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57151. Is the ECB Sufficiently Accountable and Transparent?

Author:
Daniel Gros and Lorenzo Bini-Smaghi
Publication Date:
09-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
More than two years after its inception, the ECB is still perceived as lacking transparency by many academics and market participants. Our analysis, based on a series of indicators, suggests instead that the ECB is, at least on paper, one of the most transparent and accountable central banks. The discrepancy between theory and public perception suggests that much remains to be done within the given institutional framework to improve the transparency of the ECB. What is the best way to achieve this goal? Several suggestions have been put forward, such as publishing the detailed minutes of the ECB Governing Council meetings. This would result in shifting the true debate to informal meetings of the Governing Council, while formal meetings would only record pre-packaged consensus with no or little discussion. In our view, the best way to make the ECB more accountable is to engage it in substantive discussions about its policy. The ECB should provide more information about the background analysis that leads to policy decisions. For example, the ECB should transform its 'staff projections' into true inflation forecasts and it should be more open about the arguments that shape the internal debates, which precedes decisions. Accountability cannot be ensured by the ECB alone. An important role has to be played by its counterparts, such as the European Parliament, the Council of EU Finance Ministers and the public at large.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe

57152. The Macedonian Crisis and Balkan Security

Author:
Nicholas Whyte, Nadia Alexandrova Arbatova, and Dana H. Allin
Publication Date:
07-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
For most of the last ten years, Europeans have been embarrassed by Jacques Poos' rash promise of 1991; during the conflicts in Bosnia and Croatia from 1991 to 1995, the phrase seemed only to sum up the ineffective ness and the pomposity of the European Union's pretensions to be an actor of importance in its own backyard. The Dayton Agreement of 1995 was achieved only when Richard Holbrooke threatened to pull the US out of the process and 'leave it to the Europeans'. Terrified by this awful prospect (at least, according to Holbrooke's version), the warring parties agreed to the deal.
Topic:
Security, Defense Policy, NATO, and Terrorism
Political Geography:
Europe and Balkans

57153. NATO Enlargement

Author:
François Heisbourg, Tomas Ries, Vladimir B. Aranovsky, and F. Stephen Larrabee
Publication Date:
07-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Politically, further NATO enlargement in some form is probably unavoidable. On the deepest level, because NATO at its core is an expression of the Atlantic community of liberal democratic values. Refusing entry to new applicants who fulfil the criteria and knock strongly enough and long enough is not only politically embarrassing but undermines the foundation on which NATO rests.
Topic:
Security, Defense Policy, NATO, and Terrorism
Political Geography:
Europe

57154. Reshaping Europe's Borders: Challenges for EU Internal and External Policy

Author:
Joanna Apap
Publication Date:
07-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This colloquium brought together a distinguished list of political actors, policy makers, advisers, experts and researchers from all parts of Europe (see annex I for the list of papers presented and speakers). It was concerned with security in a broad sense, with special attention given to borders and to JHA (Justice and Home Affairs) issues.
Topic:
Security, Defense Policy, and Nationalism
Political Geography:
Europe

57155. Maastricht the Choice of Exchange Rate Regime in Transition Countires During the Run-Up to EMU

Author:
György Szapáry
Publication Date:
05-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper raises some specific issues concerning the choice of exchange rate regime in transition countries during the run-up to EU/EMU membership. It argues that there is no "one-size-fits-all" exchange rate regime that accession countries should uniformly adopt. It also argues that the Maastricht criterion on inflation is inconsistent with the catching-up process because of the Balassa-Samuelson effect and that this inconsistency will encourage a "weighing-in" syndrome: like the boxer who refrains from eating for hours prior to the weigh-in only to consume a big meal once the weigh-in is over, the candidate country will maintain very tight monetary policy and resort to all sorts of techniques (freezing of administered prices, lowering of consumption taxes, etc.) to squeeze down inflation prior to accession only to shift back gears after it has joined the EMU. Indeed, the convergence of short-term interest rates to EMU levels that will come with accession will automatically mean a loosening of monetary policy after the country has become a member of the monetary union. That loosening will be reinforced if the country had previously allowed its exchange rate to appreciate against the euro. The result of this stop-go cycle is that the efficiency of economic management will suffer. It would be better to recognize the principle of the Balassa-Samuelson effect explicitly in the Maastricht criteria by giving more room for maneuver than the one provided by the present rule. The paper makes suggestions on how the Maastricht criterion on inflation could be adjusted and discusses their merits. It concludes that a reasonable compromise would be to define the permissible inflation deviation in reference to the average inflation rate of the euro zone, not the three EU members with the lowest inflation rate.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe

