Shane Fitzgerald

A portfolio of writing on politics and policy in Europe and Asia

Single Market Act Update

Though the bulk of recent European policy commentary has been understandably focused on the need to grips with what remains an existential crisis of the euro, it is important to also reflect on those medium and longer term EU policies which will play an important role in shaping the European economies in the years ahead.

Prime among these is the Single Market Act, which we covered in some detail upon its launch earlier this year. The Act comprises twelve levers designed to boost growth and strengthen confidence in the EU’s common market, which are being launched over the course of the next year or so by the European Commission with the support of the European Parliament and national governments.

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Eurobonds a Non-Starter for Now

The establishment of a system of Eurobonds, whereby bonds are issued on behalf of the Eurozone as a whole, has been proposed by many commentators as a way of ending the European sovereign debt crisis. Political proponents include Jean Claude Juncker, Giulio Tremonti, Guy Verhofstadt and even George Osborne. Opponents include Otmar IssingJan Kees De Jager and, crucially, Angela Merkel.

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Euro Crisis will Sideline UK in Europe

Europe’s financial, sovereign debt and political crisis shows no sign of abating and could yet trigger a fresh global catastrophe. The range of endgame options runs from a costly and contentious closer union among members of the Eurozone to its chaotic fragmentation. There are no good solutions, and no agreement on what might be the least-worst one.

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Combating the Crisis – The Role of the ECB

The European Central Bank has had a difficult time since the onset of the European sovereign debt crisis. Forced to step into a political vacuum caused by the failure of the European Union’s traditional policymaking process to get to grips with extraordinary events, it has tried to balance the sometimes competing demands of safeguarding the Euro, supporting the financial system, nurturing economic fundamentals and protecting its own integrity.

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Junking the Ratings Agencies

Yesterday Ireland joined Greece and Portugal in the credit rating ‘junkyard’ as Moody’s downgraded its debt to Ba1 level. The agency also put the country on a negative outlook, meaning that further downgrades are likely.

Ireland’s response is one of understandable frustration, as it has until now been widely commended for ‘getting with the programme’ and implementing harsh austerity measures. More interesting is the furious reaction of EU leaders, perhaps reflecting the fact that recent downgrades are less a verdict on the Irish or Portuguese economies than a condemnation of Europe’s collective failure to get to grips with a crisis that still threatens to engulf its single currency.

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A New Deal for Europe?

We’ve previously covered the work of the European Parliament’s Special Committee on the Financial, Economic and Social Crisis (CRIS Committee) on this blog and indeed the Chairman of the Committee, Dr Wolf Klinzvisited the IIEA in October to discuss its work.

Yesterday its Rapporteur, Pervenche Beres, presented her final report to the Parliament. A resolution backing the report was adopted with 434 votes in favour, 128 against and 33 abstentions.

The resolution is non-legislative but nonetheless is a strong demonstration of the European Parliament’s hopes for radical action to boost European competitiveness, employment, innovation and growth in the years ahead.

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Policymaking in Medias Res

We have had the hamartia – the tragic flaw in the system that allowed high-spending countries to free ride on low interest rates. We have had the hubris – the belief the good times would never end. We have had nemesis – disaster. We now need the anagnorisis …

So says the proud Eurosceptic, classical scholar and Mayor of London, Boris Johnson. But the epiphany for which he yearns is “the moment of recognition that Greece would be better off in a state of Byronic liberation, forging a new economic identity with a New Drachma. Then there will be catharsis, the experience of purgation and relief.”

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Global Food Demand: A Flavour of the Future

Yesterday, the OECD and the FAO published an Agricultural Outlook for the next ten years, showing the best estimates of how food prices are likely to change between now and 2020.

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Stability for Ireland and the Eurozone

A trio of leading economic experts have addressed the IIEA in recent weeks on the topic of Ireland’s sovereign debt crisis. Tellingly, each of them spent as much time speaking about the European dimensions of Ireland’s problems and their solutions as they did talking about domestic factors.

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Single Market Act – A European Patent

An effective patent regime is a key driver of innovation. But the current system of patent registration, protection, translation and litigation in the European Union is expensive and tortuously complex. Although a European Patent Office exists, individual patents still have to be validated and enforced separately in each jurisdiction. And, according to the European Commission, an EU patent validated in only 13 member states can cost up to €18,000, €10,000 of which relates to translation fees. That’s about 10 times higher than the cost of a patent for all of the US.

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