This is a blog written by alumni of the EPA MA programme in Maastricht.
Bursting the Bubble

The Future of the Banking Union: ECB’s supervisory role challenged at EU’s court

9 April 2015 | by

While our eyes are currently firmly fixed on Greece, which is often perceived as the most acute threat to the Eurozone’s future, in the meantime the stability of the Europe’s monetary union is being undermined by the back door. That is because the newly established supervisory role for the European Central Bank (ECB) has recently been challenged at the Court of Justice of the European Union (CJEU).

As of November last year the ECB has become the main supervisor of Europe’s financial institutions. The idea of oversight concentrated in the hands of the ECB, and away from the national authorities was born out of the recent financial crisis which trapped countries in the ‘vicious circle’ between banks and sovereigns (i.e. public debt).

The final agreement, like any other compromise at the EU level, was paved by a number of concessions especially to the most powerful Euro-member, Germany. While originally the European Commission envisaged the ECB to regulate all Eurozone banks, no matter the size of their assets, Berlin insisted that the scope of the supervisory role be limited and more focused on major rather than smaller banks.

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Schengen in the Wake of Germanwings Tragedy: Reconciling Freedom and Security

7 April 2015 | by

Security and liberty are not easy bedfellows.

In 1667, the French government created the first modern police force. It was created with the mission of providing safety – and representing the government – in Paris, Europe’s largest city at the time. In 1797, the British government considered creating a similar force, to limit theft and unlawfulness affecting London’s booming docklands. In the British context, the creation of the police met with public hostility, some even perceived as a “foreign import” and an assault on citizen’s freedoms (oh, how some things never change…). Continue reading

The Truth Behind Youth Unemployment: Collective cost of individual disengagement

9 March 2015 | by

A week ago the Eurostat published the latest of the series of EU unemployment figures. There is good news and bad news. The level of unemployment level fell from December’s 9.9% to 9.8%. On a year-on-year comparison the overall unemployment rate decreased by 0.8% or 1.82 million people. That is certainly not an insignificant figure but at the same time it is hardly a reason for celebration. The situation in Europe remains critical especially in comparison to the United States where the level of unemployment is half of that in the EU (in February 2015 the US unemployment rate stood at 5.5%). Continue reading

ECI recap at the European Parliament

6 March 2015 | by

Last week, on 26th of February 2015, the PETI and AFCO committees at the European Parliament hosted a public hearing on the European Citizens Initiative (ECI). The event brought together representatives from the European institutions, the European Ombudsman, campaigners and experts to discuss the lessons learned.

Since the ECI regulation entered into force on 1st of April 2012, 51 ECI have been proposed, from which 20 have been rejected. From the remaining 31 registered, only 3 successfully gathered 1 million valid signatures on time; i.e. Right2Water, One of us, and Stop Vivisection.

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Greece, Syriza and the EU Banking Union

11 February 2015 | by

A Shifting Landscape

In October 2014, the European Central Bank concluded a year-long assessment of the balance sheets for Europe’s 130 largest banks, known formally as the ‘Comprehensive Assessment’. It revealed a cumulative capital shortfall of €24.6 billion euros among 25 of the euro areas’ largest lenders under ‘adverse’ circumstances. Three out of four of Greece’s largest banks failed to meet the capital requirements imposed by the ECB. While this did not come as a surprise considering the country’s financial troubles, the outcome was in fact less alarming than it would at first seem. Taking capital accretion and projected future earnings into account, only one of the three failed Greek banks were actually expected to fall short in such a scenario – and even then only by a small margin.

However, neither the banks nor the ECB could have anticipated the drastic shift in the political climate signalled by the rise to power of the anti-austerity Syriza party. Its uncompromising stance on the bailout programme coupled with the promise to halve Greece’s debt has frightened many investors. Over 20 billion euros (12 percent of Greek GDP) has already left the country since December. In mid-January, Eurobank and Alpha Bank, Greece’s third and fourth largest banks, sought access to emergency funds from the national central bank. This type of funding, known as emergency liquidity assistance (ELA), is made available to borrowers at a much higher interest rate: 1.55 percent compared to 0.05 percent for ordinary lending. As such, this type of financing is only meant to act as a short-term liquidity bridge, rather than address persistent structural problems such as those facing the Greek banking system.

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