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571. The General Affairs Council: The Key to Political Influence of Rotating Presidencies

Author:
Piotr Maciej Kaczyński and Andrew Byrne
Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
In spite of the formal role laid out for the General Affairs Council (GAC) in the Treaties, it has been weakened since it was extracted from the General Affairs and External Relations Council (GAERC) and set up to function on its own. Its current uneven composition is leading to further marginalisation. Reforming the GAC can bring it to the centre of gravity of the Council proceedings and address a number of problems in the current institutional structure. For that to happen, however, countries holding the rotating Council presidency need to consider placing their head of state or government in the chair of the GAC meetings. Upgrading GAC in this way would streamline the diverse work of the Council, it would help in alleviatin g the heavy political burden that now falls on the understaffed President of the European Council and it would allow the institution of the rotating presidency to regain a higher political profile by creating out of national leaders a de facto Vice President of the European Council.
Topic:
Regional Cooperation, Treaties and Agreements, and Governance
Political Geography:
Europe

572. Coordinating Regional and Multilateral Financial Institutions

Author:
C. Randall Henning
Publication Date:
03-2011
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Recent crises and the expansion of international financial arrangements have dramatically elevated the importance of cooperation between regional institutions and the International Monetary Fund (IMF). While the case for coordination between regional and multilateral institutions is generally accepted, however, the need to organize it on an ex ante basis is not fully appreciated. The relatively successful cooperation among the European Commission, European Central Bank, and IMF on the European debt crisis is not likely to be easily replicated in joint programs for countries in other regions, moreover, and the costs of coordination failure could be very large. Recent innovations at the IMF, on the other hand, present opportunities for cooperation with regional facilities. Henning reviews (1) the case for organizing cooperation on an ex ante basis, (2) the policy and institutional matters that should be coordinated, (3) how East Asian arrangements in particular and the IMF might cooperate, and (4) an Interinstitutional Agenda of general principles, modalities, and institutional recommendations. The G-20, member states, and institutions themselves should address this agenda proactively.
Topic:
Debt, Economics, Regional Cooperation, International Monetary Fund, and Financial Crisis
Political Geography:
Europe and East Asia

573. Europe on the Brink

Author:
Simon Johnson and Peter Boone
Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Attempts to resolve the problems in Europe are failing, and the crisis is spreading from Greece, Ireland, and Portugal to larger nations. Europe's financial system relies on moral hazard, i.e., a “no defaults” policy, to attract the funding needed to roll over large amounts of short–term bank and sovereign debt. Now that politicians in creditor nations are calling for private sector burden sharing, investors are demanding higher interest rates to hold these debts. But higher rates may tip banks and nations toward bankruptcy. Europe's banks and financial system are highly integrated across countries. Rising expectations of default in some countries could lead to large-scale capital flight into “safe” countries. This shift will raise concerns regarding solvency and liquidity of many financial institutions. The payments system of the euro area is serving as an opaque bailout mechanism that is currently preventing the euro area from falling apart at this time. If the number of nations in trouble spreads beyond Greece, Ireland, and Portugal, this bailout system will be stressed because of the potential size of accumulated funding. The European Central Bank (ECB) could soon see a vocal debate between inflationist and hawkish (anti–inflation) members. Inflationists will call for large–scale interventions, including bond buybacks and emergency loans, while the hawks will attempt to close loopholes in the payments system that effectively permit each troubled nation to create money needed to finance capital flight and budget deficits. At this stage in the debate, we see little chance that Europe can avoid ending the “moral hazard” regime, in which case it needs to plan for widespread sovereign and bank debt restructurings.
Topic:
Debt, Economics, Regional Cooperation, and Financial Crisis
Political Geography:
Europe, Greece, and Ireland

574. Partial sovereign bond insurance by the eurozone: A more efficient alternative to blue (Euro-)bonds

Author:
Hans-Joachim Dübel
Publication Date:
08-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
'Blue' or Eurobonds guaranteed via joint and several liability by the eurozone member states have been proposed as an important tool to stabilise and structure the eurozone sovereign bond markets. But in this new Policy Brief, Hans-Joachim Dübel argues the case for a partial insurance of sovereign bonds by the European Stability Mechanism. Hans-Joachim Dübel is an independent financial sector consultant based in Berlin and founder of Finpolconsult.
Topic:
Economics, International Trade and Finance, Markets, Regional Cooperation, and Monetary Policy
Political Geography:
Europe and Berlin

575. The Eurozone Debt Crisis: From its origins to a way forward

Author:
Diego Valiante
Publication Date:
08-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The Eurozone debt crisis has now reached a turning point. This paper argues for a more organised intervention by the ECB to stop contagion through the creation of a quantitative easing programme, coupled with a political agreement among member states on a more federalist budget for the Eurozone.
Topic:
Debt, Economics, Regional Cooperation, and Financial Crisis
Political Geography:
Europe

