The Central European Predicament. Jean Monnet/Robert Schuman Paper Series Vol. 14 No. 9, May 2014

From Introduction. Central and Eastern Europe (CEE) has experienced a very deep economic and political transformation since the beginning of the nineties. The early years of transition were characterized by big hopes for a quick and successful development. The international community, including the EU and the USA showed interest in the transformation of the region for a number of reasons. From a geopolitical perspective, the transformation was of tremendous importance as it confirmed the end of the cold war and the bipolar global system was replaced first by a unipolar superpower system and later gave way to a multipolar or a new bipolar system. This also signaled the weakness of the Soviet Union (and later Russia), as it was not able to prevent this transformation and was soon mired in a serious and long lasting economic and political crisis that undermined its international position. After the dissolution of the Soviet Union during the nineties Russia remained very weak, both economically and politically. The power vacuum and the transformation in Central Europe made the establishment of a new international economic and security structure possible. The new economic and political pattern that started to develop within the region was based on the liberal market economy model, with the objective of opening up markets and integrating the region into the world economy and the North Atlantic security structure.

Europe on the Road to the Third Stage of EMU: Recent Evidence. CES Germany & Europe Working Papers, No. 07.2, 1996

The paper deals with Europe's effort to proceed to the thud stage of EMU and establish a common currency. It is argued that the success of the common currency experiment will greatly depend on the fulfillment of the Optimum Currency Area (OCA) criteria, on the adoption of the proper adjustment policies as well as on the political desirability of the project. The paper is organized as follows: Section 1 deals briefly with the index of criteria that define an OCA. Section 2 examines the extent to which Europe experiences common demand disturbances, while sections 3 and 4 focus on evidence about the mobility of factors of production across Europe, namely labor and capital. Section 5 examines the possibility of an increase in trade volume across the EU under fixed exchange rates or a common currency regime. Section 6 sheds light on the possibility of the EURO (the ex-ECU} to become a vehicle currency in the international financial system, and Section 7 is concerned with the benefits and costs of the establishment of a European Central Bank (ECB), paying special attention to seigniorage revenues. Section 8 deals with the necessity of establishing an EU federal mechanism facilitating adjustment. Section 9 sketches out a proper role for a hegemonic power in a common currency regime. Finally, section 10 examines EMU prospects during the transitional period. The paper closes with some concluding remarks, where the role of politics and coordination of economic policies are particularly emphasized as of cardinal importance on the road to the third stage of EMU.

Greece & the European Agenda: EU Enlargement and European Monetary Union. CES Germany & Europe Working Papers, No. 08.2, 1998

In the decade to come, the European Union will embark on two new projects, each destined to transform it in fundamental ways: (i) Eastern enlargement, and (ii) economic and monetary union. Neither of these projects will affect all members equally or in the same way. But Greece will, for two reasons, be affected in a manner qualitatively different to all other member states. First, Greece is the only country physically affected by the Luxembourg Summit's decision to begin accession negotiations with some, but not all, Central and Eastern European applicant countries: as a result of this decision, she will continue, for at least another eight to ten years, to be the only member country not to share a common border with another member state, with all the consequent implications in economic and geostrategic terms. Second, when the European Council meets in early May to select those member states that are deemed to have met the convergence criteria, it will find that Greece is the only member state falling short of those criteria. This development may create additional difficulties for her economy during the transitional period of derogation. It will also pose new risks to Greece, insofar as she will be absent during the initial-and crucial-years of establishing a common monetary policy.

The Goldkrieg: Revaluing the Bundesbank's Reserves and the Politics of EMU. CES Germany & Europe Working Papers, No. 08.6, 1998

In May and June 1997, Germany's commitment to Economic and Monetaty Union (EMU) underwent its most serious test ever when the Bundesbank and the government of Chancellor Helmut Kohl dashed openly over the government's plans to revalue the country's gold reserves. Faced with a budget short-fall and strong political opposition to either tax increases or spending cuts, Finance Minister Waigel attempted to introduce a modest change in the Bundesbank's bookkeeping procedures to bring them in line with the standard practices at other European central banks. The Bundesbank resisted, arguing that the changes would infringe upon its closely guarded independence. This paper analyzes how the politics of coalition interacted with Germany's political institutions to cause this conflict.

