T I M E SSummer 2014

times.eui.eu Governing Europe not for the faint-hearted

Changing climate, changing markets

Is money ruining sport?

PROFILES OPINIONSPUBLICATIONS

|ntroduction

Welcome to the fifth edition of EUI Times, the quarterly electronic magazine produced by the European University Institute in Florence.In this issue’s feature section we interview Professor Brigid Laffan, Director of the Robert Schuman Centre for Advanced Studies, in the wake of the May European Parliamentary elections. We also speak with Vanessa Valero and Aleksandar Zaklan from the EUI's Climate Policy Research Unit concerning environmental regulation and the economy. In our final feature, Law Professor Petros Mavroidis and Political Science Professor Sven Steinmo weigh in on money in sports. The EUI Times Profiles feature Professor Richard Bellamy, the new Director of the Max Weber Programme for Postdoctoral Studies. We also speak to Economist Dr. Matthias Sutter about his work on the 'economics of patience.' Finally, Dr. Ludivine Broch, Max Weber Fellow, describes her historical work on French railway workers during the Second World War. The Opinion section features contributions from three distinguished EUI professors. Dr. Denny Ellerman, former director of the Florence School of Regulation's Climate Policy Unit, examines recent American efforts on climate policy. Professor Carlos Closa Montero, Director of the Global Governance Programme's (GGP) research area on European, Transnational and Global Governance, evaluates potential consequences of secession or withdrawal vis-à-vis the EU in Spain and Scotland. Finally, Professor Anna Triandafyllidou, Director of the GGP Research Strand on Cultural Pluralism at the Robert Schuman Centre for Advanced Studies advocates for greater cooperation among member states in EU asylum policy.As ever your thoughts and comments are welcome and can be sent to times@eui.euI hope you enjoy the Summer 2014 issue of EUI Times.

Stephan AlbrechtskirchingerDirector, Communications Service

T I M E S

Features

4 GOVERNING EUROPE NOT FOR THE FAINT-HEARTED RSCAS Director Brigid Laffan discusses the political landscape following the EU Parliamentary elections in May

Features

6 CHANGING CLIMATE, CHANGING MARKETS Jean Monnet Fellows Vanessa Valero and Aleksandar Zaklan suggest economic solutions to environmental problems.

Features

9 IS MONEY RUINING SPORT? A look at money in sports from a regulatory point of view

Profiles12 Faculty

BELLAMY NEW DIRECTOR OF MAX WEBER PROGRAMME Richard Bellamy

Opinions15 CLIMATE POLICY:

A FRAGILE AMERICAN PRECEDENT

Denny Ellerman

Profiles13 Faculty

THE ECONOMICS OF PATIENCE Matthias Sutter

18 Publications

Profiles14 Fellow Ordinary Workers Ludivine Broch

Opinions16 WITHDRAWAL SYMPTOMS Carlos Closa Montero

EUI TIMESSummer 2014

Director: Stephan Albrechtskirchinger Editor: Jackie GordonWriting: Mark Briggs, Nicholas BarrettWeb: Francesco Martino, Raul Pessoa, Federico GaggeroOnline: times.eui.euEmail: times@eui.eu

T I M E SSummer 2014

times.eui.eu Governing Europe not for the faint-hearted

Changing climate, changing markets

Is money ruining sport?

PROFILES OPINIONSPUBLICATIONS

on the cover: 2014 Conferring Ceremony

Summer 2014

Published in Summer 2014 by the European University Institute© European University Institute, 2014

European University InstituteBadia Fiesolana - Via dei Roccettini, 9 50014 San Domenico di Fiesole (FI) - Italy+39 055 4685266 www.eui.eutwitter: @europeanuni

Opinions17 PROMOTING SOLIDARITY AND

COOPERATION IN EU ASYLUM MANAGEMENT

Anna Triandafyllidou

4 EUI TIMES | Summer 2014

Features GOVERNING EUROPE NOT FOR THE FAINT HEARTED

Brigid Laffan is Director and Professor at the Robert Schuman Centre for Advanced Studies, and Director of the Global Governance Programme, European University Institute. The text of her State of the Union Address may be read here.

