The fiscal implications of a banking union. Bruegel Policy Brief 2012/02 [3?], September 2012

Systemic banking crises are a threat to all countries whatever their development level. They can entail major fiscal costs that can undermine the sustainability of public finances. More than anywhere else, however, a number of euro-area countries have been affected by a lethal negative feedback loop between banking and sovereign risk, followed by disintegration of the financial system, real economic fragmentation and the exposure of the European Central Bank. Recognising the systemic dimension of the problem, the Euro-Area Summit of June 2012 called for the creation of a banking union with common supervision and the possibility for the European Stability Mechanism to recapitalise banks directly.

What distinguishes the euro crisis from a ‘normal’ financial crisis? CEPS Commentary, 6 November 2012

This Commentary attempts to discern the distinguishing features between the present euro crisis and the financial crisis brought on in the US by the subprime lending disaster and the ensuing collapse of banks and other financial institutions in 2007-08. It finds that whereas the US was able to bring its crisis to an end by socialising the dubious debt and stabilising its valuation so that it could migrate to other investors capable of bearing the risk, this pattern can be only partly repeated in the eurozone, where both debt socialisation and a return to normal risk assessment are more problematic.. It concludes, nevertheless, that the crisis should now abate somewhat given that most risk-averse institutions have by now sold their holdings of peripheral countries’ sovereign debt and especially in light of the ECB’s assurances that it will not allow the euro to disintegrate.

The Prize is more Peace: The EU should consolidate its enlargement process. CEPS Commentary, 8 November 2012

The sovereign debt crisis and the threat of financial collapse of some EU member states have triggered fierce debate about the economic, social and political finalité of the Union and curbed the appetite for further enlargement. The European Commission needs to find new ways to consolidate the enlargement agenda, gain full support of the member states for its implementation and assure a consistent application of the pre-accession requirements. Arguably, more time, more money and greater expertise are needed to pursue the vocation recognised by the Nobel Committee.

The known unknowns and the unknown unknowns of the EMU. Bruegel Policy Contribution 2012/18, October 2012

Extensive prior research on the economics of European monetary union highlighted some potential risks (the known unknowns) but overlooked others (the unknown unknowns). Asymmetries among participating countries, the potentially destabilising character of a one-size-fits all monetary policy, the weakness of adjustment mechanisms, the lack of incentives for fiscal discipline, the possibility of sovereign solvency crises and their adverse consequences were all known and understood. But policymakers often relied on a complacent reading of the evidence. • The potential for financial disruption was vastly underestimated. Economists generally did not consider, or underestimated, the possibility of balance of payment crises such as those experienced by southern European countries, or the risk of a feedback loop between banks and sovereigns. • Remedying EMU’s systemic deficiencies is on the policy agenda. Banking union would go a long way towards addressing the fault lines. The urgent question for economists is if it is going to be enough and, if not, what else should complement the ‘bare-bones’ EMU of Maastricht.

When the rising dragon sees fading stars: China's view of the European Union. CEPS Special Report No. 73, 29 November 2012

This CEPS Special Report gives an overview of China’s perceptions of the EU and the protection of Chinese investments in Europe since the outbreak of the European sovereign debt crisis, especially since the more concrete talks in late 2011 on possible financial support from China. Although the top leadership of the communist party of China (CPC) changed in its recent handover, the perceptions described in this paper are likely to remain the same, just as the main tenets of China’s foreign policy are unlikely to change in the near future. The report argues that while the EU’s image has suffered greatly from the sovereign debt crisis and the way it has been handled, there is room to improve China’s view of Europe and for the EU to maintain a relatively strong negotiation position towards China.

Private long-term investment in uncertain times. Bruegel Policy Contribution 2012/23, December 2012

The economic and financial crisis in Europe is affecting the financing of long-term infrastructure investment. There are multiple clearly identifiable channels: reduced demand for long-term investment, a tightening prudential framework for lending, upward adjustment of risk perception, complex transition of the financial system, and increasing macroeconomic, sovereign and regulatory risk. Some of the identified channels are potentially dangerous spillovers from the crisis that entail the risk of a downward spiral (eg increasing regulatory risk), while others are efficient market responses (eg reduced investment demand, correction of pricing of risk). Consequently, public policy instruments should not address the accessibility of long-term finance per se, but should explicitly target the critical channels.

Structure development in electrospun fibres of gelatin

Gelatin fibres have been successfully electrospun from water by heating a gelatin solution above the sol-gel transition temperature, and allowing cooling in a controlled environment as the fibres are produced. The development of structure with in these fibres is monitored using wide angle x-ray scattering, in this way the presence of the triple helix structure, which provides the physical cross-linkages in the gel could be probed. There is clear evidence that these structures are obtained in gelatin electrospun from aqueous solutions. In contrast fibres electrospun from a solution of gelatin in glacial acetic acid, showed no evidence of the triple helix structure.

