International financial regulation: A role for the Eurozone? EU Diplomacy Paper 08/2012, October 2012

The deepest financial crisis to strike the global economy since the Great Depression has unceremoniously called into question the very foundations of the Western economic model. The liberalisation of capital flows and the growing internationalisation of financial markets outpaced global regulatory and supervisory efforts. The repercussions of the financial crisis have given new dynamism to the reform of financial regulation both globally and within the European Union (EU). The Eurozone, by way of its own failings, has emerged as a stronger conceptual and legitimate entity since the onset of the crisis, but to what extent does this equate to a greater external role, in particular in the reform of international financial regulation? This paper argues that the Eurozone is currently not in a position to play an important role in the reform of international financial regulation, as it is a weak actor in the context of the EU financial architecture, which is still largely characterised by differing national regimes, a prevailing influence from the UK and fragmented external representation. The key finding from this study is that internal tensions in the EU are at the very heart of the Eurozone’s difficulties in playing a role in the reform of international financial regulation. Surmounting these tensions is a pre-requisite for the Eurozone if it is to overcome its structural weakness in international financial politics. However, the implications of such evolutions to the Eurozone, as an entity, and to European integration are far-reaching.

L’usage des mesures restrictives autonomes de l’Union européenne: deux poids deux mesures ou des mesures de poids? = The use of autonomous restrictive measures in the European Union: double standards or weight measures? EU Diplomacy Paper 09/2012, October 2012

No abstract.

The European Court of Justice and process-oriented review. Research Paper in Law, 01/2012

Structuralism is a theory of U.S. constitutional adjudication according to which courts should seek to improve the decision-making process of the political branches of government so as to render it more democratic.1 In words of John Hart Ely, courts should exercise their judicial-review powers as a ‘representation-reinforcing’ mechanism.2 Structuralism advocates that courts must eliminate the elements of the political decision-making process that are at odds with the structure set out by the authors of the U.S. Constitution. The advantage of this approach, U.S. scholars posit, lies in the fact that it does not require courts to second-guess the policy decisions adopted by the political branches of government. Instead, they limit themselves to enforcing the constitutional structure within which those decisions must be adopted. Of course, this theory of constitutional adjudication, like all theories, has its shortcomings. For example, detractors of structuralism argue that it is difficult, if not impossible, to draw the dividing line between ‘substantive’ and ‘structural’ matters.3 In particular, they claim that, when identifying the ‘structure’ set out by the authors of the U.S. Constitution, courts necessarily base their determinations not on purely structural principles, but on a set of substantive values, evaluating concepts such as democracy, liberty and equality. 4 Without claiming that structuralism should be embraced by the ECJ as the leading theory of judicial review, the purpose of my contribution is to explore how recent case-law reveals that the ECJ has also striven to develop guiding principles which aim to improve the way in which the political institutions of the EU adopt their decisions. In those cases, the ECJ decided not to second-guess the appropriateness of the policy choices made by the EU legislator. Instead, it preferred to examine whether, in reaching an outcome, the EU political institutions had followed the procedural steps mandated by the authors of the Treaties. Stated simply, I argue that judicial deference in relation to ‘substantive outcomes’ has been counterbalanced by a strict ‘process review’. To that effect, I would like to discuss three recent rulings of the ECJ, delivered after the entry into force of the Treaty of Lisbon, where an EU policy measure was challenged indirectly, i.e. via the preliminary reference procedure, namely Vodafone, Volker und Markus Schecke and Test-Achats.5 Whilst in the former case the ECJ ruled that the questions raised by the referring court disclosed no factor of such a kind as to affect the validity of the challenged act, in the latter cases the challenged provisions of an EU act were declared invalid.

Member State BITS after the Treaty of Lisbon: solid foundation or first victims of EU investment policy? Research Paper in Law, 02/2012

[Introduction.] This paper discusses the uncertain future of Member State BITs with third countries in the light of the developing EU investment policy. The question will be examined on the basis of the proposed Regulation establishing transitional arrangements for bilateral investment agreements between Member States and third countries presented by the Commission on 7 July 20101 and the European Parliament’s Position adopted at first reading on 10 May 2011.2 The proposed Regulation and the Commission Communication of the same day are meant to be the “first steps in the development of an EU international investment policy”.3 The first chapters present the legal framework relevant for this question and its evolution to better understand the particular challenges of this transition process. The second chapter examines the relationship of EU law and investment law, with a brief introduction of the notion of investment law and the scope of the EU’s new investment competence. The third chapter outlines the legal framework for the continuation and termination of treaties under international and EU law. The fourth chapter concerns BITs, first covering the particular nature of BITs and then the CJEU’s judgments in the BIT Cases of 2009. The fifth chapter consists of a step by step analysis of the different provisions of the proposed Regulation.

