Recent publications from Istituto Affari Internazionali (IAI) – Winter 2015/16

IAI50

The International Spectator, Special issue IAI 50th Anniversary, Vol. 50, No. 4, December 2015

Exploring some of the most talked about topics in the last 50 years, our most well-known authors take a look back with new articles and perspectives … Cutting across the wide range of subjects on which the journal focuses, the articles in this special 50th anniversary issue have been chosen to illustrate the breadth of the journal’s analysis and the extent of the changes that have taken place in the last fifty years. The authors are all internationally recognized. The intention is to highlight what The International Spectator is about, what it has achieved and how it has traced and analysed academic and policy developments in its fields of interest. While continuing in this endeavour, the journal is broadening its horizons beyond its traditional interests (European integration, political economic policy, transatlantic relations, and such specific geographic areas as the Middle East, Balkans and North Africa). In fact it is increasingly focusing on issues on the current and future political agendas (Asia, climate, energy, and migration) so as to provide scholars and practitioners with a working tool in the field of international affairs, foster debate in opinion – and decision-making circles and make Italy’s voice heard internationally.

Democracy and Legitimacy in the EU: Challenges and Options, by John Erik Fossum (IAI Working Papers 16|01) January 2016, 18 p.

 It is widely held that the EU suffers from a democratic deficit, but there is no agreement on the specific nature of this deficit. In this paper, I start by specifying the nature of the democratic-legitimacy problem facing the multilevel EU. Two dimensions, the institutional-constitutional, and the socio-cultural, are highlighted. Next, I discuss how the context of crisis has transformed the EU. The many crises and their handling have not only exacerbated but to a considerable degree also altered the democratic-legitimacy problems facing the EU. In order to best capture these changes, it is useful to apply several possible democratic decision-making configurations. These are presented and assessed in terms of how well they capture the present challenges facing the EU. In the last part I discuss specific reform options and what they may imply for the Union’s democratic deficit.

Defence Budgets and Cooperation in Europe, Developments, Trends and drivers, by Alessandro Marrone, Olivier de France, Daniele Fattibene (eds.), January 2016, 41 p.

The security landscape in and around Europe since 2014 has experienced significant changes. As a result, in the 31 European countries considered by this study defence spending will grow by an estimated average of 8.3 per cent in 2016, compared to 2015. This represents a break with the structural trends experienced in previous years. Yet, increased defence budgets are no guarantee that the countries will spend their money better or with more intra-European cooperation than before 2015. The whole landscape of defence cooperation in Europe is particularly diversified and fragmented. The study analyses six trends which mark current cooperative patterns, for example in relation to bilateralism, regionalism, as well as the role of Germany and the United States. Finally, it discusses five driving factors, including Russia’s aggressive posture and non-conventional threats, which are likely to shape the European defence cooperation landscape in the short-medium term. Study produced in the framework of the project “Permanent Monitoring and Analysis of military capabilities and defence sector trends”, managed by a consortium of European think tanks and funded by the European Defence Agency (EDA).

Federalising the Eurozone: Towards a True European Budget, by Eulalia Rubio (IAI Working Papers 15|50) December 2015, 21 p.

Discussions about a future fiscal capacity for the euro area are too often limited to a comparison of the technical advantages and disadvantages of different modalities of cross-country fiscal shock absorbers. This paper aims to broaden the debate, by connecting these discussions with debates on fiscal union and the exercise of political power in EMU. Through an analysis of past and current debates on EMU, the paper identifies five different rationales for deepening budgetary integration in a monetary union: ensuring fiscal discipline and stable sovereign debt markets, protecting euro area countries against the risk of asymmetric shocks, equipping the euro area with a capacity to stabilise the economy over the cycle, providing budgetary support for convergence and providing an appropriate fiscal backstop for the banking union. The paper discusses the relevance of these various rationales in today’s EMU and their different implications as regards to mutualising budgetary resources and powers.

Towards European Electoral and Party Systems, by Enrico Calossi (IAI Working Papers 15|47) December 2015, 20 p.

 Although much progress has been achieved in the last sixty years, the European Union still lacks a unique electoral system and a proper party system. Recently some changes have been proposed or introduced in order to homogenise the national electoral systems of the EP and to strengthen political parties at the EU level. Andrew Duff’s proposal for a transnational party list; the establishment of European political foundations in 2007; the updating of the Statute of the European political parties in 2014; the designation of the Spitzekandidaten by Europarties were all useful attempts. More could be done. National democracies can become sources of inspiration for new proposals. Some suggestions may require new formal regulations. Others are more informal or political, and would give political actors new opportunities on voluntary bases.

Financing SMEs in Europe: Stylised Facts, Policies, Challenges, by Daniele Ciani, Paolo Finaldi Russo, Valeria Vacca, (IAI Working paper 15|46) November 2015, 30 p.

 This paper describes the main features of European SMEs’ financial behaviour and the policies recently put in place to support their funding. European SMEs are structurally more leveraged and charged with higher interest rates than large firms. Moreover, the crisis has deeply affected their fund-raising capacity, as banks reduced credit supply while non-bank funding was unavailable to most SMEs. Against this background, EU has focussed its policies on long-term investment and on a more favourable environment for SMEs financing, including through the launch of the Capital Markets Union. At the national level, most governments have provided guarantees and enhanced the role of national development banks. Nevertheless, key issues are still outstanding, such as the funding of innovative firms and the improvement of transparency and of the legal and regulatory frameworks. Background document for the ASEM seminar on “Financing SMEs in Asia and Europe”, held in Rome on 29-30 October 2015.

Italy and the Renegotiation of the UK’s EU Membership, by Ricardo Alcaro (IAI Working paper 15|45) November 2015, 9 p.

British Prime Minister David Cameron has pledged to campaign for the UK to stay in the EU in the incoming in-or-out referendum on the UK’s EU membership, but only if London succeeds in recalibrating its relationship with the Union. As the EU’s fourth largest country, Italy will play a crucial role in the negotiation. The challenge for Rome is to balance its long-standing commitment to strengthening European integration with the interest in keeping a country the size and influence of the UK in the EU. Matteo Renzi’s government should be supportive of British proposals about competitiveness, pragmatic as far as sovereignty issues are concerned, constructive but cautious regarding economic governance, and understanding of British concerns but also firm about immigration.

Building on the Past, Facing the Future. Italian and European Responsibilities in World Affairs, by Gianni Bonvicini and Stefano Silvestri (eds.), November 2015, 36 p.

It seemed appropriate, for a think tank like the Istituto Affari Internazionali (IAI), to celebrate the 50th anniversary of its foundation by writing a reflection paper that looks to the future. So we gave some of our researchers the task of proposing brief critical analyses on four fields of research in which the Institute has traditionally invested its resources: the European Union, transatlantic relations, the Mediterranean and Italy’s role in Europe and the world. We intend in this way to contribute to best effect to the dissemination of a truly internationalist culture in our country. A mission which the IAI has sought to develop with constancy and determination in its first 50 years and which it intends to take forward and build upon in the future. Report prepared for the international conference organised on occasion of the 50° anniversary of IAI, Rome, 13-14 November 2015.