China’s slowdown: When the dragon catches the flu, Europe sneezes. CEPS Commentary, 25 September 2015

Notwithstanding the erratic stock market responses around the world, this CEPS Commentary argues that while a slowdown of the world’s second-largest economy may not be good news for Europe, its effects will not be as bad as headlines would have us believe. In the short term, it finds that the biggest risks from the Chinese slowdown may be political, stemming from a weakening of the Renminbi, either from actions taken by China’s central bank and/or from large capital outflows.

The Greek elections and the third bailout programme: Why it could work this time round. CEPS Commentary, 21 September 2015

Following the decisive victory won by the Syriza party in Greece’s general election on September 20th, this commentary explores the key question of whether the third bailout programme can work, where the previous two programmes failed. Whereas most observers argue that the third one cannot work because it merely represents a continuation of an approach that has manifestly failed, the authors argue that a closer inspection of the conditions today give grounds for cautious optimism.

What signal from the Fed? Should the ECB ease further? CEPS Commentary, 18 September 2015

The Federal Reserve left rates unchanged at its closely-watched meeting on September 17th, although many had argued that the real economy data, especially on the labour market, would have justified an exit (from the zero interest policy). In this CEPS Commentary, Daniel Gros observes that no similar decision on exit is in sight in the euro area, despite the fact that some have argued that the ECB should consider further easing measures (pushing the deposit rate deeper into negative territory or increasing the size of its asset purchase programme). He asks, in fact, whether further easing measures should be even discussed at this point.

Where is the credit crunch in Greece? CEPS Commentary, 6 October 2015

Greek policy-makers like to make the point that their economy cannot recover because of a lack of credit and that this affects exports, in particular. Austerity is an easy explanation for the weakness of domestic demand, argues Daniel Gros in this CEPS Commentary, but it is more difficult to see why Greek exports have stagnated in recent years. The author considers the argument that the Greek economy could not recover via export-led growth because of a credit crunch. The overall availability of credit was higher than GDP, and interest rates remained relatively low. There is some indication of a misallocation of bank credit, but the responsibility for any mistakes in this direction must lie squarely with the government and the Troika, given that the Greek banking system has been under government control since 2012.

Light and shadows in Europe’s new Action Plan for Capital Markets Union. ECMI Commentary No. 40/5 October 2015

The European Commission’s Action Plan consists, in a nutshell, of a short list of technical proposals and a longer one of (rather general) potential actions. Overall, the plan indeed proposes to achieve some short-term objectives, such as a reduction of listing costs for SMEs, but it lacks long-term vision. The plan bundles actions under rather generic objectives of long-term finance or cross-border investing. Improving the informational infrastructure (e.g. accounting standards, company data) and cross-border enforcement of rules is left to vaguely defined future actions, but these constitute the core of the capital markets infrastructure. Without a well-defined set of measurable objectives, the whole plan may lose political momentum and become an opportunity for interested parties to cherry pick their pet provisions. Building a single market, i.e. removing cross-border obstacles to capital circulation, is too challenging a task to simply appear as one of many items on a long list of general objectives, which incidentally do not include institutional reform. The ultimate risk is that the Commission may just miss a unique opportunity to revamp and improve the financial integration process in Europe after almost a decade of harmful financial retrenchment.

Low-cost batteries will not disrupt (all) energy utilities. CEPS Commentary, 5 October 2015

With the launch last April of an affordable lithium-ion home battery – the Powerwall – Tesla’s CEO Elon Musk is betting that batteries are going to become a mass market. This may very well become reality, but this commentary argues that one should not jump to the conclusion that this is the end of energy utilities. Similar to solar panels, batteries have high upfront costs. The massive deployment of solar was driven by dedicated policy support, in many cases without any kind of cost or volume control. There is no such thing for batteries. In the absence of financing programmes, the author finds that high upfront costs provide an unfavourable starting point for a disruptive development. But he notes that the fact that self-consumption of stored solar energy will soon pay for consumers represents a paradigm shift in the power industry, which should be seen as an opportunity, at least for first-movers.

Detailed CMU Action Plan, but more (ambition) is required. ECMI Commentary No. 39/2 October 2015 Friday, 2 October 2015

The concrete outcome of the Commission’s Action Plan for a Capital Markets Union (CMU) consists notably of a call for the removal of constraints to facilitate SME financing and recognition of the need to facilitate infrastructure financing and securitisation through changes to the solvency II Directive and the capital requirements Regulation. However useful these proposals may prove to be, this Commentary finds that they do not address the main problem in Europe’s capital markets, namely that European household savings are not finding their way into more rewarding investments, which is caused by a variety of factors that cannot be easily changed.