57156. Missile Defence and European Security

Author:
François Heisbourg, Klaus Becher, Alexander Pikayev, and Ivo H. Daalder
Publication Date:
05-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
European NATO countries have been spectators to the debate about defending the US against ballistic missile attacks. While there have been national differences in Europe's reactions to the national missile defence (NMD) programme, it is obvious that most Europeans don't like it. The French seem somewhat more convinced than others that missile defence is inherently foolish and unworkable. Some British experts seem to insist more than others that any programme that might undermine NATO's nuclear deterrence and strategic unity should be avoided. And perhaps Germans, more than others, worry about perceived dangers to the ABM and other arms control treaties, and generally about relations with Russia. Most Europeans at present believe that US defence against long-range ballistic missiles is a slap in the face for Russia, a dangerous provocation for China and an inadequate response to the proliferation of weapons of mass destruction (WMD) and missile technology.
Topic:
Security, Defense Policy, NATO, and Terrorism
Political Geography:
Russia, United States, China, Europe, and Germany

57157. Foreign Direct Investment and Company Taxation in Europe

Author:
Agnès Bénassy-Quéré, Lionel Fontagné, and Amina Lahrèche-Révil
Publication Date:
04-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The growing globalisation of OECD economies, associated to the progresses in European integration, tends to increase the mobility of capital and to deepen the pressure on tax policies. On the one hand, tax policies are tied by the Stability Pact criteria: the limit imposed on budget deficits leaves little scope for tax rates to decrease. On the other hand, the growing mobility of capital tends to increase the elasticity of tax bases to tax rates, hence reducing the autonomy of governments in increasing taxes.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe

57158. Some Paradigms for the Evolving Map of Europe

Author:
Michael Emerson
Publication Date:
04-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Two sets of opposing paradigms governing the map of Europe are struggling to predominate at the beginning of this second decade of the post-communist era. At the macro (continental) level the struggle is between the Common European Home versus the Europe of Two Empires–the enlarging European Union, and a Russia newly re-assertive towards its near abroad. At the micro (state or entity) level the struggle is between the Nationalising State versus the Europe of Fuzzy Statehood. This double competition of paradigms is most intense and sensitive in Borderland Europe around the frontiers between the two empires, or in their Overlapping Peripheries. It seems that the Europe of Two Empires has much more political energy these days than the Common European Home; and in Borderland Europe the Nationalising State has more energy than Fuzzy Statehood. However these trends should be of concern, since they point to the persistence of tensions and in the worst cases conflicts. A successful and stable Europe would need to see more of the Common European Home and of Fuzzy Statehood.
Topic:
Security, Defense Policy, NATO, and Terrorism
Political Geography:
Russia and Europe

57159. Economic Integration Between the EU and the CEECS: A Sectoral Study

Author:
Francesca di Mauro
Publication Date:
04-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Economic integration between the EU and the CEECs has proceeded at high speed over the 90's, with the main channels of such integration being trade and FDI. Some authors believe that the 'commercial transition' is now complete and that a new, deeper phase of integration has started, with growing flows of FDI in the region. Following a gravity-type approach, in this paper I tackle two difficult issues surrounding the EU-CEECs integration: has FDI in the CEECs region substituted EU exports, therefore harming employment at home? Has FDI in the CEECs region been redirected away from similarly attractive countries, such as Spain and Portugal? By using a unique database on FDI broken down by country and by sector, which allows more detailed qualifications than possible in previous work, the answers to these two questions appear to be negative.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe, Spain, and Portugal

57160. Who Needs an Extenal Anchor?

Author:
Daniel Gros
Publication Date:
03-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper argues that there might be non-monotonic relationship between the strength of the domestic framework for fiscal policy and the interest of a country to use an external anchor to achieve price stability. Countries with a strong domestic framework, e.g. low public debt, little pressure for excessive expenditure and an efficient tax system, would anyway enjoy low inflation rates and therefore have little need for an external anchor. Countries with high debt or very weak institutions would greatly benefit from an external anchor to save them from the extreme inflation rates they would otherwise have to endure because the market knows that the temptation for them to inflate public debt away is so strong. By contrast, countries with moderately weaknesses might be in a situation where they need some inflation to supplement government revenues with seigniorage, but the inflation resulting from the interaction with the market, which knows about this, is still moderate.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe