ECB Policy and Eurozone Fragility: Was De Grauwe Right? CEPS Working Document No. 397, June 2014

Paul De Grauwe’s fragility hypothesis states that member countries of a monetary union such as the eurozone are highly vulnerable to a self-fulfilling mechanism by which the efforts of investors to avoid losses from default can end up triggering the very default they fear. The authors test this hypothesis by applying an eclectic methodology to a time window around Mario Draghi’s “whatever it takes” (to keep the eurozone on firm footing) pledge on 26 July 2012. This pledge was soon followed by the announcement of the Outright Monetary Transactions (OMT) programme (the prospective and conditional purchase by the European Central Bank of sovereign bonds of eurozone countries having difficulty issuing debt). The principal components of eurozone credit default swap spreads validate this choice of time frame. An event study reveals significant pre announcement contagion emanating from Spain to Italy, Belgium, France and Austria. Furthermore, time-series regression confirms frequent clusters of large shocks affecting the credit default swap spreads of the four eurozone countries but solely during the pre-announcement period. The findings of this report support the fragility hypothesis for the eurozone and endorse the Outright Monetary Transactions programme.

The 2030 framework on climate and energy - Getting Europe on the right track? EPC Commentary, 30 January 2014

Climate vs competitiveness? The European Commission published its proposal on the 2030 climate and energy framework on 22 January. Reflective of the current economic climate, it was accompanied by a report on energy prices and the Commission decided not to propose regulation on shale gas but to issue recommendations on environmental standards. The same day also saw the publication of a communication “For a European Industrial Renaissance”. Climate considerations no longer drive the agenda. The enthusiasm of 2007, when the “20/20/20” climate and energy targets were set for 2020, has diminished. The new reality has brought competitiveness to the top of the EU’s priority agenda.

Svodboda party - the new phenomenon on the Ukrainian right-wing scene. OSW Commentary No. 56, 2011-07-04

Even though the national-level political scene in Ukraine is dominated by the Party of Regions, the west of the country has seen a progressing increase in the activity of the Svoboda (Freedom) party, a group that combines participation in the democratically elected local government of Eastern Galicia with street actions, characteristic of anti-system groups. This party has brought a new quality to the Ukrainian nationalist movement, as it refers to the rhetoric of European anti-liberal and neo-nationalist movements, and its emergence is a clear response to public demand for a group of this sort. The increase in its popularity plays into the hands of the Party of Regions, which is seeking to weaken the more moderate opposition parties (mainly the Yulia Tymoshenko Bloc). However, Svoboda retains its independence from the ruling camp. This party, in all likelihood, will become a permanent and important player in Ukrainian political life, although its influence may be restricted to Eastern Galicia. Svoboda is determined to fight the tendencies in Ukrainian politics and the social sphere which it considers pro-Russian. Its attitude towards Russia and Russians, furthermore, is unambiguously hostile. In the case of Poland, it reduces mutual relations almost exclusively to the historical aspects, strongly criticising the commemoration of the victims of the Ukrainian Insurgent Army’s (UPA) crimes. This may cause tension in Polish-Ukrainian relations, where they are affected by decisions made by local governments controlled by the Svoboda Party.