Tomaso Duso, Klaus Gugler, Florian Szücs, 26 January 2014

In 2004, European merger law was substantially revised, with the aim of achieving a ‘more economic approach’ to merger policy. This column discusses a recent empirical assessment of European merger cases before and after the reform. Post-reform, the outcomes of merger cases became more predictable, and the Commission prohibited fewer pro-competitive mergers. While there remains room for improvement in several aspects, the reform seems to have been successful in bringing European competition law closer to economic principles.

Thorvaldur Gylfason, Per Wijkman, 25 January 2014

The EU’s Eastern Partnership is currently in turmoil. Armenia and Ukraine – two of the four partner countries (which also include Moldova and Georgia) did not initial association agreements. This column discusses the role of Russia in discouraging such negotiations. The soft power of the EU was apparently no match for the hard power of Russia in the cases of Armenia and Ukraine. A successful partnership would require peaceful international relations between the four partners, and solving their conflicts with Russia.

Nauro Campos, 22 December 2013

Mass political protests are erupting in Ukraine. The conventional wisdom views them as driven by popular dissatisfaction with the government’s rejection of the EU agreement. This column argues that the main cause for the protests is the weak institutional framework that emerged after the collapse of communism. Therefore, a potential EU involvement will be most beneficial in providing a stable institutional setting. Utilising this historical moment is important in order for Ukraine to avoid the example of Argentina.

Carlo Carraro, Thomas Longden, Giacomo Marangoni, Massimo Tavoni, 27 November 2013

In recent years, European coal consumption has increased, while natural gas consumption has declined – despite Europe’s commitment to reduce greenhouse-gas emissions. This perverse scenario is partly attributable to EU policies. Subsidies to renewables and energy efficiency targets have the unfortunate side effect of lowering carbon prices, thus partially offsetting their environmental benefits. Raising the EU carbon price would be preferable to employing multiple policy instruments, since it would minimise distortions in energy markets, achieve cost efficiency, and raise fiscal revenues.

Mario Mariniello, 22 September 2013

Cartel fines imposed by the European Commission routinely reach hundreds of millions of euro, having increased since the new 2006 fining policy. This column argues that they are still below their optimal level and come too slowly. Fines were often lower than the additional cartel profits and imposed 10 to 20 years after making the law-breaking decision was made – sometimes after the responsible managers had retired. To speed investigations, the Commission should Increase resources dedicated to inquiries; fines should also be raised.

Joakim Ruist, 17 September 2013

This year the free movement of eastern European workers within the EU has been questioned. Fearing excessive use of their own welfare systems, governments have argued for continued access restrictions. This column presents research showing that eastern European migrants have been net contributors to public finances of the richer EU15 nations that received them.

Henrik Kleven, Camille Landais, Emmanuel Saez, Esben Schultz, 17 September 2013

How responsive is international migration by high-skilled workers to tax differentials across countries? This column provides evidence from Denmark suggesting that a preferential scheme was highly successful in attracting rich foreigners. It warns that, absent international tax coordination, preferential tax schemes to high-income foreigners could substantially weaken tax progressivity at the top of the distribution.

Jeffrey Frankel, 07 August 2013

Can international trade be good for the environment? This column assesses the EU-Chinese anti-dumping dispute in detail, and argues that trade could well be the saviour of solar power. Trade was good for protecting against things like sulphur dioxide, in the case of automobiles, 30 years ago. The same is true of trade in solar equipment today. Westerners should celebrate the contribution of trade to reducing the cost of solar power, not block it with protectionist anti-dumping measures.

Liam Brunt, Edmund Cannon, 27 July 2013

The EU justifies its funding of large-scale transport infrastructure projects by arguing that it leads to more market integration. Does it work? This column uses evidence from Britain and its Industrial Revolution to assess the extent to which transport infrastructure projects increase market integration. By comparing industrialising Britain with today’s EU, the EU’s record turns out to be quite good and its investment in large infrastructure projects has led to significant price dispersion. However, recent financial turmoil has undermined its efforts in recent years.

