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42. Geopolitical Shifts in the Eastern Mediterranean
- Author:
- Patrick Nopens
- Publication Date:
- 02-2013
- Content Type:
- Policy Brief
- Institution:
- EGMONT - The Royal Institute for International Relations
- Abstract:
- Three major geopolitical events are putting the stability of the Eastern Mediterranean at risk. Most of the region is in a deep monetary and economic crisis. The Arab Spring is causing turmoil in the Levant and the Maghreb. Gas and oil discoveries, if not well managed, could further destabilise the region. At the same time, Russia and Turkey are staging a comeback. In the face of these challenges, the EU approaches the Greek sovereign debt crisis nearly exclusively from a financial and economic viewpoint. This brief argues that the EU has to develop a comprehensive strategy for the region, complementing its existing multilateral regional framework with bilateral agreements in order to secure its interests in the Eastern Mediterranean.
- Topic:
- Security, Debt, Oil, Regime Change, and Financial Crisis
- Political Geography:
- Russia, Europe, Turkey, and Arabia
43. A case for adjusting fiscal consolidation in the eurozone
- Author:
- Xavier Vanden Bosch
- Publication Date:
- 01-2013
- Content Type:
- Policy Brief
- Institution:
- EGMONT - The Royal Institute for International Relations
- Abstract:
- Fiscal consolidation is essential to ensure the sustainability of euro zone countries' public debt. However, as a principle, consolidation should not be pursued at a pace unnecessarily undermining growth in the short term. Repeated downward revisions of growth call for the use of the flexibility foreseen in the EU fiscal framework. The Commission should adapt the deadlines for fiscal correction to prevent excessive, pro-cyclical adjustment in 2013. In turn, adequate surveillance and coordination must ensure structural adjustments constitute the core of fiscal consolidation plans.
- Topic:
- Debt, International Trade and Finance, Monetary Policy, and Reform
- Political Geography:
- Europe
44. Updating The EMU: Differentiated economic integration in the European Union
- Author:
- Samu Kurri
- Publication Date:
- 11-2013
- Content Type:
- Policy Brief
- Institution:
- Finnish Institute of International Affairs (FIIA)
- Abstract:
- The financial and economic crisis has reinforced the two-layer economic integration structure in the EU. Many of the new rules and structures created during the crisis have focused on a solution to the euro crisis and are thus euro area-specific. There is little evidence, however, that the situation would have dramatically changed compared to the Maastricht EMU. All of the changes are still in line with the basic idea that all EU countries will join the euro when they are ready to do so. One of the key questions in the near future is likely to centre on the contours of the euro area specific decision-making, its relationship to the EU as a whole, and its institutions and procedures. Even if the Euro group remains 'formally informal', it has managed to transform itself into a de facto institution within the EU, and its role and weight is likely to increase rather than decrease.
- Topic:
- Debt, Economics, Monetary Policy, Financial Crisis, and Reform
- Political Geography:
- Europe
45. The Asset Quality Review and Capital Needs: Why re-capitalise banks with public money?
- Author:
- Daniel Gros
- Publication Date:
- 12-2013
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- There are three aggregate numbers that describe the problem the Single Supervisory Mechanism (SSM) is inheriting: the 130 banks under its direct supervision hold assets worth 250% of the euro area's GDP, their capital is equivalent to only 4% of their assets' value and they have made zero profits, in the aggregate, over the last four years.
- Topic:
- Debt, Economics, Markets, Financial Crisis, and Reform
- Political Geography:
- Europe
46. Net Neutrality and Mandatory Network-Sharing: How to disconnect the continent
- Author:
- Andrea Renda
- Publication Date:
- 12-2013
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- A lively debate emerged on the proposed "Connected Continent" legislative package presented by the European Commission in September 2013. The package contains a proposed rule on the 'open Internet', which was heavily discussed in European Parliament hearings in early December. This commentary argues that while the proposed rule is in principle balanced and appealing, it is utterly impractical due to the enormous uncertainty that its application would entail. At the same time, the rule is very far from what neutrality proponents have argued for almost a decade: rather than the place for internet freedom, it would transform the Web into a place requiring constant micro-management and tutoring of user behavior. Both arguments lead to the conclusion that the current proposal should be at once reformed and analysed under a more holistic lens. On the one hand, Europe should launch an ambitious project for the future, converged infrastructure by mobilising resources and reforming rules to encourage investment into ubiquitous, converged, 'always on' connectivity. On the other hand, enhanced legal certainty for broadband investment could justify a more neutrality-oriented approach to traffic management practices on the Internet. The author proposes a new approach to Internet regulation which, altogether, will lead to a more balanced and sustainable model for the future, without jeopardising user freedom.