Poland and Greece - two contrasting EU enlargement experiences. ZEI Discussion Paper C213, 2012

The aim of this contribution is a comparative analysis of the challenges Poland and Greece (and more broadly – CEE-10 and GIPS countries) had to face in the past as latecomers to the European Union and are facing now, in the aftermath of the world financial and economic crisis of 2008-09. The main underlying message conveyed in this text is two-fold. Firstly, the author is going to argue that the breadth and complexity of the challenges Poland and other CEE-10 countries had to face while entering the road of systemic transformation was by far greater compared to past and in particular – current problems of Greece (and the remaining GIPS countries) in the aftermath of the global financial and economic crisis of 2008-09. Secondly, a resilience of Poland and other CEE-10 economies, relative to Greece and other GIPS, to the recent crisis was due to a comparatively higher level of institutional development of the former group at the time of their EU accession and at present. The ensuing discussion is organized as follows. Section 2 below provides comparative background information on the two reference groups. In Section 3 we discuss the most salient features of the design of the command economy and its legacy, as a key determinant of the initial conditions of systemic transformation. Next, in Section 4 we overview the basic indicators of growth performance and institutional reforms in CEE-10 countries between 1990 and 2011. Section 5 offers a picture of economic growth and real economic convergence in Greece and the remaining GIPS countries. In Section 6 we embark on comparative analysis of the institutional quality of Greece and Poland against a broader background of GIPS, CEE-10 and the remaining EU member countries. Section 7 concludes with a summary of major findings.

Economic Partnership Agreements in the EU's post-Lome trade regime: negotiations with West Africa. ZEI Discussion Paper C214, 2012

Trade is a key element of the development policy of the European Union (EU). As the most important trading partner of developing countries, the EU attempts to facilitate the participation of developing countries in global trade and contribute to economic growth through providing market access and financial assistance. For twenty-five years, the commitment of the EU was largely focused on its former colonies, more specifically in Africa, the Caribbean and the Pacific (ACP). The developing world, in terms of the EU’s trade policy, was therefore divided between ACP states with special provisions under the Lomé Conventions and all other developing countries. With the new millennium, this special relationship came to an end. Pressure from several member states1 and the World Trade Organization (WTO) led to an overhaul of the EU’s trade regime vis-à-vis developing countries and to the loss of the privileged position of ACP countries. The result of this overhaul is still pending. Economic Partnership Agreements (EPAs) – to be negotiated between the EU and several ACP regions – have only been realized in the Caribbean. This article will to examine the negotiations between the EU and West Africa and discuss the interests involved on the African side. Following the introduction, the second part of this article is dedicated to the Lomé Conventions with a focus on the change occurring from the third to the fourth revision in order to understand the current situation. The third part is going to take a look at the Cotonou agreement and the trade regime of the EU in general before turning to the negotiations for an Economic Partnership Agreement between the EU and West Africa. The conclusion summarizes the main findings.

Current challenges in EU politics. A perspective from North Rhine-Westphalia. ZEI Discussion Paper C216, 2013

I would like to briefly recapitulate where Europe stands today, and what has been achieved. Because I maintain that in the EU’s 27 Member States we have, despite the failings and shortcomings we all bemoan, reached a level of unity, prosperity and rule of law unheard of in the history of this continent, and possibly of the world. As far as territory is concerned: the European Economic Community started out with six members. The late Bronislaw Geremek, former Foreign Minister of Poland and an eminent historian, used to point out that this, at the time, corresponded in size and shape roughly to the empire of Charlemagne, one of the greatest unified territories the continent has ever known. And yet, a mere 55 years after the Treaty of Rome we have gone far beyond that. Today’s European Union encompasses 27 countries, more than 4 million square kilometers in territory and 500 million people. When it comes to Europe’s policies, at present, all eyes are on the Euro and the future of our common monetary and financial policy. But within our common space, we have achieved so much more than a common currency for a majority of Member States.

Die Gestaltung der Globalität. Schlüsselwörter der sozialen Ordnung (II) = The design of the global order: the keywords of social order. ZEI Discussion Paper C215, 2013

No abstract.