The Upper Valanginian (Early Cretaceous) positive carbon-isotope event recorded in terrestrial plants

Our understanding of the ancient ocean-atmosphere system has focused on oceanic proxies. However, the study of terrestrial proxies is equally necessary to constrain our understanding of ancient climates and linkages between the terrestrial and oceanic carbon reservoirs. We have analyzed carbon-isotope ratios from fossil plant material through the Valanginian and Lower Hauterivian from a shallow-marine, ammonite-constrained succession in the Crimean Peninsula of the southern Ukraine in order to determine if the Upper Valanginian positive carbon-isotope excursion is expressed in the atmosphere. delta(13)C(plant) values fluctuate around -23% to -22% for the Valanginian-Hauterivian, except during the Upper Valanginian where delta(13)C(plant) values record a positive excursion to similar to-18%. Based upon ammonite biostratigraphy from Crimea, and in conjunction with a composite Tethyan marine delta(13)C(carb) curve, several conclusions can be drawn: (1) the delta(13)C(plant) record indicates that the atmospheric carbon reservoir was affected; (2) the defined ammonite correlations between Europe and Crimea are synchronous; and (3) a change in photosynthetic carbon-isotope fractionation, caused by a decrease in atmospheric PCO2, occurred during the Upper Valanginian Positive delta(13)C excursion. Our new data, combined with other paleoenvironmental and paleoclimatic information, indicate that the Upper Valanginian was a cool period (icehouse) and highlights that the Cretaceous period was interrupted by periods of cooling and was not an equable climate as previously thought. (C) 2005 Elsevier B.V. All rights reserved.

Can genetically-modified cotton contribute to sustainable development in Africa?

Genetically modified (GM) crops and sustainable development remain the foci of much media attention, especially given current concerns about a global food crisis. However, whilst the latter is embraced with enthusiasm by almost all groups, GM crops generate very mixed views. Some countries have welcomed GM, but others, notably those in Europe, adopt a cautious stance. This article aims to review the contribution that GM crops can make to agricultural sustainability in the developing world. Following brief reviews of both issues and their linkages, notably the pros and cons of GM cotton as a contributory factor in sustainability, a number of case studies from resourcepoor cotton farmers in Makhathini Flats, South Africa, is presented for a six-year period. Data on expenditure, productivity and income indicate that Bacillus thuringiensis (Bt) cotton is advantageous because it reduces costs, for example, of pesticides, and increases income, and the indications are that those benefits continued over at least the six years covered by the studies. There are repercussions of the additional income in the households; debts are reduced and money is invested in children's education and in the farms. However, in the general GM debate, the results show that GM crops are not miracle products which alleviate poverty at a stroke, but nor is there evidence that they will cause the scale of environmental damage associated with indiscriminate pesticide use. Indeed, for some GM antagonists, perhaps even the majority, such debates are irrelevant – the transfer of genes between species is unnatural and unethical. For them, GM crops will never be acceptable despite the evidence and pressure to increase world food production.

Soil fertility management in the mid-hills of Nepal: Practices and perceptions

Sustaining soil fertility is essential to the prosperity of many households in the mid-hills of Nepal, but there are concerns that the breakdown of the traditional linkages between forest, livestock, and cropping systems is adversely affecting fertility. This study used triangulated data from surveys of households, discussion groups, and key informants in 16 wards in eastern and western Nepal to determine the existing practices for soil fertility management, the extent of such practices, and the perception of the direction of changes in soil fertility. The two principal practices for maintaining soil fertility were the application of farmyard manure (FYM) and of chemical fertilizer (mainly urea and diammonium phosphate). Green manuring, in-situ manuring, slicing terrace risers, and burning plant residues are rarely practiced. FYM usage was variable with more generally applied to khet land (average 6053 kg fresh weight manure ha(-1)) than to bari land (average 4185 kg fresh weight manure ha-1) with manure from goats and poultry preferred above that from cows and buffaloes. Almost all households (98%) apply urea to khet land and 87% to bari land, with 45% applying diammonium phosphate to both types of land. Application rates and timings of applications varied considerably both within and between wards suggesting poor knowledge transfer between the research and farming communities. The benefits of chemical fertilizers in terms of ease of application and transportation in comparison with FYM, were perceived to outweigh the widely reported detrimental hardening of soil associated with their continued usage. Among key informants, FYM applied in conjunction with chemical fertilizer was the most popular amendment, with FYM alone preferred more than chemical fertilizer alone - probably because of the latter's long-term detrimental effects. Key informant and householder surveys differed in their perception of fertility changes in the last decade probably because of differences in age and site-specific knowledge. All key informants felt that fertility had declined but among households, only about 40% perceived a decline with the remainder about evenly divided between no change and an increase. Householders with small landholdings (< 0.5 ha) were more likely to perceive increasing soil fertility while those with larger landholdings (> 2 ha) were more likely to perceive declining fertility. Perceived changes in soil fertility were not related to food self-sufficiency. The reasons for the slow spread of new technologies within wards and the poor understanding of optimal use of chemical fertilizers in conjunction with improved quality FYM may repay further investigation in terms of sustaining soil fertility in this region.

