British Balance of Competence Reviews, Part III: More reform than renegotiation or repatriation. EPIN [Working] Paper No. 42/December 2014. [see Abstract for I and II]

This paper, the third in a series for a CEPS project on the ‘The British Question’, is pegged on an ambitious exercise by the British government to review all the competences of the European Union on the basis of evidence submitted by independent stakeholders. The reviews considered in this paper cover the following EU policies: the single market for services, financial markets, the free movement of people, cohesion, energy, agriculture, fisheries, competition, social and employment policies, and fundamental rights. The declared objective of Prime Minister Cameron is to secure a ‘new settlement’ between the UK and the EU. From political speeches in the UK one can identify three different types of possible demand: reform of EU policies, renegotiation of the UK’s specific terms of membership, and repatriation of competences from the EU back to the member states. As most of the reviews are now complete, three points are becoming increasingly clear: i) The reform agenda – past, present or future - concerns virtually every branch of EU policy, including several cases reviewed here that are central to stated UK economic interests. The argument that the EU is ‘unreformable’ is shown to be a myth. ii) The highly sensitive cases of immigration from the EU and social policies may translate into requests for renegotiation of specific conditions for the UK, but further large-scale opt-outs, as in the case of the euro and justice and home affairs, are implausible. iii) While demands for repatriation of EU competences are voiced in general terms in public debate in the UK, no specific proposals emerge from the evidence as regards competences at the level at which they are identified in the treaties, and there is no chance of achieving consensus for such ideas among member states. Michael Emerson and Steven Blockmans, “British Balance of Competence Reviews, Part I: ‘Competences about right, so far’”, CEPS/EPIN Working Paper No. 35, October 2013 (www.ceps.eu/book/british-balance-competence-reviews-part-i-%E2%80%98competences-about-right-so-far%E2%80%99)(http://aei.pitt.edu/45599/); Michael Emerson, Steven Blockmans, Steve Peers and Michael Wriglesworth, “British Balance of Competence Reviews, Part II: Again, a huge contradiction between the evidence and Eurosceptic populism”, CEPS/EPIN Working Paper No. 40, June 2014 (www.ceps.eu/book/british-balance-competence-reviews-part-ii-again-huge-contradiction-between-evidence-and-eurosc)(http://aei.pitt.edu/52452/).

The single market and competitiveness - the challenges for the Juncker team. CHALLENGE EUROPE Issue 22 - Challenges and new beginnings: Priorities for the EU's new leadership, September 2014

The announcement of the new European Commission is encouraging for single market supporters, especially in terms of how internal co-ordination and cross functional working will be organised. It is particularly significant that the responsibility for the single market in both goods and services is to be combined under one Commissioner portfolio. There is much to be gained from a combined focus, especially on enforcing the existing rules. A unified Consumer focus is also much welcomed. The European Parliament's Internal Market and Consumer Protection Committee (IMCO), which I had the privilege to Chair over the last five years, was extremely critical of the fragmented approach to consumer policy and legislation adopted by the outgoing Commission. A strong consumer focus underpins a dynamic and well-functioning market place and encourages more competition.

Factor Markets in Applied Equilibrium Models: The current state and planned extensions towards an improved presentation of factor markets in agriculture. Factor Markets Working Paper No. 23, February 2012

This paper describes how factor markets are presented in applied equilibrium models and how we plan to improve and to extend the presentation of factor markets in two specific models: MAGNET and ESIM. We do not argue that partial equilibrium models should become more ‘general’ in the sense of integrating all factor markets, but that the shift of agricultural income policies to decoupled payments linked to land in the EU necessitates the inclusion of land markets in policy-relevant modelling tools. To this end, this paper outlines options to integrate land markets in partial equilibrium models. A special feature of general equilibrium models is the inclusion of fully integrated factor markets in the system of equations to describe the functionality of a single country or a group of countries. Thus, this paper focuses on the implementation and improved representation of agricultural factor markets (land, labour and capital) in computable general equilibrium (CGE) models. This paper outlines the presentation of factor markets with an overview of currently applied CGE models and describes selected options to improve and extend the current factor market modelling in the MAGNET model, which also uses the results and empirical findings of our partners in this FP project.