576. Only a more active ECB can solve the euro crisis

Author:
Paul De Grauwe
Publication Date:
08-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The biggest threat for the eurozone is the contagion of the Greek sovereign debt crisis to the rest of the system. If the Greek crisis could be isolated, it would barely matter for the eurozone as a whole. After countless crisis meetings of the European Council, however, it has to be admitted that the European leaders have failed to isolate the Greek crisis and to stop the forces of contagion. The latest meeting of the heads of state or government of the euro area on July 21st is no exception.
Topic:
Debt, Markets, Regional Cooperation, and Financial Crisis
Political Geography:
Europe

577. Rehashed Commission Delegations or Real Embassies? EU Delegations Post-Lisbon

Author:
Michele Comelli and Raffaello Matarazzo
Publication Date:
07-2011
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The entry into force of the Lisbon Treaty and the creation of the European External Action Service (EEAS) have transformed the delegations of the EU abroad which are the face of the EU in third countries and in international organisations. Previously they dealt with trade and aid only, now they also deal with foreign and security policy, coordinating and representing the positions of the EU in third countries. This is an important innovation, but one which poses new challenges. In addition, EU delegations to international organizations are confronted with specific problems: the member states' reluctance to recognize the new competences conferred by the Treaty to the EU and the discrepancies between the new provisions of the EU's external representation and the internal procedures of international organizations themselves. In order to use all the space for manoeuvre provided for by the Treaty EU delegations must pursue a double objective: further adapting the EU's external representation to the procedures of the main international organizations; and promoting deeper coordination between the EU and the member states, particularly when shared competences are at stake.
Topic:
International Organization, Regional Cooperation, and Treaties and Agreements
Political Geography:
Europe and Lisbon

578. The Challenges for European Policy on Access to Space

Author:
Anna Veclani, Nicolò Sartori, and Rosa Rosanelli
Publication Date:
07-2011
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The EU is one of the major space actors in the world and, like other principal space faring nations, relies on an independent access to space system for implementing its space policy. Indeed, for more than thirty years, the European launcher Ariane has guaranteed the success of numerous institutional and commercial missions, both for civil and military purposes. Given the importance of the EU's space policy for the effectiveness of the Union's internal and external action, an autonomous, reliable and cost-effective access to space is a fundamental and strategic necessity. This paper presents the main challenges faced by European institutions and industry in maintaining an independent access to space. As satellite technology quickly evolves and new space competitors rise, the EU needs to step up its launch capabilities and to effectively confront international competition. To these ends, the main European space actors must renew their approach to the policy on access to space, in particular by addressing the problems affecting the launch company Arianespace, for which the paper provides policy options.
Topic:
Regional Cooperation, Science and Technology, and Communications
Political Geography:
Europe

579. Decoupling Trade from Politics: The EU and Region-Building in the Andes

Author:
Miguel Haubrich Seco
Publication Date:
07-2011
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
In its external relations, the EU advances regional cooperation as a successful means of achieving peace and prosperity. In doing so, the EU promotes its own model as the most successful case of regional integration. A wide-reaching set of instruments, spanning from trade to political dialogue and aid, is used to promote regional cooperation and integration. Noneheless, regional organisations supported by the EU are far from accomplishing their set objectives. Using as a test case the Andean Community, the oldest Latin American regional organisation and a prominent case of EU support for regional integration, this paper examines the reasons behind the EU's lack of impact in promoting regional integration. Stemming from this analysis, the paper proposes a recalibration of EU policy by decoupling trade relations from political engagement and by increasing support for physical and visible integration as opposed to formal institutions detached from the perceived needs of the public.
Topic:
Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Europe and Latin America

580. Does the European External Action Service Represent a Model for the Challenges of Global Diplomacy?

Author:
Hanna Ojanen and Rosa Balfour
Publication Date:
06-2011
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The EEAS was established to give EU foreign policy new impetus, greater coherence and efficacy. It remains to be seen whether the current organizational concept will give rise to more strategic approaches to foreign policy issues and more holistic foreign policy tools. The most immediate potential of the EEAS lies in its role in merging the broad toolbox of EU external action. The EEAS also has potential to improve vertical coordination and outreach. In the long-term, incremental changes could contribute to forming a new mindset, both when it comes to the relationship between the EU and its citizens, and to reviewing traditional models of diplomacy. The EEAS still needs recognition as a real diplomatic service both from within the Union and by other actors. Its performance, with tangible deliverables, will be key to its legitimacy and future prospects, as will be communicating the strategies and the outcomes to the wider European public.
Topic:
Foreign Policy, Diplomacy, and Regional Cooperation
Political Geography:
Europe