Patrick Messerlin, 16 April 2013

Mega-regional trade arrangements are being negotiated in Asia. This column asks how Europe should respond and assesses which Asian trade deals would provide the biggest boost and the best insurance against discriminatory effects. The evidence tentatively suggests Europe’s best bets are Japan and Taiwan.

Simon Evenett, Robert Stern, 21 March 2013

The US and the EU have announced their intentions to launch trade talks – the Transatlantic Trade and Investment Partnership. This column argues that this should not be thought of as a standard tariff-lowering deal with a few extras thrown in for good measure. Rather, we don’t really know what it will do because trade economists have failed to develop the necessary tools for understanding its impact. It is time for policy analysts to re-tool.

Marco Annunziata, 20 March 2013

The Cyprus rescue package has elicited sharp reactions. This column argues that a tax on deposits is logical given the limited options, but guaranteed deposits should be spared on fairness and systematic grounds; a 15% tax on big deposits would be enough. Contagion is unlikely since Cyprus is different. Italian and Spanish savers are already alert to surprises such as the 1992 Italian bank deposit tax.

Charles Wyplosz, 18 March 2013

The Cyprus bailout package contains a tax on bank deposits. This column argues that the tax is a deeply dangerous policy that creates a new situation, more perilous than ever. It is a radical change that potentially undermines a perfectly reasonable deposit guarantee and the euro itself. Historians will one day explore the dark political motives behind this move. Meanwhile, we can only hope that the bad equilibrium that has just been created will not be chosen by anguished depositors in Spain and Italy.

John Driffill, 08 March 2013

How do we solve worryingly high unemployment across Europe? In a time of crisis, would reform actually exacerbate unemployment? This column argues that labour markets – especially in southern Europe – have to be reformed, presenting policy prescriptions to that effect. If we are to break the back of sluggish labour markets, policymakers need to learn from Europe’s success stories.

Nicolas Véron, 05 March 2013

The EU was once a champion of global financial regulatory convergence. What happened? This column argues that the EU should drop its lacklustre inertia and pursue Basel III because, in the end, it’s in its interests to comply. EU policymakers ought to aim at enabling the adoption of a Capital Requirements Regulation that would be fully compliant with Basel III.

Hylke Vandenbussche, Jozef Konings, 30 January 2013

The rise of international production sharing – ‘global value chains’ – has transformed international commerce and pushed economists into new territory. This column argues that there is evidence to suggest that old-fashioned protection can have an unexpected negative effect on firms that are part of a global value chain. In an increasingly globalised world, exporters’ success seems to positively depend on the free entry of imports rather than the other way round.

Giorgio Basevi, 23 January 2013

Is European economic recovery being delayed by political procrastination? Are electoral cycles hindering a return to growth? This column argues that by synchronising European nations’ electoral cycles (along with those of the European Parliament), Europe can avoid its current slow and jittery approach. Creating a synchronised Europe-wide voting period would do away with overlapping national electoral cycles. A common national and European voting period would reduce political uncertainty, ensuring quicker policymaking response times for a smoother, quicker route to recovery.

Thorvaldur Gylfason, Per Wijkman, 04 November 2012

Today, most of Europe is free from dictatorships and conflict. Yet, these spectres loom in neighbouring states and nearby regions. This column suggests that this year’s Nobel Peace Prize, awarded to the EU, was perhaps a call to action. Can the EU, preoccupied as it is with a growing Eurozone crisis, encourage peace and democracy in its neighbourhood? And what are the lessons we can learn from recent EU policy history?

Cameron Hepburn, 30 October 2012

The EU’s Emissions Trading System includes all flights to, from and within Europe as eligible for regulation – something that has faced strong opposition from the US and China. With Airbus’s orders from China falling, the pressure has grown from within Europe. This column argues that for reasons of economic principle, legality and practicality, the EU should stand its ground.

Patrick Messerlin, Sébastien Miroudot, 07 September 2012

Public spending on large-scale projects is often a way of sneaking in protectionism through the back door and there are many cases of outright corruption. With the EU and US pushing hard for more open public procurement elsewhere in the world, this column asks just how open these markets are, particularly in the EU, which claims to have the most open market in the world.

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