Localizing EU Gender Policy: The Diffusion of Gender Mainstreaming across Feminist Movements in Eastern Germany. CES Germany & Europe Working Papers, No. 08.1, June, 2008

Gender mainstreaming emerged in the mid-1990s as an innovative and controversial policy tool for reducing gender inequalities. The European Union seeks to propagate the practice of gender mainstreaming both within EU institutions and among member states. Feminist scholars and policy elites discuss and debate gender main-streaming widely, but have yet to consider how local feminist activists, who could play a central role in diffusing gender mainstreaming, understand, interpret and respond to this agenda. This paper examines whether and why local feminist movements in two cities in eastern Germany adopt gender mainstreaming. Consideration of the characteristics of the contexts in which local feminist movements are embedded clarifies the conditions under which social movements rally round new policy paradigms.

The Vulnerability of Europe's Small and Medium-Sized Banks. Bruegel Working Paper 2015/07, 16 July 2015

We study the vulnerability of 130 banks directly supervised by the European Central Bank’s Single Supervisory Mechanism. Illustrative stress tests using banks’ balance sheet data reveal that significant stress prevails in the euro area’s smaller and medium-sized banks, many of them located in southern Europe. The banks we identify as stressed also have performed substantially worse on the stock market. The vulnerable banks are typically hobbled by non-performing loans to European businesses. Strengthening the banking system, therefore, is important to achieve sustainable recovery because it will revitalise credit to the healthier segments of the economy. But instead of emphasising bank recapitalisation, as in past years, we believe the task is to shrink the banking sector to a healthier core.

Flashlight Europe N°5–June 2015. OMT is Monetary Policy and Not Economic Policy

In January 2014, for the first time in its history, the German Federal Constitutional Court submitted several questions to the European Court of Justice (ECJ) in Luxembourg and asked for a preliminary ruling. The questions had arisen within the framework of the OMT case, and the issue was whether or not the OMT (“outright monetary transactions”) programme announced by Mario Draghi, the head of the European Central Bank (ECB), is in compliance with the law of the European Union. The OMT programme (which has be-come well-known because Draghi said “what-ever it takes to preserve the euro” when he unveiled it) plays an important role in the stabilization of the euro area. It means that the European System of Central Banks will be empowered to engage in unlimited buying of government bonds issued by certain Member States if and as long as these Member States are simultaneously taking part in a European rescue or reform programme (under the EFSF ot the ESM). Hitherto the OMT has not been implemented. Nonetheless a suit contesting its legality was filed with the Federal Constitutional Court. The European Court of Justice now had to decide whether or not the activities of the ECB were in compliance with European law. How-ever, the ECJ had to take into account the prior assessment of the Federal Constitutional Court. In its submission the Federal Constitutional Court made it quite clear that it was of the opinion that there has been a violation of European law. But at the same time it did not exclude the possibility that the ECJ set up legal conditions for OMT in order to avoid a violation of European law.

Flashlight Europe N°6–June 2015. Waiting for the Five Presidents’ Report on the Future of the Monetary Union: What do we need to know?

At the European Summit on 25-26 June Jean-Claude Juncker, the President of the European Commission, will be presenting a report on the future of the Economic and Monetary Union (EMU). It has been drawn up by the presidents of the EU Commission, the European Council, the European Central Bank, the European Parliament, and the Eurogroup, and is a sequel to the “Four Presidents’ Report” on the same topic that was compiled without the participation of the President of the European Parliament and presented in 2012. In this Flashlight we provide answers to key questions about the forthcoming report.

The German Constitutional Court’s decision about the European Central Bank’s OMT [Outright Monetary Transactions] mechanism: A masterpiece of judicial arrogance. European Policy Briefs No. 30, April 2014

The German Constitutional Court (BVG) recently referred different questions to the European Court of Justice for a preliminary ruling. They concern the legality of the European Central Bank’s Outright Monetary Transaction mechanism created in 2012. Simultaneously, the German Court has threatened to disrupt the implementation of OTM in Germany if its very restrictive analysis is not validated by the European Court of Justice. This raises fundamental questions about the future efficiency of the ECB’s monetary policy, the damage to the independence of the ECB, the balance of power between judges and political organs in charge of economic policy, in Germany and in Europe, and finally the relationship between the BVG and other national or European courts.

