. On the contrary, an informed and moderate realism seems to be in the making. The package outlined in this paper could be sold in Brussels. There would then have to be a robust communications campaign to sell it to the British public. This paper is part of a series for a CEPS-EPIN project on “The British Question and the Search for a Fresh European Narrative”, which is pegged to an ambitious ongoing exercise by the British government to review all the competences of the European Union. The intention is that this should provide a basis for informed debate before the referendum on the UK remaining in the EU or not, which is scheduled for 2017.

Europe between financial repression and regulatory capture. Bruegel Working Paper 2014/08, July 2014

From the Introduction. In the long shadow of the euro-area crisis, the relationship between governments and their banks has been brought to the the centre of the policy debate in Europe by the implementation of regulatory reforms, the risks associated with financial fragmentation, and the fight to sustain the flow of credit to governments and corporates. The attempt to interpret the patterns of pressure and influence running between governments and their financial system has led commentators to rediscover and give new life to concepts originating from academic debates of the 1970s such as “regulatory capture” and “financial repression”. Government agencies have been frequently described as being at the mercy of the financial sector, often allowing financial interests to hijack political, regulatory and supervisory processes in order to favouring their own private interests over the public good1. An opposite view has instead pointed the finger at governments, which have often been portrayed as subverting markets and abusing the financial system to their benefit, either in order to secure better financing conditions to overcome their own financial difficulties, or with the objective of directing credit to certain sectors of the economy, “repressing” the free functioning of financial markets and potentially the private interests of some of its participants2

Trade policy issues in the Wider Europe – that led to war and not yet to peace. CEPS Working Document No. 398, July 2014

This paper looks at the trade policy landscape of the EU and the wider Europe, with a focus on issues arising from the signature on 27 June 2014 of Deep and Comprehensive Free Trade Agreements (DCFTAs) between the EU and three East European countries (Georgia, Moldova and Ukraine), and actual or prospective issues relating to the customs union of Belarus, Russia and Kazakhstan (BRK), and the Eurasian Economic Union whose founding treaty was signed on 29 May 2014. The huge expansion of intercontinental free trade area negotiations currently underway, in which the EU is an active participant alongside much of the Americas and Asia, stands in contrast with Russia’s choice to restrict itself to the Eurasian Economic Union, which is only a marginal extension of its own economy. Alone among the major economies in the world, Russia does not seek to integrate economically with any major economic bloc, which should be a matter of serious concern for Moscow. Within the wider Europe, the EU’s DCFTAs with Ukraine, Moldova and Georgia are a major new development, but Russia now threatens trade sanctions against Ukraine in particular, the economic case for which seems unfounded and whose unilateral application would also impair the customs union. The Belarus-Russia-Kazakhstan customs union itself poses several issues of compatibility with the rules of the WTO, which in turn are viewed by the EU as an impediment to discussing possible free trade scenarios with the customs union, although currently there are far more fundamental political impediments to any consideration of such ideas. Nonetheless, this paper looks at various long-term scenarios, if only as a reminder that there could be much better alternatives to the present context of conflict around Ukraine.

Asset-backed securities: The key to unlocking Europe's credit markets? Bruegel Policy Contribution 2014/07, 24 July 2014

The European market for asset-backed securities (ABS) has all but closed for business since the start of the economic and financial crisis. ABS (see Box 1) were in fact the first financial assets hit at the onset of the crisis in 2008. The subprime mortgage meltdown caused a deterioration in the quality of collateral in the ABS market in the United States, which in turn dried up overall liquidity because ABS AAA notes were popular collateral for inter-bank lending. The lack of demand for these products, together with the Great Recession in 2009, had a considerable negative impact on the European ABS market. The post-crisis regulatory environment has further undermined the market. The practice of slicing and dicing of loans into ABS packages was blamed for starting and spreading the crisis through the global financial system. Regulation in the post-crisis context has thus been relatively unfavourable to these types of instruments, with heightened capital requirements now necessary for the issuance of new ABS products. And yet policymakers have recently underlined the need to revitalise the ABS market as a tool to improve credit market conditions in the euro area and to enhance transmission of monetary policy. In particular, the European Central Bank and the Bank of England have jointly emphasised that: “a market for prudently designed ABS has the potential to improve the efficiency of resource allocation in the economy and to allow for better risk sharing... by transforming relatively illiquid assets into more liquid securities. These can then be sold to investors thereby allowing originators to obtain funding and, potentially, transfer part of the underlying risk, while investors in such securities can diversify their portfolios... . This can lead to lower costs of capital, higher economic growth and a broader distribution of risk” (ECB and Bank of England, 2014a). In addition, consideration has started to be given to the extent to which ABS products could become the target of explicit monetary policy operations, a line of action proposed by Claeys et al (2014). The ECB has officially announced the start of preparatory work related to possible outright purchases of selected ABS1. In this paper we discuss how a revamped market for corporate loans securitised via ABS products, and how use of ABS as a monetary policy instrument, can indeed play a role in revitalising Europe’s credit market. However, before using this instrument a number of issues should be addressed: First, the European ABS market has significantly contracted since the crisis. Hence it needs to be revamped through appropriate regulation if securitisation is to play a role in improving the efficiency of resource allocation in the economy. Second, even assuming that this market can expand again, the European ABS market is heterogeneous: lending criteria are different in different countries and banking institutions and the rating methodologies to assess the quality of the borrowers have to take these differences into account. One further element of differentiation is default law, which is specific to national jurisdictions in the euro area. Therefore, the pool of loans will not only be different in terms of the macro risks related to each country of origination (which is a ‘positive’ idiosyncratic risk, because it enables a portfolio manager to differentiate), but also in terms of the normative side, in case of default. The latter introduces uncertainties and inefficiencies in the ABS market that could create arbitrage opportunities. It is also unclear to what extent a direct purchase of these securities by the ECB might have an impact on the credit market. This will depend on, for example, the type of securities targeted in terms of the underlying assets that would be considered as eligible for inclusion (such as loans to small and medium-sized companies, car loans, leases, residential and commercial mortgages). The timing of a possible move by the ECB is also an issue; immediate action would take place in the context of relatively limited market volumes, while if the ECB waits, it might have access to a larger market, provided steps are taken in the next few months to revamp the market. We start by discussing the first of these issues – the size of the EU ABS market. We estimate how much this market could be worth if some specific measures are implemented. We then discuss the different options available to the ECB should they decide to intervene in the EU ABS market. We include a preliminary list of regulatory steps that could be taken to homogenise asset-backed securities in the euro area. We conclude with our recommended course of action.

Improving the role of equity crowdfunding in Europe's capital markets. Bruegel Policy Contribution Issue 2014/09, August 2014

Crowdfunding is a growing phenomenon that encompasses several different models of financing for business or other ventures. Despite the hype, equity crowdfunding is still the smallest part of the crowdfunding market. Because of its legal framework, Europe has been at the forefront of equity crowdfunding market development. Equity crowdfunding is more complex than other forms of crowdfunding and requires proper checks and balances if it is to provide a viable channel for financial intermediation in the seed and early-stage market in Europe. It is important to explore this new channel of funding for young and innovative firms given the critical role these start-ups can play job creation and economic growth in Europe. We assess the potential role of equity crowdfunding in the overall seed and early-stage financing market and highlight the potential risks of equity crowdfunding. We describe the current state of play in this nascent industry, considering both the innovations introduced by market operators and existing regulation. Currently in Europe there is a patchwork of national legal frameworks related to equity crowdfunding and this should be addressed in a harmonised way.