- Topic:
- Debt, Economics, Monetary Policy, Infrastructure, and Financial Crisis
- Political Geography:
- Europe
47. Policy Lessons for Macroeconomic and Financial Crisis Management in the Southern and Eastern Mediterranean
- Author:
- Rym Ayadi and Willem Pieter De Groen
- Publication Date:
- 12-2013
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- The 2007-09 global financial crisis led to a virtual collapse in economic activity and increased financial volatility worldwide. For the developing countries, the main channel of transmission has been a drop in external transactions, such as trade, financial and capital flows, and remittances. The southern and eastern Mediterranean countries (SEMC) have also faced declining economic activity, although there seems to be considerable variation in the relative magnitudes and timing of the decline. Most of the economies in the Mediterranean basin have had delayed but longer-lasting consequences as a result of the crisis, driven mostly by their endemic trade and investment ties with the EU and the Gulf Cooperation Council (GCC) countries.
- Topic:
- Debt, Economics, Markets, Monetary Policy, and Financial Crisis
- Political Geography:
- Europe
48. Strong Governments, Weak Banks
- Author:
- Paul De Grauwe and Yuemei Ji
- Publication Date:
- 11-2013
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- One of the more troublesome features of banks is that they still hold so little equity. In 2013 the capital and reserves of EU banks amounted to only 7.6% of total balance sheets. Well-run businesses outside the banking sector typically hold equity shares of 20%, 30% or more of their balances sheets. For good reasons; these well-run firms know that shocks can occur that could wipe out large parts of their balance sheets. Good business strategy thus leads these firms to hold sufficiently large buffers to avoid bankruptcy.
- Topic:
- Debt, Economics, and Monetary Policy
- Political Geography:
- Europe
49. The New European Framework for Managing Bank Crises
- Author:
- Stefano Micossi, Jacopo Carmassi, and Ginevra Bruzzone
- Publication Date:
- 11-2013
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- The European Commission proposal for a Regulation establishing a European Single Resolution Mechanism (SRM) for banks is now under consideration before the European Parliament and the Council. The main principles and tools applicable for resolving a failing bank are contained in the June 2012 Commission proposal for a Directive on bank recovery and resolution (BRR), aimed at harmonising crisis management and resolution tools in EU member states, which is also under consideration by the European legislators. Any discussion of the new system must therefore be based on both proposals.
- Topic:
- Debt, Economics, International Trade and Finance, Markets, Monetary Policy, and Reform
- Political Geography:
- Europe
50. Pushing the Turbo Button: What Next for the Polishâ?"Romanian Strategic Partnership?
- Author:
- Stanislav Secrieru, Lukasz Kulesa, Agnes Nicolescu, and Anita Sobják
- Publication Date:
- 11-2013
- Content Type:
- Policy Brief
- Institution:
- The Polish Institute of International Affairs
- Abstract:
- With the global economic downturn and its implications for the broader political and security architecture of the EU, the Polish—Romanian Strategic Partnership signed in 2009 is now ripe to take the positive relationship to a new level and to be further fleshed out. To this end, political coordination needs to be upgraded for promoting common interests, such as economic stability and solidarity within the Union, continued support to agriculture and cohesion policy as an important priority for EU funding, increasing the energy security of the region, engaging the neighbourhood, particularly Moldova and Ukraine, and maintaining the relevance of CSDP and of article 5 of the Washington Treaty high on the European agenda. The management of instability and protracted conflicts in their neighbourhood are also among their shared concerns. Translating these common priorities into concrete actions should aim at pushing the "turbo button" on the partnership, and help both countries achieve their goals.
