CEPS Policy Briefs


1 - 30 of 287
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.

17 April 2013

There is general agreement that banking supervision and resolution have to be organised at the same level. It is often argued, however, that there is no need to tackle deposit insurance because it is too politically sensitive.

27 March 2013

In many eurozone countries, domestic banks often hold more than 20% of domestic public debt, which is an unsatisfactory situation given that banks are highly leveraged and that sovereign debt is inherently subject to default risk within the euro area. This paper by Daniel Gros finds, however, that the relative concentration of public debt on bank balance sheets is not just a result of the euro crisis, for there are strong additional incentives for banks in some countries to increase their sovereign.

21 March 2013

This CEPS Policy Brief reviews key aspects of the new financial paradigm in a transatlantic perspective, focusing on the general approach in EU and US legislation in response to the financial crisis and the G-20 commitments and specifically as regards the extraterritorial implications. Following discussion of the institutional setting, conclusions are offered on what these changes mean in the context of the recently proposed Transatlantic Trade and Investment Partnership.

12 December 2012

Following the June 2012 European Council decision to place the ‘Single Supervisory Mechanism’ (SSM) within the European Central Bank, the general presumption in the policy discussions has been that there should be ‘Chinese walls’ between the supervisory and monetary policy arms of the ECB. The current legislative proposal, in fact, is explicit on this account. On the contrary, however, this paper finds that there is no need to impose a strict separation between these two functions.

31 October 2012

This new CEPS Policy Brief boldly asserts that the antitrust case launched by DG Competition against  Gazprom on September 4th will turn out to be the landmark antitrust case of this decade, in much the same way that Microsoft v. Commission was the defining antitrust lawsuit of the last decade. The paper argues that, for a host of political and economic reasons, this case is likely to be hard fought by both sides to a final prohibition decision and then onwards into the EU courts.

24 September 2012

In most EU member states, the business services industry has booked no productivity growth during the last two decades. The industry’s performance in the other member states was weaker than that of its US counterparts. Exploring what may be causing this productivity stagnation, this policy brief reports that weak competition has contributed to the continuing malaise in European business services. The study analyzed the persistence (over time) of firm-level inefficiencies. The evidence further suggests that competition between small firms and large firms in business services is weak.

18 September 2012

The European Commission has published its proposals for the transfer of supervisory responsibilities to the European Central Bank, under Article 127(6) of the TFEU, providing a comprehensive and courageous ‘first step’ towards a European banking union, the other steps being European deposit insurance and resolution procedures.

13 September 2012

While the EU has recently upgraded its external democracy promotion policies through a number of different initiatives, there is one challenge that it has not yet addressed: what exactly does it aim to support?

This policy brief illustrates that both the conceptualisation of democracy and the means to achieve it remain vague, and explains why this is problematic. It points out the risks that stem from a lack of clear understanding about how human rights, governance, civil society and socio-economic development relate to democratisation.

11 September 2012

Cross-border firms supply goods and services throughout Europe and cross-border banks facilitate the cross-border traffic by persons and firms. European banks are thus an integral part of the internal market. Yet cross-border banking is not stable in the current institutional setting as national authorities focus on preserving the national parts of a cross-border bank and the integrated value of a bank is neglected. European banks therefore need a European safety net, which is a precondition for putting the supervisory framework on a European footing.

28 August 2012

As an alternative to the present system of intermediation of the German savings surplus, this paper suggests that the risk-adjusted rate of return could be improved by creating a sovereign wealth fund for Germany (designated DESWF), which could invest excess German savings globally. Such a DESWF would offer German savers a secure vehicle paying a guaranteed positive minimum real interest rate, with a top-up when real investment returns allowed. The vehicle would invest the funds in a portfolio that is highly diversified by geography and asset classes.

27 July 2012

The sentiment that the euro is now in real danger is based in large part on the widespread conviction that interest rates of 6-7% are simply unsustainable for both Italy and Spain., After taking a closer look at the fundamentals, however, Daniel Gros concludes in this new Policy Brief that both countries should be able to live with this level of interest rates for quite some time, but only if they mobilize domestic savings, which remain strong in both countries. For Spain, some debt/equity swaps are also needed.

Daniel Gros is Director of CEPS.

16 July 2012

This paper reviews the causes of the ongoing crisis in the eurozone and the policies needed to restore stability in financial markets and reassure a bewildered public. Its main message is that the EU will not overcome the crisis until it has a comprehensive and convincing set of policies in place; able to address simultaneously budgetary discipline and the sovereign debt crisis, the banking crisis, adequate liquidity provision by the ECB and dismal growth.

11 July 2012

Effective enforcement and compliance with EU law is not just a legal necessity, it is also of economic interest since the potential of the Single Market will be fully exploited. Enforcement barriers generate unjustified costs and hindrances or uncertainty for cross-border business and might deprive consumers from receiving the full benefit of greater choice and/or cheaper offers.

11 July 2012

Different economic and financial structures require different crisis responses. Different crises also require different tools and resources. The first ‘stage’ of the financial crisis (2007-09) was similar on both sides of the Atlantic, and the response was also quite similar. The second stage of the crisis is unique to the euro area. Increasing financial disintegration within the region has forced the ECB to become the central counterparty for the entire cross-border banking market and to intervene in the sovereign bond market of some stressed countries.

26 June 2012

This Policy Brief provides a preliminary diagnosis of the proposed regulatory reforms contained in the Capital Requirements Directive and Regulation (CRD IV-CRR), which translate into EU law the Basel III standards adopted by the Basel Committee for Banking Supervision, and suggests avenues for improvement. The main criticism is that the proposal is not ambitious enough.

20 June 2012

In the run-up to the emergency European Council meeting at the end of June, Stefano Micossi outlines in this Policy Brief the main elements of a realistic and yet incisive policy package, capable of reassuring financial markets and a bewildered public opinion. It is more than Germany has been willing to accept so far but much less than many of the demands it will confront at the Council meeting. More importantly, it only requires a minimum of additional disbursements by the member states, while strengthening risk-sharing for sovereign and banking risks.

15 June 2012

In their assessment of the proposed European Endowment for Democracy (EED), Hrant Kostanyan and Magdalena Nasieniak conclude that an instrument along the lines currently envisaged could and should take on the challenge to make the EU a truly committed, pro-active and effective leader of democracy assistance. A flexible and fast-track path of assessing needs and granting funds could become the most visible results of the EU’s assistance in this area, delivering almost immediate tangible results.

23 May 2012

The eurozone countries are currently sitting on an aggregate exposure to Greece exceeding €300 billion. If the country were to exit the eurozone, it would certainly not be able to service its debt in the short run when the exchange rate overshoots.

22 May 2012

As unemployment climbs to new heights, Europe’s policy-makers are desperately casting about for the few instruments with which the EU can claim to foster growth. After a thorough examination of the facts on the ground, however, this paper finds that the North and the South of the euro area are diverging so much that they need very different policy prescriptions. Moreover, it points out that the two instruments that the EU has at its disposal to address structural problems in the South (the EIB and the Structural Funds) are unlikely to be effective this time.

14 May 2012

This CEPS Policy Brief looks at the ways in which the euro crisis has impacted the successful functioning of the internal market of the EU and the state of play with respect to the creation of a common consolidated corporate tax base in corporate taxation.

H. Onno Ruding, is Chairman of the CEPS Board of Directors, former Minister of Finance of The Netherlands and Member of the Board of IBFD (International Bureau of Fiscal Documentation) in Amsterdam.

08 May 2012

The Constitutional Affairs Committee is currently reviewing the European Parliament’s Rules of Procedure to increase the effectiveness, transparency and inclusiveness of first-reading agreements under co-decision. This policy brief takes a stand as to which rules should be adopted to achieve these objectives. Given the steep rise of early agreements and Parliament’s role as a guarantor of EU legitimacy, the authors place a premium on inclusiveness and transparency.

07 May 2012

The analysis in this Commentary provides strong evidence showing that the burden of the adjustments to the imbalances in the eurozone between the surplus and the deficit countries is borne almost exclusively by the deficit countries in the periphery.

25 April 2012

Lax financial conditions can foster credit booms. The global credit boom of the last decade led to large capital flows across the world, including large movements of resources from the Northern countries of the euro area towards the Southern part. Since the start of the crisis and more markedly after 2009, these flows have suddenly stopped, creating severe adjustment pressures. This paper argues that, at this point, the common monetary policy can only try to mitigate the unavoidable adjustment by maintaining overall financial stability.

19 April 2012

Spain faces high unemployment and slow growth. This paper focuses on an important source of those problems, namely its housing market. While some adjustment has occurred since Spain's housing bubble burst in 2008, the authors find that house prices and construction need to decrease more to slow Spain's unsustainable accumulation of foreign debt.

Cinzia Alcidi is LUISS Research Fellow at CEPS, and Daniel Gros is Director of CEPS.

28 March 2012

Europe’s policy-makers are engaged in protracted discussion on whether and how to increase the size of the euro rescue funds (the EFSF and the ESM).  In this Policy Brief, Daniel Gros and Thomas Mayer argue that this attention on the headline size of the EMS and EFSF is misplaced.  They propose that a simpler solution would be to register the ESM as a bank, with access to the ECB under the same conditions as apply to any normal bank.

15 March 2012

This Policy Brief argues that pursuing the renewables objective could contribute to the completion of the internal electricity market, help overcome opposition to transmission projects and decrease the market power of incumbents. Conversely, an integrated internal electricity market means less price volatility in specific regional markets, which allows for more efficient deployment and grid integration of renewables. Three sets of recommendations are proposed.

Jonas Teusch is Research Assistant at the Centre for European Policy Studies.

01 March 2012

The eurozone is in recession and will show negative growth in 2012, notes Stefano Micossi in this new CEPS Policy Brief. Hopes that fiscal consolidation could spur growth by improving household and business confidence are not materialising, because in reality, domestic demand has been hit too hard by fiscal consolidation, and investment throughout the Union remains well below pre-crisis levels.

25 January 2012

From 2006 to 2011, the Asia-Pacific Partnership on Clean Development and Climate (APP) provided a non-legally binding framework based on a public-private partnership to support projects towards clean development and climate objectives in seven countries in the region. The seven partner countries concluded that the APP activities were successful and could lead to other successes in similar initiatives with similar working formats.

21 December 2011

In this latest Policy Brief on raw materials, CEPS Associate Research Fellow Roderick Kefferputz takes stock of some of the current developments in commodity markets. Almost a year after the publication of the European Commission’s Communication on Raw Materials, he finds that new circumstances have advanced a misplaced optimism and the pursuit of national interests by EU member states, which impede common European efforts to secure natural resources.