The “New” Stability and Growth Pact: More Flexible, Less Stupid?

Since the beginning of the European single currency project, the adoption of fiscal binding rules, restraining the use of the single policy instrument left for national authorities, has been challenged by many authors and politicians. The discussion has been rekindled in recent years, following a period of economic recession or stagnation in several Member-Countries and some criticisms linking the Stability and Growth Pact (SGP) to the general economic situation. Some of the questions raised by those who criticised the initial framework for fiscal discipline may have been taken into account in the recent revision of the SGP (March 2005), which followed the suspension of the Pact for Germany and France and eventually made the SGP more flexible and “less stupid”. In this paper, we evaluate the changes contained in the “new” SGP, by taking account of the properties for ideal fiscal rules put forward by Kopits and Symansky (1998) and comparing with some recently published studies on the same topic. The main result of our analysis points towards a clear increase in flexibility together with the probable emergence of new enforcement problems. In this context, an insufficient output in terms of fiscal discipline could arise, leading to the need for new improvements within the European framework for the definition and implementation of national fiscal policies.EMU, SGP, Fiscal Rules, Fiscal Discipline

Looking for the cure-all? Targets and the EU's New Energy Strategy. CEPS Policy Brief, No. 118, 23 January 2007

[From the Introduction]. On 10 January 2007, the European Commission outlined the European Union’s ‘energy and climate change vision’ based on two principal documents: • Communication on “An energy policy for Europe”, and • Communication on future climate change policy for the period post-2012 when the Kyoto Protocol expires, entitled “Limiting global climate change to 2°C: The way ahead for 2020 and beyond”.1 These two documents have been complemented by several other sectoral policy proposals on renewables, the functioning and implementation of the internal market, infrastructure (notably electricity interconnectors) and sustainable coal, nuclear and energy technologies. In its own words, the Communication on “An Energy Policy for Europe” aims at “combating climate change, limiting the EU’s external vulnerability to imported hydrocarbons, and promoting growth and jobs, thereby providing secure and affordable energy to consumers”. Within the European Commission, the most controversial issue has been the nature of long-term targets. While greenhouse gas emissions reduction targets2 and a binding EU target to source 20% of all energy from renewables by 2020 have been relatively uncontroversial from the beginning, the issue of additional sector-specific targets, for example for renewables as a share of electricity generation, and possibly for heating and cooling, transport and for combined heat and power, has been more difficult. The discussion about the need for these additional sectoral targets is likely to continue and come to the fore again in the negotiations in the Energy and Environment Councils in February, to be finally settled in the European Council on 8-9 March 2007

Revisiting the Stability and Growth Pact: grand design or internal adjustment?

The Stability and Growth Pact is under fire. Problems have appeared in sticking to the rules. Proposals to reform the Pact or ditch it altogether abound. But is the Pact a flawed fiscal rule? Against established criteria for an ideal fiscal rule, its design and compliance mechanisms fare reasonably well. Where weaknesses are found, they tend to reflect trade-offs typical of supra-national arrangements. In the end, only a higher degree of fiscal integration would remove the inflexibility inherent in the recourse to predefined budgetary rules. This does not mean that the EU fiscal rules cannot be improved. However, given the existing degree of political integration in EMU, internal adjustment rather than attempting to re-design the rules from scratch appears a more suitable way to bring about progress. Redefining the medium term budgetary target, improving transparency, tackling the pro-cyclical fiscal bias in good times, moving towards non-partisan application of the rules and improving transparency in the data can achieve both stronger discipline and higher flexibility.sgp, stability and growth pact, Buti, Eijffinger, Franco

A critical analysis of the Ethiopian Commercial Code in light of OECD Principles of Corporate Governance

This dissertation critically analyzes whether the current Ethiopian share company law (part of the Commercial Code) envisaged such outcomes or not by using the six key minimum standards of OECD Principles of corporate governance as a template. It demonstrates how the legal and regulatory framework of the share company law provisions apparently has failed to create incentives for market players and also failed to promote transparent and efficient market. To smooth the progress of new investment and provide adequate investors’ protection, this dissertation recommends Ethiopia should revisit and update its share company law in light of the relevant OECD Principles by taking into account its own legal, economic and cultural circumstances

