Recommendations for Europe

Chapter 2 The European Energy Conundrum: Power Failure / Formulate an effective bargaining strategy to ensure a global reduction in CO2 emissions / Establish a European energy union with a single market that does not discriminate against suppliers from other countries. / Eliminate fixed feed-in tariffs as incompatible with a Europe-wide energy strategy / Commit to price flexibility in energy markets following the logic of unbundling, which means separating suppliers from energy producers and delivery systems (pipelines, grids)./ Provide public investment in the enhanced connectivity of energy networks like gas pipelines and power transmission lines. Chapter 3 European Regional Disparity: Borders Strike Back / Coordinate policy reforms across euro area countries. / Countries in which the crisis has permanently changed the growth outlook need to accept some degree of fiscal austerity and embrace downward wage flexibility. / Periphery countries should make their labour markets more flexible. / The fiscal policy framework in the periphery countries should be strengthened to lend more credibility to the fiscal programs. Chapter 4 Banking Union: Who should take charge? / The ECB’s Comprehensive Assessment of Financial Institutions needs to be as rigorous and transparent in reality as claims suggest it will be. / Clarification of who will pay for the legacy problems revealed by the Comprehensive Assessment is essential. / The list of creditors exempt from bailing-in should be kept short.