No Green Growth Without Innovation
by Philippe Aghion, David Hemous, Reinhilde Veugelers on 23 November 2009
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Category: POLICY BRIEFS
Topics: Climate change and energy
This Policy Brief, co-written by Senior Non-Resident Fellow Philippe Aghion, Senior Resident Fellow Reinhilde Veugelers and David Hemous of Harvard University, attempts to change the terms of the debate surrounding climate change policy. The authors argue that policymakers should do more to encourage innovation and investment in ‘green’ research and development rather than focusing solely on the setting of a carbon price. Using a model developed by Aghion in a previous paper, they argue that a carbon price would have to be about 15 times higher in the first five years and 12 times higher in the next five years if innovation is not properly subsidized by governments. The authors also provide several policy recommendations for incentivising this type of ‘green growth’ in the private sector.
More Than One Step to Financial Stability
by Garry Schinasi on 28 October 2009
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Category: POLICY BRIEFS
Topics: Financial markets and regulation
Visiting Scholar Garry Schinasi examines the European proposals for the creation of both a European Systemic Risk Board (ESRB) to oversee macroprudential regulation and a European System of Financial Supervision (ESFS) to strengthen microprudential supervision. He argues that structural vulnerabilities of this regulatory framework need to be addressed to ensure that the early-warning systems will be adequate to avoid future crises. Specifically, Schinasi points to the fact that the ESRB lacks binding powers to enforce regulation as well as the lack of a legislative framework to resolve the insolvency of systemically important financial institutions (SIFIs).
A European Exit Strategy
by Jürgen von Hagen, Jean Pisani-Ferry, Jakob von Weizsäcker on 14 October 2009
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Category: POLICY BRIEFS
Topics: Budgetary and monetary policies, Financial markets and regulation
This Policy Brief was adapted from a paper written by the three authors and presented by Bruegel Director Jean Pisani-Ferry at the informal ECOFIN Council meetings in Gothenburg, Sweden, on 1 Oct. In the brief, the authors argue that bank recapitalisation and restructuring should be a matter of urgency for EU member states and that governments should not undertake the necessary fiscal and monetary policy exit until problems within the financial sector are addressed. The authors also recommend that European states set debt targets to be reached by the end of 2014 and explain that proper incentives are necessary to ensure that an exit strategy, once implemented, is done so in coordination between various institutional actors. Such a policy framework should be in place by summer 2010, the authors say, in order to avoid a buildup of financial instability during the process.
A better process for a better budget
by Susanne Neheider, Indhira Santos on 28 July 2009
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Category: POLICY BRIEFS
Topics: Budgetary and monetary policies, European and global governance
This policy brief provides a practical solution to facilitate reform of the EU budget decision-making process, overcome the detachment of EU spending from political priorities and increase focus on EU public goods. As the negotiations for the next financial framework are expected to start in less than two years, the window of opportunity for reform is closing rapidly. Additional pressure arises from the need to design a substitute, by Spring 2010, for the Lisbon Strategy that better aligns EU policy goals and spending. For the authors now is the time for reform.
A solution for Europe's banking problem
by Adam Posen, Nicolas Véron on 11 June 2009
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Category: POLICY BRIEFS
Topics: Financial markets and regulation
Nicolas Véron and Adam Posen believe Europe should build new long term European joint-action to face the likely high rising number of insolvent banks on the continent. The authors propose on the one hand, a centralised triage and restructuring process of bad European banks lead by a new temporary European Institution, a European Bank Support Authority (EBSA), and on the other hand, long-term EU Institutions dedicated to the completion of an integrated market.