The European Union's promotion of regional economic integration in Southeast Asia: Norms, markets or both? Bruges Political Research Paper No. 25/May 2012

The EU‘s external action includes a preference for regional interlocutors and a tendency to promote regionalism. This work concentrates on the southeast Asian area and it aims at investigating the nature of EU‘s promotion of ASEAN regional integration. The EU‘s ideas and practices of regionalism as well as the single market experience influence the EU‘s international action. The power deriving from the EU‘s institutionalized market is used by the Union in a normative way to diffuse the EU‘s ideas and principles, advance the EU‘s interests and spread its model of economic integration through political dialogue, development cooperation and preferential trade arrangements. This action seems to result in a certain diffusion of the EU‘s ideas and practices in southeast Asia as well as in a subsequent reappropriation and redefinition of external inputs by ASEAN.

Participatory approaches in the management of Natura 2000: when EU biodiversity policy gets closer to its citizens. Bruges Political Research Paper No. 26/May 2012

The Habitats Directive has created a European network of protected areas combining environmental protection with social and economic activities. Although not clearly advocated in the Directive, participatory approaches have incrementally emerged in order to ensure an adequate management of the Natura 2000 network. This paper looks at the reasons why the European Commission on one side and the national/local authorities on the other side chose to engage in participatory approaches and assesses the structure, degree and scope of these approaches in the light of input and output legitimacy. Main findings are that participation was mostly implemented as a reaction to conflicts and out of a concern over policy implementation, two elements that continue to drive the philosophy of the Natura 2000 network‘s management. The limits of participation in Brussels are contrasted with the potential for more genuine and effective participation mechanisms on the field.

Introducing more equity in the CAP: a difficult challenge. Egmont Paper #55, June 2012

[From the Introduction]. The main question addressed by this paper is how to reach a more equitable distribution of CAP’s payments pragmatically, politically and economically? Pragmatically, the CAP is a multi-functional policy, which has to combine different goals, i.e. to be more equitable, green and market-oriented. However, these objectives are not always compatible and require trade-offs. Politically, regarding the CAP’s significant share (40%) of the EU budget and the current public debt crisis, Member States are most likely to keep their attention on the juste retour calculations rather than the promotion of the European public interest in the EU negotiations. Economically, reaching a more equitable distribution of payments should be achieved without significant disruptive changes that could have serious consequences on the costs and benefits of the agricultural sector in the EU. Considering these elements, it is already clear that reaching a more equitable distribution of CAP’s payments represents a difficult challenge.

Preventing the rise of sovereign borrowing costs in the Eurozone: what can the ESM and the ECB achieve? Egmont Paper No. 56, November 2012

This paper focuses on the possible instruments for ‘ex-ante’/’preventive’/’precautionary’ interventions which can be deployed by the ESM and the ECB in order to prevent a debt crisis in a eurozone country. The potential of Eurobonds will also be discussed in this crisis management perspective. The first part of this paper traces the underlying trends of the evolution of interest rates in eurozone countries over the last decades. The second part discusses the principles of a preventive intervention in sovereign bond markets for the purpose of lowering borrowing costs of countries facing refinancing constraints; the limits and main issues of an ex-ante intervention will be underlined. In the third part, the properties of the ESM’s precautionary financial assistance and secondary market support facility will be discussed in details. The ECB preemptive intervention policies and, in particular, the OMT will be analyzed in the fourth part of the paper. The most likely course of action – a combined intervention by the ESM and the ECB – will be discussed in the fifth part. Finally, I will point out the core challenges of introducing Eurobonds as additional instruments to mitigate the rise of borrowing costs in the short term.

The "European model" of international law and its significance for Asia. Some critical reflections. EU Centre in Singapore Working Paper No. 7, June 2012

There is a certain arrogance in the affirmation that a “European model” of regional integration and of compliance with international law should be adopted anywhere in the world, and in Asia in particular. This article argues on the contrary that Asia and Europe are in fundamentally different situations vis-à-vis international law. Based on an analysis of recent events and latest legal developments in Europe, it puts the “European model” of regional integration and the European selective compliance with international law in perspective with regard to the Asian context. Without denying that “civilizations” should learn from one another and that the European experience may be relevant to some extent in Asia, this article concludes that the tools developed in Europe should be used differently in Asia.

Still the “pivot”: Russia’s self-conception and view of the euro crisis as perceived in public opinion and the Rossiiskaya Gazeta, 2011-12. EU Centre in Singapore Working Paper No. 8, August 2012

In his influential and disputed 1904 lecture, “The Geographical Pivot of History,” Halford Mackinder argued that the Russian heartland was the fulcrum of many historical and geostrategic currents across Eurasian space. While the thesis has been thought surpassed by recent technological advances in transportation, it serves as a useful heuristic device to open certain thematic lines of analysis apparent in the presentation of the ongoing “EUrocrisis” by the country’s newspaper of record, the Rossiiskaya Gazeta.