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EU Monitor

The series "EU Monitor" focuses on political, economic and monetary developments in the enlarged EU. The spectrum ranges from political commentaries and reform of the EU institutions to matters pertaining to the European Economic and Monetary Union, financial-market and banking aspects, and the consequences of enlargement for specific sectors and countries.

78 Documents
December 12, 2018
Topic:
Since the rally in 2017, the buzzwords bitcoin and blockchain have been omnipresent in the public. Still, the understanding of how much potential the technology actually offers is often rudimentary. To shed more light onto the discussion, we discuss the manifold technological facets as well as the social changes that might come on the heels of the technology. After outlining the utopia, we point out the technical as well as the social hurdles that are standing in the way of the revolution. [more]
1
October 24, 2018
Region:
Accelerated by the consequences of the financial/economic and migration crisis, the influence of anti-European, anti-migration movements with a populist playbook in the EU is growing. For the EU, the next crucial stocktaking of voters’ sentiment will be the 2019 elections for the European Parliament on 23-26 May. The European political landscape and with it the composition of national parliaments in the EU member states has changed over the last five years and in some countries substantially so. These shifts can be expected to be reflected in the next European Parliament as well, and – as already the case in the Council – impact European policymaking. [more]
2
October 12, 2018
Region:
During the last few years, the expansion of digital infrastructure in the EU has been carried out more slowly and less comprehensively than politically intended. The EU’s objective of ensuring fast broadband coverage of more than 30 megabits per second for all Europeans by 2020 seems out of reach. There are economic and regulatory reasons for the insufficient progress with digital infrastructure improvements. However, inadequate digital infrastructure puts companies at a disadvantage versus US competitors, but increasingly also versus Chinese players. The European Commission estimates that more than EUR 500 bn will need to be invested by 2025 to achieve the goal of a “gigabit society”. [more]
3
July 2, 2018
Region:
The UK’s exit from the EU will have significant repercussions for the financial industry, notably investment banking. London as the primary European hub is likely to lose its full access to the single market. Currently, financial services exports play a major role for Britain and almost half of them go to the EU. Without the surplus it generates from providing investment banking services to EU customers, Britain’s current account deficit would be 40% higher. Following Brexit and the likely loss of the single European passport, non-EU banks will have to set up or build-out subsidiaries in the EU-27 with own capital, liquidity, corporate governance and fully-fledged operations. This could lead to an additional EUR 35-45 bn of capital being ‘ring-fenced’. This represents a further leg of banking balkanisation with trapped capital, liquidity and resources – profitability will be under pressure and not all EU business models will be viable. [more]
4
June 28, 2018
Region:
Analyst:
With the new Payment Services Directive ("PSD 2") of the EU, which entered into force on 13 January 2018, payment services in Europe have become the frontrunner of "open banking". Account holders can request, free of charge, that banks transmit their financial data in digital form to third parties. Furthermore, they can authorise third-party providers to initiate payments from their bank account. Personal data are owned by the data subject – this principle also forms the basis of the new General Data Protection Regulation (GDPR). Under the latter, however, there is no obligation to provide a technical solution through which customers can transmit their personal data to third-party providers in a convenient manner. In contrast to the PSD 2, the GDPR is therefore unlikely to stimulate innovation and competition in payments. In the financial sector, competition will thus be distorted. Banks must grant competitors access to customer data and their payment infrastructure, whereas internet platforms, for instance, de facto retain sovereignty over the personal data of their customers as well as access to their platforms. [more]
5
May 14, 2018
Developments in artificial intelligence and robotics have far-reaching economic and sociopolitical consequences, with some of them already materialising today. Still, the implications of further progress in these fields are not well understood. Economies around the world are likely to be impacted differently by the diffusion of AI technologies and robotics as wealthy industrial countries might increasingly “re-shore” production. To forge ahead and maximise the benefits for economies and societies, a balance needs to be found globally between successfully promoting key technologies and industries and avoiding the risk of rising protectionism and "knowledge wars". As the pace of technological change and the related launch of new business models are unlikely to slow, the ability of the state and regulators to keep pace is challenged. [more]
6
April 12, 2018
Region:
The EU institutions are about to decide on major new rules regarding the reception and the treatment of asylum applicants as well as their allocation among member states. The trigger for the intended reforms relate to the current regulatory framework’s shortcomings that emerged during the refugee crisis: an uneven sharing of responsibilities for asylum procedures and massive irregular migration within the EU. However, the Dublin procedure recast has stalled, as several member states strictly refuse the planned corrective mechanism for a fair sharing of responsibility. The prospects seem to be more favourable with regard to the harmonisation of the asylum procedures and conditions. [more]
7
February 28, 2018
Region:
2018-2019 will be crucial for the future of EU finances. Compared to previous MFF negotiations, this time the challenges ahead are disproportionally larger, including a large annual budget gap of above EUR 10 bn to be left by the UK's exit from the Union. Our scenario analysis illustrates that Western and Northern European members would see their net contributions deteriorate most in case of a substantial budget expansion in order to cover the UK shortfall as well as additional spending needs. Eastern European members would be hurt most by the alternative of harsh spending cuts to close the Brexit gap in the budget. To complicate matters further, the abolishment of the UK rebate and probably all "rebates on the rebate" will lead to a redistribution of costs among members. Profound discussions will therefore be necessary regarding the prioritization, efficiency, subsidiarity and cost sharing. [more]
8
February 15, 2018
Analyst:
The rise of bitcoin and other cryptocurrencies and the decline in cash payments are the background for a new concept: digital cash issued by central banks. An old academic debate about who creates money and how is resurfacing, but what about the user’s perspective? Why would we use crypto euros? Such digital cash would compete against bank deposits, physical cash and private cryptocurrencies to win over consumers in the areas of payments and savings. [more]
9
February 9, 2018
Opinions differ when it comes to bitcoin. Discussions are triggered largely by bitcoin’s spectacular price increasess and are not very informed or nuanced. In this paper we focus on several standard claims, which we will put into context and, if necessary, rectify. This will hopefully help our readers to familiarise themselves with the topic. [more]
10
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