To adopt refugee quotas or not: Is that the question? CEPS Commentary, 2 October 2015

One of the most controversial initiatives taken by the EU in response to the recent influx of refugees has been a provisional relocation system, aimed at the distribution of 120,000 asylum-seekers from Greece and Italy to other EU member states. This commentary explores the flaws in the current Dublin system and evaluates whether the new approach will prove more effective and humane.

Strangers among us. Non-governmental organisations in Russia. OSW COMMENTARY 2015-09-29

The situation of the third sector in Russia, i.e. the civil society structures independent from the state, is worsening on a regular basis. The Kremlin’s actions aimed at paralysing and destroying the independent non-governmental sector seen over the past four years have been presented as part of a struggle for the country’s sovereignty. This is above all a consequence of the Russian government’s efforts to take full control of the socio-political situation in the country while it also needs to deal with the geopolitical confrontation with the West and the worsening economic crisis. The policy aimed against non-governmental organisations is depriving the public of structures for self-organisation, protection of civil rights and the means of controlling the ever more authoritarian government. At the same time, the Kremlin has been depriving itself of channels of co-operation and communication with the public and antagonising the most active citizens. The restrictive measures the Kremlin has taken over the past few years with regard to NGOs prove that Russian decision-makers believe that any social initiative independent of the government may give rise to unrest, which is dangerous for the regime, and – given the economic slump – any unrest brings unnecessary political risk.

Nord Stream II – Another test for EU unity. EPC Commentary, 9 October 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 meters of gas a year to Germany through the Baltic Sea, bypassing Ukraine and other Central-Eastern European countries.

What direction for Turkey? A plea for political reconciliation. EPIN Commentary No. 26/14 October 2015

Even before the recent terrorist attacks in Ankara, Turkey was a country in crisis. In this EPIN Commentary Umut Uzer attempts to shed light on the political turbulence and increasing polarisation in the country, and makes a plea for a return to consensus-building ahead of the fresh round of elections in November. The author also calls upon the EU to offer incentives to Turkey to continue on the path of EU membership, but if membership is out of the question, then other platforms for cooperation should be negotiated. The EU should speak in a candid manner and make clear what kind of future relationship it envisages for Turkey, because now, more than ever, cooperation is in both their interests.

China's ETS: A vote of confidence in carbon markets ahead of Paris. CEPS Commentary, 12 October 2015

In this CEPS commentary, Andrei Marcu welcomes the recent announcement by President Xi Jinping that China will start a national emissions trading scheme in 2017. Calling it a "genuine game changer" in the global climate talks, Marcu describes the decision as giving a much-needed boost to carbon markets and cap-and-trade as the preferred way forward for those economies that have the capacity, the depth and the breadth for a liquid carbon market.

A Common Refugee Integration Fund. EPC Commentary, 15 October 2015

The refugee crisis will be dominating discussions at the EU Summit. Cooperating with third countries, especially Turkey; border controls, hotspots, relocation and returns will all feature. These discussions reflect that the EU is in crisis response mode, attempting to deal with the sheer scale of the current flows and the rapidly evolving situation, as well as internal divisions.

The End of German Hegemony. CEPS Commentary, 16 October 2015

Without anyone quite noticing, Europe’s internal balance of power has been shifting. As Daniel Gros observes in this commentary, Germany’s dominant position, which has seemed absolute since the 2008 financial crisis, is gradually weakening – with far-reaching implications for the European Union.

The October 2015 European Council and migration: no news, good news? EPC Commentary, 19 October 2015

The October European Council meeting took place after an unprecedented sequence of actions, with the Luxembourgish Presidency, the European Commission and the Council adopting and proposing a series of legislative and operational measures (including inter alia relocation decisions, the establishment of “hotspots”, increasing funds, the modification of the Dublin rules and the adoption of safe country of origins lists) to address the refugee crisis. Some of these measures were on the European Council agenda, such as the future of the Dublin system, the role of “hotspots” and the strengthening of the external borders. However, the meeting did not go as planned, with some items being dropped off the agenda and replaced by other ones.