spotlight europe #2013/03 – March 2013: The European Union and Russia at a Crossroads

The European Union and Russia are strategic partners – through their geographic situation, their common history, through social and economic obligations. Currently, the EU’s relations with Russia are under pressure for innovation. The EU’s ability to manoeuvre is hindered by the financial crisis, which has developed into a crisis of the Union’s political integration. For that reason, the EU’s relations with Russia depend on the Union’s ability to overcome the crisis and undertake reforms.

Do European Union fines deter price-fixing? Bruegel Policy Brief 2013/04, May 2013

The issue: Anti-cartel enforcement is the least controversial of competition policy themes. Agreements to restrict competition such as price fixing or market sharing have obvious negative effects on welfare. Within the European Union, however, industry representatives have increasingly voiced concern that the European Commission applies a too-strict fining policy to enforce anti-cartel law, particularly since the introduction of new guidelines on fines in 2006. Fines are said to be too high, disproportionate and liable to introduce distortions into the market, ultimately leading to higher prices for consumers. It is often argued that more lenient approaches should be followed in crisis times. Policy challenge: High fines for cartel activity could entail costs for society and might be difficult to implement. Nevertheless, there is no case for reducing current levels of EU anti-cartel fines. Fine levels already take the economic crisis into account, and the net present value of fines might prove to be too low to discourage collusion. We estimate that fines might even be not high enough to offset the additional profits yielded by collusion. Fines should be complemented with other measures to increase deterrence, in particular personal sanctions targeting company officers who are responsible for leading the company to commit infringements. In the short term, pressure on decision makers could be increased by reducing the expected duration of investigations.

A Copernican Turn for Banking Union. CEPS Policy Brief No. 290, 14 May 2013

Despite apparent consensus that the creation of a ‘Banking Union’ is essential for the survival of the euro, progress is painfully slow. The Single Supervisory Mechanism may not be ready before the middle of next year, the Single Resolution Mechanism may require a laborious change of the EU Treaty and common deposit insurance has been postponed into the indefinite future. Any real progress has been prevented by the protracted fights over which government will be the payer of last resort when banks fail because of past bad loans. In this Policy Brief, Thomas Mayer suggests that a radically new approach is needed if there is any prospect of moving beyond this impasse to reach full Banking Union. Instead of trying to move from common bank supervision over to resolution and then on to deposit insurance, he argues that policy-makers should go backwards and start with deposit insurance, move from there to resolution, and end with supervision.

spotlight europe #2013/04, May 2013: The Changing Face of North Africa. An Opportunity for and with Europe.

North Africa is changing fast, and its youthful societies look back with pride at their recent uprisings. However, they are also getting frustrated by the fact that the economic outlook is not improving. Europe’s role in the strategically important southern Mediterranean area needs to be realigned in order to promote the development of democracy, employment opportunities, and security. There is a great deal of potential for cooperation with Morocco, Algeria, Tunisia, Libya and Egypt.

spotlight Europe 2013/04 — Mai 2013: Nordafrika im Wandel – Chancen mit und für Europa = North Africa in change - an opportunity for and with Europe

North Africa’s youthful societies look back with pride at their recent uprisings. However, they are also getting frustrated by the fact that the economic outlook is not improving. Europe’s role in the southern Mediterranean area needs to be realigned in order to promote the development of democracy, employment opportunities, and security. Because "there is a great deal of potential for cooperation with Morocco, Algeria, Tunisia, Libya and Egypt?" argue our authors Christian P. Hanelt and Sven Behrendt.

Approximation to EU Technical Standards with and without the Promise of Membership: the Cases of Slovakia and Ukraine. EU Diplomacy Paper 02/2013

This paper aims to identify the extent to which the non-promise of membership of the European Union (EU) precludes the motivation of Ukraine as European Neighbourhood Policy country to adopt EU policies in the field of market access, namely technical standards and regulations. Its approximation approach is compared to the fast-tracked accession of Slovakia, which was driven by a clear-cut membership promise. Furthermore, the paper elaborates whether the conclusion of an Association Agreement between the EU and Ukraine, including a Deep and Comprehensive Free Trade Agreement, provides sufficient incentives for Ukraine to continue reforming its quality infrastructure in order to gain access to the Single European Market. Finally, scenarios of possible developments of EU-Ukraine relations are deliberated in the context of the EU-Ukraine-Russia triangle. The paper argues that market access provides sufficient stimulus for third countries to adhere to EU technical standards – even in the absence of a clear and credible promise of future EU membership. Yet, in the case of Ukraine, the country’s relations with Russia appear to compete with its EU approximation process, resulting for the time being in Ukraine attempting to pursue a balanced dual cooperation with both the EU and Russia.

