Ukraine has long been castigated for its noncommittal attitude to cooperation with the EU, this being part of its ‘multi-vector’ foreign policy. Such a policy was widely attributed to the failings of domestic elites, which delay reform for fear of losing rents and power. This CEPS Working Document suggests, however, that the recent setback in EU-Ukraine relations highlights more complex reasons behind this. First, it asserts that a pro-European vector is not a self-evident choice for Ukraine, which is economically interdependent with both Russia and the EU.

This paper analyses the evolution of public support for the euro from 1990 to 2011, using a popularity function approach, focusing on the most recent period of the financial and sovereign debt crisis. Exploring a huge database of close to half a million observations covering the 12 original euro area member countries, we find that the ongoing crisis has only marginally reduced citizens’ support for the euro – at least so far. This result is in stark contrast to the sharp fall in public trust in the European Central Bank.

This paper examines two questions related to the sustainability of the major neoliberal, economic and social reforms in the new EU member states, namely the flat income tax and private pension pillars. First, we look at the relationship between the political consensus/controversy at the time major policy reforms were passed and the future sustainability of these reforms after a change of government.

This paper looks at restrictions of passage, accidents and oil transportation norms as causes of interruption in oil supplies. The key ‘chokepoints’ are discussed in detail: the Straits of Hormuz, Malacca, Bab el-Mandeb, the Canals of Suez and Panama, the Turkish Straits and the entrance to the Baltic Sea. It is concluded that in most cases the danger of closure can only be temporary; nevertheless, investment in bypasses and alternatives is highly desirable, and in the case of the Turkish Straits, has not been forthcoming.

The paper offers a systematic analysis of the impact of international or civil wars and violent non-state groups on global oil and gas supplies. Statistical evidence points to the fact that international wars are becoming increasingly rare, while civil wars remain frequent. The paper discusses the cases of the Iraq-Iran war and the Iraqi invasion of Kuwait, showing the limits to the damage that belligerents were able to inflict on oil installations and illustrating how the world was able to compensate for this damage.

This paper looks at resource nationalism and political instability as potential causes of disruption to global oil supplies. It points to depletion preferences and strategies as one form of resource nationalism. In most cases, resource nationalism appears to be motivated by rent maximisation. Hence, we see the adoption of more restrictive policies when prices rise. Conversely, when oil prices are low, increasing export volumes becomes more important. Restrictions on exports are common, especially for natural gas, which is sometimes reserved for national consumption.

As an alternative to measuring the extent of market integration, ‘home-bias’ indicates the degree to which economic agents ‘over-prefer’ to transact with domestic agents rather than agents from other EU countries. Such an exclusive preference is measured against a benchmark of (ideal) market integration and is called ‘home-bias’.

When entering a monetary union, member countries change the nature of their sovereign debt in a fundamental way, i.e. they cease to have control over the currency in which their debt is issued. As a result, financial markets can force these countries’ sovereigns into default. In this sense, the status of member countries of a monetary union is downgraded to that of an emerging economy. This makes the monetary union fragile and vulnerable to changing market sentiments. It also makes it possible that self-fulfilling multiple equilibria arise.

The recent economic and financial crises have shown the weakness of EU economic governance. A process of strengthening macroeconomic and fiscal surveillance started in the course of 2010; among other proposals, the European Commission suggested a new binding criterion of debt reduction: debt-to-GDP ratio is to be considered sufficiently diminishing if its distance with respect to the 60% of GDP reference value has reduced over the previous three years at a rate of the order of one-twentieth per year.

This paper provides evidence on past growth of productivity, analysing the evolution of labour productivity, capital deepening and multi-factor productivity. Based on a literature review of recent studies, it shows that economic growth is increasingly attributable to the accumulation of intangible capital and that consequently, an increasing share of conventionally measured rise in labour productivity has, in fact, been ploughed back into the economy as intangible capital formation.

This paper presents a mixed integer, multi-period, cost-minimising model for a carbon capture, transport and storage (CCTS) network in Europe. The model incorporates endogenous decisions about carbon capture, pipeline and storage investments. The capture, flow and injection quantities are based on given costs, certificate prices, storage capacities and point source emissions. The results indicate that CCTS can theoretically contribute to the decarbonisation of Europe’s energy and industrial sectors.

The EU 2020 Agenda has taken an important step forward by setting the target for tertiary graduation rates at an ambitious 40%. This paper finds that many European countries, however, including the largest economy – Germany – will not be able to meet this target. Moreover, the crucial topic of educational quality is not even touched upon. Comparing the EU with China in total numbers, the authors find that China’s education system already produces the same number of graduates with tertiary education as the whole EU15.

This paper analyses whether the financial crisis has affected citizens’ confidence in the free market economy and whether it has triggered citizens’ demand for a free market economy with stronger state regulations. Using panel data, the paper confirms that citizens’ confidence levels in the free market economy have decreased in most of the largest economies and demand for a free market economy with stronger state regulation has increased on both sides of the Atlantic.

Trust in the European Central Bank, as measured by the standard Eurobarometer (and other) surveys has fallen to an unprecedented low – especially in the larger euro area countries. The authors find that up to the start of the financial crisis in 2008, trust in the ECB was little affected by business cycle variables such as growth and inflation. This changed radically with the recession, with trust in the ECB being correlated quite closely with growth. However, even the recovery of growth in 2009 was not sufficient to restore trust in the ECB to previous levels.