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 United States dominates global investment banking: does it matter for Europe? Bruegel Policy Contribution 2016/06, March 2016

In the aftermath of the global financial crisis, the market share of US investment banks is increasing, while that of their European counterparts is declining. We present evidence that US investment banks are on the verge of taking over pole position in European investment banking. Meanwhile, since 2015, Chinese investment banks have overtaken American and European investment banks in the Asia-Pacific market. Credit rating agencies and investment banks are the gatekeepers of the capital markets. The European supervisory institutions can effectively supervise the European operations of these US-managed players. On the political side, we suggest that the European Commission should continue to view its, albeit declining, banking industry as a strategic sector. The Commission, the European Central Bank and the Bank of England should jointly develop a strategic agenda for the EU-US Regulatory Dialogue. Finally, corporates rely on investment banks to issue new securities. We recommend that the big European corporates should cherish the (few) remaining European investment banks, by giving them at least one place in otherwise US- dominated banking syndicates. That could help to avoid complete dependence on US investment banks.

Tectonic evolution of the Proterozoic Itremo Group metasediments in central Madagascar

The major geologic units of the Itremo region in central Madagascar include: (1) upper amphibolite to granulite facies (higher grade) Precambrian rocks, mainly para- and orthogneisses, and migmatites; (2) the newly defined Itremo Nappes, a fold-and-thrust belt containing the Proterozoic Itremo Group sediments, metamorphosed at greenschist to lower amphibolite facies (lower grade) conditions: (3) Middle Neoproterozoic and Late Neoproterozoic-Cambrian intrusives. The stratigraphic succession of the Itremo Group in the eastern part of the Itremo region is, from bottom to top: quartzites, metapelites, metacarbonates and metapelites overlain by metacarbonates. During D1 the Itremo Group sediments were detached from their continental substratum, deformed into a fold-and-thrust nappe (Itremo Nappes), and transported on top of higher grade rocks that are intruded by Middle Neoproterozoic (c. 797–780 Ma) granites and gabbros. A second phase of deformation shortening (D2) affected both the Itremo Sedimentary Nappes and structurally underlying higher-grade rocksunits, and formed large-scale N-S-trending F2 folds. S1 axial plane foliations in Itremo Group sediments are truncated by Late Neoproterozoic-Cambrian granites (c. 570–540 Ma). The age of the formation of the Itremo Nappes is not well constrained: they formed in Neoproterozoic times between 780 and 570 Ma.

Age constraints on the tectonic evolution of the Itremo region in Central Madagascar

The Itremo region in Central Madagascar comprises a deformed metasedimentary sequence (Itremo Group) that has undergone greenschist to lower amphibolite facies metamorphism. During a first phase of deformation (D1) Itremo Group sediments were deformed into a fold-and-thrust belt and transported toward the E to NE on top of migmatitic gneisses rocks of Anatananarivo block. A second phase of deformation (D2) affected both the fold-and-thrust belt and structurally underlying units, and formed large-scale N-S trending folds with steeply dipping axial planes. A Late Neoproterozoic Th–U–Pb XRF monazite age (565±17 Ma) dates the emplacement of a granite that truncates first-phase structures in the Itremo Group, and indicates that the fold-and-thrust belt formed prior to ≈565 Ma. Th–U–Pb electron microprobe dating was applied to elongated monazites that lie within the first-phase foliation of Itremo Group metapelites. The detrital cores of zoned monazites reveal two distinct age populations at ∼2000 and 1700 Ma, the latter age giving a maximum depositional age for the Itremo Group. Statistical analysis of ages determined from the rims of zoned monazites and from unzoned monazites indicates three Late Proterozoic–Early Paleozoic monazite growth events at about 565–540, 500 and 430 Ma. The oldest age population is contemporaneous within error, with the intrusion of the dated granite. The two younger age populations are found both in the Th–U–Pb and Ar–Ar data; together with the perturbation of the Rb–Sr system we interpret both ages as due to alteration related to fluid circulation events, possibly connected to the emplacement of pegmatite fields in Central Madagascar. Syn-D1 tectonic growth of contact metamorphism minerals such as andalusite has been observed locally in metapelites along the margin of Middle Neoproterozoic (≈800 Ma) granites, suggesting that D1 in the Itremo Group is contemporaneous with the intrusion of granites at ≈800 Ma. The N-S trending D2 folds are associated with ≈E-W shortening during the final assembly of Gondwana in Late Neoproterozoic–Early Cambrian times.