Economic Policy Coordination in the Economic and Monetary Union: From Maastricht via the SGP to the Fiscal Pact. CEPS Working Document No. 381, August 2013

This paper first takes a step backwards with an attempt to situate the recent adoption of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union in the context of discussions on the Stability and Growth Pact (SGP) and the ‘Maastricht criteria’, as fixed in the Maastricht Treaty for membership in the Economic and Monetary Union (EMU) in a longer perspective of the sharing of competences for macroeconomic policy-making within the EU. It then presents the main features of the new so-called ‘Fiscal Compact’ and its relationship to the SGP and draws some conclusions as regards the importance and relevance of this new step in the process of economic policy coordination. It concludes that the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union does not seem to offer a definitive solution to the problem of finding the appropriate budgetary-monetary policy mix in EMU, which was already well identified in the Delors report in 1989 and regularly emphasised ever since and is now seriously aggravated due to the crisis in the eurozone. Furthermore, implementation of this Treaty may under certain circumstances contribute to an increase in the uncertainties as regards the distribution of the competences between the European Parliament and national parliaments and between the former and the Commission and the Council.

Elections to the European Parliament and the trouble with vox populi. EPIN Commentary No. 12, 22 August 2013

Declining support for the European Union in many member states is causing some disquiet about the possibility of an even lower voter turnout in the upcoming European Parliament (EP) elections to be held next May. This discontent might well be exploited by populist anti-European parties and boost protest-vote participation, cautions Sonia Piedrafita in this EPIN Commentary, and this would pose a serious risk for EU decision-making and undermine the sense of common identity and any plans for further integration. This Commentary, which looks at the elections from an EU perspective, is the first in a series of Commentaries by EPIN (European Policy Institutes Network) that will examine the outlook for the European Parliament elections in various member states.

Assessing the Single Supervisory Mechanism: passing the point of no return for Europe's banking union. Egmont Paper No. 58, June 2013

From the Executive Summary. Europe’s financial and sovereign debt crises have become increasingly interconnected. In order to break the negative feedback loop between the two, the EU has decided to create a common supervisory framework for the banking sector: the Single Supervisory Mechanism (SSM). The SSM will involve a supervisory system including both the national supervisors and the European Central Bank (ECB). By endowing the ECB with supervisory authority over a major part of the European banking sector, the SSM’s creation will result in a shake-up of the way in which the European financial sector is being supervised. Under the right circumstances, this could be a major step forward in addressing Europe’s interconnected crises.

Research and teaching the European Union in Latin America. Jean Monnet/Robert Schuman Paper Series Special, December 2012

NOTE: there is an appendix to this document on the Archive at ei.pitt.edu/29784/ From the Introduction. The tasks of research, teaching and public opinion outreach activities on the European Union in the Latin American subcontinent2 are propelled by two principal motivations. In the first place, interest on the EU originates from the historical proximity between Europe and Latin America. There are no other two regions in the world with a deeper mutual affinity than the one existing between Europe and the conglomerate composed by Latin America and the Caribbean. Only the intimate relationship forged by the United States with the Europe continent is perhaps stronger, and even more special with the United Kingdom.

European Union-Latin American relations in a turbulant era. Jean Monnet/Robert Schuman Paper Series Vol. 12, Special December 2012

From the Introduction. The mere mentioning of “the Trans-Atlantic Relationship” generates a standard interpretation. Customary understanding claims that it is supposed to deal with the links between Europe and the United States (moderately expanded to include Canada, a country taken for granted). This is a view shared both in Brussels and Washington. This geographical concept very rarely refers to include the role of Mexico, for example. This “relationship” is never understood as triangular, formed by three partners (United States/Canada, Europe and Latin America/Caribbean). A quadrangular format, including Africa, is contemplated only in a bilateral sense (usually when one of the important partners (the United States or Europe) is considered as a protagonist. In sum, “Atlantis” (as an entity shared by all) is as mysterious and difficult to grasp as the myth of antiquity, as a problem that this volume surely tries to grasp and analysis.

The European Union and the United States, before the election: a much deeper mutual understanding. Jean Monnet/Robert Schuman Paper Series Vol. 12 Special, October 2012

From the Introduction. Governor Romney’s statement that President Obama was trying to convert the United States into a European state actually served to point out the need for a much deeper understanding of both entities to make considerable progress in the future. The need for a close alliance is taken for granted. However, the link is riddled with confusion and stereotypes. This relationship is considered a normal fact forged by mutual historical legacies. Hence the frequent signs of awkward behaviour and misunderstandings under the cover of the notion that potential damage will be corrected by the force of the special relationship. If conflicts are detected, both parties are said to be condemned to agree. If a lack of knowledge is detected, it will be modified by accessible means. Mechanisms for an understanding and cooperation are within reach. Therefore, an effective relationship is not utopian. However, there are areas in which much work is needed to strengthen the alliance and correct its shortcomings. There is a need, not only for agreements in economic and political issues, but also for a deeper understanding of the essence of both entities.