NAFTA Renegotiation and Modernization

The 115th Congress faces policy issues related to the Trump Administration’s renegotiation and modernization of the North American Free Trade Agreement (NAFTA). NAFTA negotiations were first launched in 1992 under President H. W. Bush, who signed the agreement in December 1992, and continued under President Bill Clinton, who negotiated additional side agreements on labor and the environment. President Clinton signed the agreement into law on December 8 1993, (P.L. 103-182) and NAFTA entered into force on January 1, 1994. It is particularly significant because it was the most comprehensive free trade agreement (FTA) negotiated at the time, contained several groundbreaking provisions, and was the first of a new generation of U.S. FTAs later negotiated. Congress played a major role during its consideration and, after contentious and comprehensive debate, ultimately approved legislation to implement the agreement. NAFTA established trade liberalization commitments that set new rules and disciplines for future FTAs on issues important to the United States, including intellectual property rights protection, services trade, dispute settlement procedures, investment, labor, and the environment. NAFTA’s market-opening provisions gradually eliminated nearly all tariff and most nontariff barriers on goods produced and traded within North America. At the time of NAFTA, average applied U.S. duties on imports from Mexico were 2.07%, while U.S. businesses faced average tariffs of 10%, in addition to nontariff and investment barriers, in Mexico. The U.S.-Canada FTA had been in effect since 1989. Trade among NAFTA partners has tripled since the agreement entered into force, forming a more integrated North American market. The Trump Administration has made NAFTA renegotiation and modernization a prominent initial priority of its trade policy. President Trump has viewed the agreement as the “worst trade deal,” and has stated that he may seek to withdraw from the agreement. He has focused on the trade deficit with Mexico as a major reason for his critique. On May 18, 2017, the Trump Administration sent a 90-day notification to Congress of its intent to begin talks to renegotiate NAFTA, as required by the 2015 Trade Promotion Authority (TPA) (P.L. 114-26). Negotiations started August 16, 2017. Stating they are committed to an expeditious process, negotiators plan to have a series of seven rounds at three-week intervals for a conclusion by the end of 2017 or early 2018. The fourth round of negotiations began at the time this report was printed. The final text of the agreement will not be released until after negotiations are concluded. NAFTA parties have agreed that the information exchanged in the context of the negotiations, such as the negotiating text, proposals of each government, and other materials related to the substance of the negotiations, must remain confidential. Congress will likely continue to be a major participant in shaping and potentially considering an updated NAFTA. Key issues for Congress in regard to the renegotiation or modernization include the constitutional authority of Congress over international trade, its role in revising or withdrawing from the agreement, the U.S. negotiating objectives, the impact on U.S. industries and the U.S. economy, the negotiating objectives of Canada and Mexico, and the impact on broader relations with Canada and Mexico. The outcome of these negotiations will have implications for the future direction of U.S. trade policy under President Trump. NAFTA renegotiation may provide opportunities to address issues not covered in the original text. Technology and industrial production processes have changed significantly since it was negotiated. The widespread use of the Internet has affected economic activities and the use of e-commerce, for example. A modernization could incorporate elements of more recent U.S. FTAs, such as digital and services trade and enhanced IPR protection. Many U.S. manufacturers, services providers, and agricultural producers oppose efforts to eliminate NAFTA and ask that the Trump Administration strive to “do no harm” in the negotiations because they have much to lose if the United States pulls out of the agreement. Other groups contend that NAFTA should be rewritten to include stronger and more enforceable labor protections, provisions on currency manipulation, and stricter rules of origin

Fiscal Policy: Too Political?

The paper provides an analysis of the role of fiscal rules. The authors first provide a rationale for the existence of fiscal rules, namely to avoid a governmental bias toward budget deficits. The paper then surveys existing fiscal rules and analyzes their applicability in the context of the Czech Republic. The authors argue that the institutional arrangement of fiscal policy should mirror the arrangement that has emerged as regards monetary policy, namely a certain separation of powers in which an independent body would be responsible for setting the overall budget deficit level. In the case of the Czech Republic, the authors argue that the country needs a simple and transparent fiscal rule rather than a more sophisticated and seemingly more appropriate rule.fiscal policy; fiscal rules; public budgets

Resilience, Restoration, and Sustainability: Revisiting the Fundamental Principles of the Clean Water Act

Some of the major underpinnings of the Clean Water Act ( CWA ) merit reconsideration given changes in science and society. Any attempt at such a sweeping analysis of a statute that spans hundreds of pages of text would necessarily be incomplete, especially in a relatively short symposium essay. Therefore, I am taking a thematic approach based on the guiding principles Congress articulated in the law‘s opening provision: The objective of this chapter is to restore and maintain the chemical, physical, and biological integrity of the Nation‘s waters. From this overarching statement of the statutory goals, I will critique four major concepts. First, the concept of integrity was adopted and has been interpreted based on ecological concepts that have evolved considerably over time; today, there is greater recognition of the understanding that healthy ecosystems are evolutionary rather than static. In Part I, I address the need to move from a focus on ecological stability or equilibrium to an emphasis on ecological health and resilience of the nation‘s waters. Second, although the text says restore and maintain, the concept of restoration is unfortunately narrow in practice, in part due to limitations in the operative provisions of the law itself and in part due to the historically narrow focus of statutory implementation. In Part II, I propose a relative shift in focus from maintenance to restoration. Third, although Congress clearly recognized in 1972 that runoff from agriculture and other intensive land use contributes as significantly to water pollution as do discharges from municipal and industrial point sources, the operative provisions of the law were written—and certainly have been implemented—mainly with the latter in mind. In Part III, I suggest a shift in focus appropriate to the transition from an industrial to a post-industrial age. Finally, although Congress expressed a clear intent in 1972 to expand the scope of federal water pollution control efforts to the full extent permissible under the Constitution, its definition of the waters of the United States retained a reference to navigation, which the Supreme Court has interpreted as limiting the scope of the statute in some significant respects. In Part IV, I support efforts to expand the jurisdictional focus of the Act from navigable waters to sustainable waters, to better match the breadth of Congress\u27s constitutional authority, and to better fulfill the statutory focus on watershed and ecosystem health

The Global Employer: The Employment Law Reform Issue

[Excerpt] In this issue of The Global Employer Employment Law Reform issue, we explore recent reforms and their likely impact on employers in 10 jurisdictions, and also provide a roundup of trends and hot topics in other regions