A review of palaeoclimates and palaeoenvironments in the Levant and Eastern Mediterranean from 25,000 to 5000 years BP: setting the environmental background for the evolution of human civilisation

The southern Levant has a long history of human habitation and it has been previously suggested that climatic changes during the Late Pleistocene-Holocene stimulated changes in human behaviour and society. In order to evaluate such linkages, it is necessary to have a detailed understanding of the climate record. We have conducted an extensive and up-to-date review of terrestrial and marine climatic conditions in the Levant and Eastern Mediterranean during the last 25,000 years. We firstly present data from general circulation models (GCMs) simulating the climate for the last glacial maximum (LGM), and evaluate the output of the model by reference to geological climate proxy data. We consider the types of climate data available from different environments and proxies and then present the spatial climatic "picture" for key climatic events. This exercise suggests that the major Northern Hemisphere climatic fluctuations of the last 25,000 years are recorded in the Eastern Mediterranean and Levantine region. However, this review also highlights problems and inadequacies with the existing data. (c) 2006 Elsevier Ltd. All rights reserved.

The heliospheric magnetic field over the Hale cycle

The concept that open magnetic flux of the Sun (rooted with one and only one footpoint at the Sun) is a conserved quantity is taking root in the heliospheric community. Observations show that the Sun's open magnetic flux returns to the baseline from one solar minimum to the next. The temporary enhancement in the 1 AU heliospheric magnetic flux near solar maximum can be accounted for by the temporary creation of closed magnetic flux (with two footpoints at the Sun) during the ejection of coronal mass ejections (CMEs), which are more frequent near solar maximum. As a part of the International Heliophysical Year activities, this paper reviews two recently discussed consequences of open flux conservation: the reversal of open magnetic flux over the solar cycle driven by Coronal Mass Ejections and the impacts of open flux conservation on the global structure of the heliospheric magnetic field. These studies demonstrate the inherent linkages between coronal mass ejections, footpoint motions back at the Sun, and the global structure and evolution of the heliospheric magnetic field.

Towards an assessment of multiple ecosystem processes and services via functional traits

Managing ecosystems to ensure the provision of multiple ecosystem services is a key challenge for applied ecology. Functional traits are receiving increasing attention as the main ecological attributes by which different organisms and biological communities influence ecosystem services through their effects on underlying ecosystem processes. Here we synthesize concepts and empirical evidence on linkages between functional traits and ecosystem services across different trophic levels. Most of the 247 studies reviewed considered plants and soil invertebrates, but quantitative trait–service associations have been documented for a range of organisms and ecosystems, illustrating the wide applicability of the trait approach. Within each trophic level, specific processes are affected by a combination of traits while particular key traits are simultaneously involved in the control of multiple processes. These multiple associations between traits and ecosystem processes can help to identify predictable trait–service clusters that depend on several trophic levels, such as clusters of traits of plants and soil organisms that underlie nutrient cycling, herbivory, and fodder and fibre production. We propose that the assessment of trait–service clusters will represent a crucial step in ecosystem service monitoring and in balancing the delivery of multiple, and sometimes conflicting, services in ecosystem management.

Stages of organizational transformation in transition economies: A dynamic capabilities approach

How do organizations previously dominated by the state develop dynamic capabilities that would support their growth in a competitive market economy? We develop a theoretical framework of organizational transformation that explains the processes by which organizations learn and develop dynamic capabilities in transition economies. Specifically, the framework theorizes about the importance of, and inter-relationships between, leadership, organizational learning, dynamic capabilities, and performance over three stages of transformation. Propositions derived from this framework explain the pre-conditions enabling organizational learning, the linkages between types of learning and functions of dynamic capabilities, and the feedback from dynamic capabilities to organizational learning that allows firms in transition economies to regain their footing and build long-term competitive advantage. We focus on transition contexts, where these processes have been magnified and thus offer new insights into strategizing in radically altered environments.