Putin’s grand design to destroy the EU’s Eastern Partnership and replace it with a disastrous neighbourhood policy of his own. CEPS Commentary, 17 September 2013

This new Commentary by Michael Emerson and Hrant Kostanyan shows how the pressure exerted by President Putin on Armenia to withdraw from the Deep and Comprehensive Free Trade Agreement it had negotiated with the EU and to join the Belarus, Kazakhstan and Russia customs union is but the most recent in a long series of ongoing moves by Russia to destroy the Eastern Partnership. In their view, the message to be hammered home to those unsure of the economic arguments is that you do not have to have an exclusive customs union to enjoy deep integration for goods, services, people and capital, and of course even less for hard security relationships. High-quality free trade agreements are the logical instrument for those who want excellent relations with more than one big neighbour.

With or without you...judging politically in the field of Area of Freedom, Security and Justice? Research Papers in Law, 3/2007

From the Introduction. The study of the European Court of Justice’s (ECJ) case law of the regarding the Area of Freedom Security and Justice (AFSJ) is fascinating in many ways.1 First, almost the totality of the relevant case law is extremely recent, thereby marking the first ‘foundational’ steps in this field of law. This is the result of the fact that the AFSJ was set up by the Treaty of Amsterdam in 1997 and only entered into force in May 1999.2 Second, as the AFSJ is a new field of EU competence, it sets afresh all the fundamental questions – both political and legal – triggered by European integration, namely in terms of: a) distribution of powers between the Union and its member states, b) attribution of competences between the various EU Institutions, c) direct effect and supremacy of EU rules, d) scope of competence of the ECJ, and e) measure of the protection given to fundamental rights. The above questions beg for answers which should take into account both the extremely sensible fields of law upon which the AFSJ is anchored, and the EU’s highly inconvenient three-pillar institutional framework.3 Third, and as a consequence of the above, the vast majority of the ECJ’s judgments relating to the AFSJ are a) delivered by the Full Court or, at least, the Grand Chamber, b) with the intervention of great many member states and c) often obscure in content. This is due to the fact that the Court is called upon to set the foundational rules in a new field of EU law, often trying to accommodate divergent considerations, not all of which are strictly legal.4 Fourth, the case law of the Court relating to the AFSJ, touches upon a vast variety of topics which are not necessarily related to one another. This is why it is essential to limit the scope of this study. The content of, and steering for, the AFSJ were given by the Tampere European Council, in October 1999. According to the Tampere Conclusions, the AFSJ should consist of four key elements: a) a common immigration and asylum policy, b) judicial cooperation in both civil and penal matters, c) action against criminality and d) external action of the EU in all the above fields. Moreover, the AFSJ is to a large extent based on the Schengen acquis. The latter has been ‘communautarised’5 by the Treaty of Amsterdam and further ‘ventilated’ between the first and third pillars by decisions 1999/435 and 1999/436.6 Judicial cooperation in civil matters, mainly by means of international conventions (such as the Rome Convention of 1981 on the law applicable to contractual obligations) and regulations (such as (EC) 44/20017 and (EC) 1348/20008) also form part of the AFSJ. However, the relevant case law of the ECJ will not be examined in the present contribution.9 Similarly, the judgments of the Court delivered in the course of Article 226 EC proceedings against member states, will be omitted.10 Even after setting aside the above case law and notwithstanding the fact that the AFSJ only dates as far back as May 1999, the judgments of the ECJ are numerous. A simple (if not simplistic) categorisation may be between, on the one hand, judgments which concern the institutional setting of the AFSJ (para. 2) and, on the other, judgments which are related to some substantive AFSJ policy (para. 3).

Mass Surveillance of Personal Data by EU Member States and its Compatibility with EU Law. CEPS Liberty and Security in Europe No. 61, 6 November 2013

In the wake of the disclosures surrounding PRISM and other US surveillance programmes, this paper assesses the large-scale surveillance practices by a selection of EU member states: the UK, Sweden, France, Germany and the Netherlands. Given the large-scale nature of these practices, which represent a reconfiguration of traditional intelligence gathering, the paper contends that an analysis of European surveillance programmes cannot be reduced to a question of the balance between data protection versus national security, but has to be framed in terms of collective freedoms and democracy. It finds that four of the five EU member states selected for in-depth examination are engaging in some form of large-scale interception and surveillance of communication data, and identifies parallels and discrepancies between these programmes and the NSA-run operations. The paper argues that these programmes do not stand outside the realm of EU intervention but can be analysed from an EU law perspective via i) an understanding of national security in a democratic rule of law framework where fundamental human rights and judicial oversight constitute key norms; ii) the risks posed to the internal security of the Union as a whole as well as the privacy of EU citizens as data owners and iii) the potential spillover into the activities and responsibilities of EU agencies. The paper then presents a set of policy recommendations to the European Parliament.