- Topic:
- Security, Debt, Diplomacy, International Trade and Finance, Monetary Policy, and Financial Crisis
- Political Geography:
- Europe
51. Due Diligence: An Impertinent Inquiry into Microfinance
- Author:
- David Roodman
- Publication Date:
- 01-2012
- Content Type:
- Policy Brief
- Institution:
- Center for Global Development
- Abstract:
- Microfinance: Few development ideas have been so buoyed by high expectations in recent decades, and few have been so buffeted by difficulties in recent years. Images of microfinance lifting people out of poverty now compete with ones of the poor driven by debt to suicide. Where does the truth lie? David Roodman investigates in Due Diligence. He finds no evidence that small loans lift people out of poverty en masse but argues that financial services, like clean water and electricity, are essential to a modern life. The practical question is not whether microfinance should continue, but how it can play to its strengths, which lie in providing useful services to millions of poor people in a businesslike way. Due Diligence is the most complete investigation ever into the sources and consequences of microfinance. Rood - man explores the financial needs of poor people, the history of efforts to meet those needs, the business realities of doing so, and the arguments and evidence about how well modern microfinance is succeeding.
- Topic:
- Debt, Development, Economics, Globalization, Poverty, and Foreign Direct Investment
52. Bringing Stability to Europe: Why Europe needs a banking union
- Author:
- Erik Jones
- Publication Date:
- 11-2012
- Content Type:
- Policy Brief
- Institution:
- Finnish Institute of International Affairs (FIIA)
- Abstract:
- The European sovereign debt crisis is the result of capital flows across the single market. The danger that such capital flows could unleash market speculation was known from the start; indeed, the single currency was created to remove the threat of exchange rate instability. The problem is that the architects of the single currency did not consider the impact of capital market integration on the banking sector or on the relationship between banks and national governments. Once markets lost confidence in the security of their cross-border investments, investors began to pull back their capital and the internal market for financial services started to disintegrate. The creation of a banking union is part of the solution. However, the euro area also needs a common 'risk-free' asset to use as a safe haven in times of crisis.
- Topic:
- Debt, Economics, Markets, and Financial Crisis
- Political Geography:
- Europe
53. The United States and the Global Future
- Author:
- Banning Garrett, James B. Steinberg, David Ignatius, and Uri Dadush
- Publication Date:
- 03-2012
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- How will the US economy evolve over the next twenty years and what might be the impact of various US economic scenarios on the global system? Will the United States have a Japan-like decade or two of anemic growth? If so, would this lead the United States to reduce its foreign involvement and commitments, become more protectionist, and focus on its internal problems? Or will the United States solve its fiscal and debt problems, reinvigorate growth and innovation, and return to sustainable economic growth? Would this underpin a renewed commitment to active US global leadership in mobilizing international cooperation to manage security, economic growth, and global challenges?
- Topic:
- Foreign Policy, Debt, Economics, International Trade and Finance, and Hegemony
- Political Geography:
- United States and North America
54. Spain's fiscal targets should be eased
- Publication Date:
- 01-2012
- Content Type:
- Policy Brief
- Institution:
- Oxford Economics
- Abstract:
- The Spanish government has announced that the fiscal deficit for 2011 may be even worse than expected, perhaps even exceeding 8% of GDP. In response to this overshoot, the authorities have so far announced additional spending cuts and tax rises amounting to €15bn. But fiscal tightening will have to be even more severe if the government wants to meet its 4.4% of GDP deficit target for 2012.
- Topic:
- Debt, Economics, Government, Monetary Policy, and Financial Crisis
- Political Geography:
- Spain
55. Fixing Mortgage Finance: What to Do with the Federal Housing Administration?
- Author:
- Mark A. Calabria
- Publication Date:
- 02-2012
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- While Fannie Mae, Freddie Mac, and private subprime lenders have deservedly garnered the bulk of attention and blame for the mortgage crisis, other federal programs also distort our mortgage market and put taxpayers at risk of having to finance massive financial bailouts. The most prominent of these risky agencies is the Federal Housing Administration (FHA).