Influence of the Common Agricultural Policy and Heterogeneous Land Quality on Land Rent and Land Allocation. Factor Markets Working Paper No. 38, March 2013

Against the background of the current discussion about the EU’s common agricultural policy (CAP) after 2013, the question of the impact of government support on land prices is crucially important. Validation of the CAP’s success also hinges on a proper assessment of a choice of policy instruments. This study therefore has the objective of investigating on a theoretical basis the effects of different government support measures on land rental prices and land allocation. The different measures under consideration are the price support, area payments and decoupled single farm payments (SFPs) of the CAP. Our approach evaluates the potential impact of each measure based on a Ricardian land rent model with heterogeneous land quality and multiple land uses. We start with a simple model of one output and two inputs, where a Cobb-Douglas production technology is assumed between the two factors of land and non-land inputs. In a second step, an outside option is introduced. This outside option, as opposed to land use of the Ricardian type, is independent of land quality. The results show that area payments and SFPs become fully capitalised into land rents, whereas in a price support scheme the capitalisation depends on per-acreage productivity. Moreover, in a price support scheme and a historical model, the capitalisation is positively influenced by land quality. Both area payments and price supports influence land allocation across different uses compared with no subsidies, where the shift tends to be larger in an area payment scheme than in a price support scheme. By contrast, SFPs do not influence land allocation.

Factor Markets in General Computable Equilibrium Models. Factor Markets Working Document No. 47, May 2013

One objective of Computable general equilibrium (CGE) models is the analysis of economy-wide effects of policy measures. The focus of the Factor Markets project is to analyse the functioning of factor markets for agriculture in the EU-27, including the Candidate Countries. While agricultural and food markets are fully integrated in a European single market, subject to an EU-wide common policy, the Common Agricultural Policy (CAP), this is not the case for the agricultural factor markets capital, labour and land. There are partly serious differences with regard to member state regulations and institutions affecting land, labour and capital markets. The presentation of this heterogeneity of factor markets amongst EU Member States have been implemented in the CGE models to improve model-based analyses of the CAP and other policy measures affecting agricultural production. This final report comprises the outcome of a systematic extension and improvement of the Modular Applied GeNeral Equilibrium Tool (MAGNET) model starting from an overview of the current state of the art to represent factor markets in CGE models to a description of work on labour, land and capital in MAGNET.

Influence of Agricultural Support on Sale Prices of French Farmland: A comparison of different subsidies, accounting for the role of environmental and land regulations. Factor Markets Working Document No. 51, June 2013

This paper investigates the determinants of agricultural land price in several regions in France over the period 1994-2011, using individual plot transaction data, with a particular emphasis on agricultural subsidies and nitrate zoning regulations. It found a positive but relatively small capitalisation effect of the total subsidies per hectare. The data revealed that agricultural subsidies capitalised, at least to some extent, but the magnitude of such a capitalisation depends on the region considered, on the type of subsidy considered, and on the location of the plot in a nitrate surplus zone or not. Only land set-aside premiums significantly capitalise into land price, while single farm payments have a significant positive capitalisation impact only for plots located in a nitrate-surplus zone.

Empirical Evidence of the Distributional Effects of the CAP in the New EU Member States. Factor Markets Working Document No. 58, August 2013

This study, carried out in the context of the Factor Markets research project, investigates the impact of the SAPS (Single Area Payment Scheme) on farmland rental rates in the new EU member states. Using a unique set of farm level panel data with 20,930 observations for 2004 and 2005 we are able to control for important sources of endogeneity. According to our results, the SAPS has a positive and statistically significant impact on land rents in the EU. However, the estimated incidence is smaller than predicted theoretically. Land rents capture only 19 cents of the marginal SAPS euro, and around 10% of the SAPS benefit non-farming landowners through higher farmland rental prices. As the share of rented land is higher in corporate farms than individual ones, family farms benefit more from the SAPS than corporate farms do.

EMU Convergence: Reason for Encouragement. ACES Working Paper (Report) No. 6, 2007

The purpose of this paper is to investigate whether convergence is actually occurring within Europe, which groups of countries are converging, and the macroeconomic indicators for which such convergence is apparent. Free trade and a single currency should lead to convergence in rates of inflation, but perhaps not in unemployment rates or in GDP growth. These latter aspects of economic performance are politically important, because the voters become decidedly displeased if unemployment is high and growth slow, as has been the case in France, Germany, and Italy during recent years.