- Topic:
- Debt, Economics, Government, and Financial Crisis
- Political Geography:
- United States
56. Interest Rate Shock and Sustainability of Italy's Sovereign Debt
- Author:
- William R. Cline
- Publication Date:
- 02-2012
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Contagion from Greece, together with domestic political uncertainty in Italy, caused interest rates on Italian sovereign debt to spike in the second half of 2011. As shown in figure 1, the risk spread above German bunds for 10-year Italian government bonds rose from 200 basis points in early July 2011, to a range of 300 to 400 basis points after the July 21 Greek package with its new emphasis on private sector involvement. There was a second surge to the 400 to 500 basis point range in November through January, following the October 27 Greek package that insisted on a 50 percent reduction in private sector claims.
- Topic:
- Debt, Economics, and Financial Crisis
- Political Geography:
- Europe, Germany, and Italy
57. Liquidity in times of crisis: Even the ESM needs it
- Author:
- Daniel Gros and Thomas Mayer
- Publication Date:
- 03-2012
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- This paper argues that the new permanent European rescue fund, the European Stability Mechanism (ESM), should be provided with a liquidity backstop by having it registered as a bank – and be treated as such by the European Central Bank. If the crisis were to become acute again, the ESM would stand ready to intervene in secondary markets, potentially with almost unlimited amounts of funding. Access to central bank financing will be crucial in a future crisis, because in such a crisis risk aversion is likely to be extreme, and even the ESM might not be able to raise at very short notice the huge sums that might be required to prevent a breakdown of the financial system. Hundreds of billions of euro might be needed just to top up the programmes for Greece, Ireland and Portugal – and Spain and Italy may require more than a thousand billion euro. Sums of this order of magnitude cannot be raised quickly by a new institution. Simply increasing the headline size of the ESM might thus be of little use.
- Topic:
- Debt, Economics, Monetary Policy, and Financial Crisis
- Political Geography:
- Greece, Spain, Italy, Portugal, and Ireland
58. The Spanish Hangover
- Author:
- Daniel Gros and Cinzia Alcidi
- Publication Date:
- 04-2012
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- 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.
- Topic:
- Debt, Economics, Markets, and Financial Crisis
- Political Geography:
- Europe and Spain
59. The Freedom Savings Credit: A Practical Step to Build Americans' Household Balance Sheets
- Author:
- Lisa Mensah, Raymond O'Mara III, Colby Farber, and Robert Weinberger
- Publication Date:
- 02-2012
- Content Type:
- Policy Brief
- Institution:
- Aspen Institute
- Abstract:
- The imbalance of too much debt and not enough assets fuels financial insecurity in many American households. Building Americans' household balance sheets should start with making savings and asset-building incentives more efficient and equitable. Although millions of working Americans currently receive little or no tax incentive to save, modest reforms to our tax code have the potential to dramatically improve their financial futures. The Aspen Institute Initiative on Financial Security (Aspen IFS) proposes the Freedom Savings Credit to create a more equitable and economically efficient savings system that will benefit millions of American households and the nation as a whole.
- Topic:
- Security, Debt, Economics, and Financial Crisis
- Political Geography:
- United States and America
60. EIU: Global outlook summary
- Publication Date:
- 06-2012
- Content Type:
- Policy Brief
- Abstract:
- The global economy remains in precarious shape. Europe's debt crisis rages on, and although the euro appears to have survived its most recent test in the form of the Greek election on June 17th, austerity and financial-market uncertainty are depressing economic activity in Europe and, by extension, in much of the rest of the world. The Economist Intelligence Unit continues to expect global GDP growth to slow in 2012, and while our forecasts for the G3 economies—the US, euro zone and China—are essentially unchanged this month, we have cut our projections for Brazil and India.
- Topic:
- Debt, Economics, International Trade and Finance, Markets, and Financial Crisis
- Political Geography:
- United States, China, Europe, India, and Brazil