The Danish Flexicurity Model - a Lesson for the US? ACES Working Paper No. 2, May 2007

Within recent years, increasing international competition has caused an increase in job transitions worldwide. Many countries find it difficult to manage these transitions in a way that ensures a match between labour and demand. One of the countries that seem to manage the transitions in a successful way is Denmark, where unemployment has been dropping dramatically over the last decade without a drop in job quality. This success is ascribed the so-called Danish flexicurity model, where an easy access to hiring and firing employees (flexibility) is combined with extensive active and passive labour market policies (security). The Danish results have gained interest not only among other European countries, where unemployment rates remain high, but also in the US, where job loss is often related to lower job quality. It has, however, been subject to much debate both in Europe and in the US, whether or not countries with distinctively different political-economic settings can learn from one another. Some have argued that cultural differences impose barriers to successful policy transfer, whereas others see it as a perfectly rational calculus to introduce 'best practices' from elsewhere. This paper presents a third strategy. Recent literature on policy transfer suggests that successful cross national policy transfer is possible, even across the Atlantic, but that one must be cautious in choosing the form, content and level of the learning process. By analysing and comparing the labour market policies and their settings in Denmark and the US in detail, this paper addresses the question, what and how the US can learn from the Danish model. Where the US and Denmark share a high degree of flexibility, they differ significantly on the level of security. This also means that the Danish budget for active and passive labour market policies is significantly higher than the American, and it seems unlikely that political support for the introduction of Danish levels of security in the US can be established. However, the paper concludes that there is a learning potential between the US and Demnark in the different local level efficiency of the money already spent. A major reason for the Danish success has been the introduction of tailor made initiatives to the single displaced worker and a stronger coordination between local level actors. Both of which are issues, where a lack of efficiency in the implementation of American active labour market policies has been reported.

Measuring firm innovativeness: towards a composite innovation index built on firm innovative posture, propensity and performance attributes. ACES Working Paper No. 12, 2008

The ability to innovate is generally accepted as a critical success factor to growth and future performance of firms. Yet, this acceptance obscures a comprehensive perspective on how firms can influence their innovation capacity and resulting performance. This paper proposes a '3P' construct of innovation measurement that simultaneously considers the Posture, Propensity and Performance related to a firm's innovation capabilities. We propose and provide empirical support showing that robust measurement of the performance implications of innovation requires the consideration of input, throughput and output factors simultaneously. Single or more limited indicators do not offer the degree of fine-tuning to a firm's innovation system that managers require. Thus, we propose the development, and future research into contingent variations, of a Composite Innovation Index (CII). We further demonstrate its use in comparing innovators and allowing managers to design a firm's innovation system.

The Italian Parliament and the EU: a slow and gradual Europeanization. ACES Working Papers, August 2009

In this paper we discussed how the literature traces a growing involvement of the national parliaments in EU policy-making. Three phases can be distinguished: limited or no involvement was the trend until the 1980s; after the Single Act (SEA, 1987), national parliaments started to be interested in European affairs and to set up specialized committees; following the Maastricht Treaty (TUE, 1992), the involvement of national parliaments in EU affairs became a response to the question of "democratic deficit" in the EU (Norton, 1995). The growing number of policies dealt with at the EU level, the consequently increased influence of EU law in national legislations, the new powers of the Union: all of these worked together to push national legislators to seek a scrutiny role in the drafting of EU legislation. According to Laprat (1995: 1), once the TUE was formally approved, a more parliamentary climate prevailed. In more recent years, national parliaments have distinguished themselves for their increased role in the scrutiny of EU legislation (Raunio and Hix, 200I: !52); more specialized MPs sit in the committees on EU affairs; the amount of work for EU specialists has increased. Also, parliamentary scrutiny, initially only optional and ex post, is now increasingly ex ante and/or mandatory (Maurer and Wessels, 2001: 425-475).

Energy Security in Transatlantic Relations. ACES Working Papers, 2011

A country’s economic and social development depends on reliable, sustainable access to energy — at a reasonable cost. Energy security has become a growing preoccupation for all countries, especially those that rely on imports. In addition, no country wants to rely on single sourcing for their oil or gas, meaning that the diversification of supplies is also important. Today, both the US and the EU are paying much closer attention to their energy security.

Answering the Call of the European Court of Justice in Eurofoods a Proposed Package of Due Process Rights with a View Toward the 2012 Revision of the European Insolvency Regulation. IES WORKING PAPER 3/2011

This paper anticipates the 2012 revision of the European Insolvency Regulation, which is the sole Union legislation on the subject of cross border insolvency proceedings. The paper first describes the historical background of the Regulation. The salient point of the historical discussion is that the Regulation is the product of forty years of negotiation and arises from a historical context that is no longer applicable to current economic realities, i.e. it provides for liquidation, not reorganization, it doesn’t deal with cross border groups of companies, and it lacks an effective mechanism for transparency and creditor participation. The paper then reviews the unique hybrid jurisdictional system of concurrent universal and territorial proceedings that the Regulation imposes. It looks at this scheme from a practical viewpoint, i.e. what issues arise with concurrent proceedings in two states, involving the same assets, the same creditors, and the same company. The paper then focuses on a significant issue raised by the European Court of Justice in the Eurofoods case, i.e. the need to comply with fundamental due process principles that, while not articulated in the Regulation, lie at the core of Union law. Specifically, the paper considers the ramifications of the Court’s holding that “a Member State may refuse to recognize insolvency proceedings opened in another Member State where the decision to open the proceedings was taken in flagrant breach of the fundamental right to be heard.” In response to the Court’s direction, this paper proposes a package of due process rights, consisting principally of an accessible, efficient and useful insolvency database, the infrastructure of which already exists, but the content and use of which has not yet been developed. As part of a cohesive three part due process package, the paper also proposes the formation of cross border creditors' committees and the establishment of a European Insolvency Administrator. Finally, on the institutional level, this paper proposes that the revision of the Regulation and the development of the insolvency database not only need to be coordinated, but need to be conceptualized, managed and undertaken, not as the separate efforts of diverse institutions, but as a single, unified endeavor.

Do Too Many Chefs Really Spoil the Broth? The European Commission, Bureaucratic Politics and European Integration, CES Germany & Europe Working Papers, No. 09.2, 5 August 1999

There is a puzzling, little-remarked contradiction in scholarly views of the European Commission. On the one hand, the Commission is seen as the maestro of European integration, gently but persistently guiding both governments and firms toward Brussels. On the other hand, the Commission is portrayed as a headless bunch of bickering fiefdoms who can hardly be bothered by anything but their own in­ ternecine turf wars. The reason these very different views of the same institution have so seldom come into conflict is quite apparent: EU studies has a set of relatively autonomous and poorly integrated sub­ fields that work at different levels of analysis. Those scholars holding the "heroic" view of the Com­ mission are generally focused on the contest between national and supranational levels that character­ ized the 1992 program and subsequent major steps toward European integration. By contrast, those scholars with the "bureaucratic politics" view are generally authors of case studies or legislative his­ tories of individual EU directives or decisions. However, the fact that these twO images of the Commis­ sion are often two ships passing in the night hardly implies that there is no dispute. Clearly both views cannot be right; but then, how can we explain the significant support each enjoys from the empirical record? The CommiSSion, perhaps the single most important supranational body in the world, certainly deserves better than the schizophrenic interpretation the EU studies community has given it. In this paper, I aim to make a contribution toward the unraveling of this paradox. In brief, the argument I make is as follows: the European Commission can be effective in pursuit of its broad integration goals in spite of, and even because of, its internal divisions. The folk wisdom that too many chefs spoil the broth may often be true, but it need not always be so. The paper is organized as follows. 1 begin with an elaboration of the theoretical position briefly out­ lined above. 1 then tum to a case study from the major Commission efforts to restructure the computer industry in the context of its 1992 program. The computer sector does not merely provide interesting, random illustrations of the hypothesis 1 have advanced. Rather, as Wayne Sandholtz and John Zysman have stressed, the Commission's efforts on informatics formed one of the most crucial parts of the en­ tire 1992 program, and so the Commission's success in "Europeanizing" these issues had significant ripple effects across the entire European political economy. I conclude with some thoughts on the fol­ lowing question: now that the Commission has succeeded in bringing the world to its doorstep, does its bureaucratic division still serve a useful purpose?

Transnational Globalization & Regional Governance. CES Germany & Europe Working Papers, No. 06.2, July 1996

Since the end of the 1980s, international relations has experienced a resurgence of regionalism in Europe (Single Market, Maastricht) and the Americas (NAFTA, MERCOSUR). Why did regional economic cooperation gain mo­ mentum? Theoretical approaches have proved the relevance of institutions, intergovernmental bargains, and na­ tional interest formation for the emergence of cooperation, but fall short in explaining why new cooperative moves happened in the late 1980s and early 1990s and not earlier. This paper argues that the simultaneous con­vergence of interests favoring regional organization of states was stimulated by transnational globalization. Since the early 1980s, states had to adapt to the pressures from transnational globalization, from actors and systems which are not shaped by national territories and interests, and which undermined traditional national economic policy and domestic coalitions. Under the new circumstances, joint regional governance on specific policy areas became an attractive option to respond to new constraints. With the conceptualization of transnational globalization as an explanatory factor for regional cooperation this paper does not dismiss other approaches, but rather attempts to complement the research agenda by shedding light on a crucial-but often neglected-aspect of international relations.