After delivering her State of the Union address, Brigid Laffan, Director the Robert Schuman Centre for Advanced Studies and the Global Governance Program, watched closely as Europe redrew the political maps with radical colours. In Britain, France, Greece and Denmark populist parties stormed to victory while the established order floundered. Meanwhile, Brussels looks set to endure weeks of negotiations between the Council and the Parliament to appoint a new president of the European Commission, testing the significance of the Spitzenkandidat. So how does Laffan analyse the new political landscape?In the parliament, Laffan expects the established par-ties to be hemmed into a “grand coalition” to keep the machine alive. “A majority in the parliament is 376 votes, the two largest parties alone will have 398 and if you add the liberals it’s 468. These are very comfortable majorities.” Laffan calls this “the only option” but is keen to stress that this is not going to be ‘business as usual’. A coalition could easily pro-vide the populist newcomers with a political and rhetorical opportunity to further juxtapose them-selves against the status quo, “It leaves all the rest of the political space to the anti-establishment euro-sceptic parties and they’re going to use this space.”Since 2009, the eurosceptics have reached new lev-els of influence in their own countries and they will all be keen to translate this into political power and move beyond the status of the protest vote. This time, according to Laffan, MEPs with domestic ambitions will be under pressure to achieve more than remon-stration at home and disruption in Brussels, “La Pen wants to appear as if she could govern France and so

whatever she does has to appear serious. Nigel Far-age wants to have seats in Westminster, whatever he does has to be serious. I don’t think they have the luxury any longer of being the exotic additions to the hemicycle.”In the meantime the EU must resolve the problem of the Spitzenkandidat and decide how best to juggle the will of the Parliament with the priorities of the European Council. Live televised debates were held throughout the campaign between the candidates representing the main groups in the European Par-liament, with the implied notion of the triumphant emissary becoming president of the European Com-mission. That would clear a path for Jean-Claude Juncker, put forward by the victorious European People’s Party and supported by Angela Merkel and

Brigid Laffan

5 EUI TIMES | Summer 2014

the German press. But some critics are describing this as a power grab by the parliamentary groups, who would need to see Juncker approved by the Eu-ropean Council before seeing him assume office. Laf-fan considers Juncker’s appointment highly unlikely, because it would represent a remarkable surrender of power by the European Council, “If they concede now they’ve conceded forever.”Major obstacles for the ‘old school federalist’ Junck-er, include the figure of David Cameron, the British Prime Minister, who has promised to reform and redefine the relationship between Britain and Brus-sels. He is strongly opposed to Juncker, who is firmly in favour of greater integration, said to represent the status-quo and unlikely to be enthusiastic about Cameron’s vision for Europe. Speaking a few hours after the election results were announced, the Brit-ish Prime Minister loudly lamented the EU as “too big, too bossy and too interfering”. French President, Francois Hollande wasn’t far behind, describing Brussels as “remote and incomprehensible.” The two leaders, each recently stunned by electoral humilia-tion at the hands of eurosceptic MEPs, will now want to be considered as opposed to any further integra-tion. The European Council has a blocking minor-ity, meaning they can keep Juncker locked out of the commission and hire someone else, if enough of

them want to do so. At the same time the European Council needs the Parliament’s approval, which cre-ates a recipe for political stalemate. According to Laf-fan, this would mean that the parliament would have to be compensated with a right wing appointment, at the head of either the Council or the Commission, if Juncker were to be rejected. Laffan knows that whoever takes the big jobs at the EU isn’t going to be able to relax, certainly not in the political climate left behind by the elections in May. The major protagonists might not have changed but the chairs in Brussels aren’t quite as comfortable as they used to be. Incumbency has become more chal-lenging than ever before, “the question is, how do you govern today in Europe without the electorate kicking you? It’s not for the faint hearted.”

“The major protagonists might not have changed but the chairs in Brussels aren’t quite as comfortable as they used to be. Incumbency has become more challenging than ever before”

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Features CHANGING CLIMATE, CHANGING MARKETS

Vanessa Valero and Aleksandar Zaklan are Jean Monnet Fellows at the Robert Schuman Centre for Advanced Studies where they are currently researching topics in environmental economics, including the EU’s Emissions Trading System.

Scientists, political leaders and some business lead-ers have named climate change as “the biggest chal-lenge we face”.Extreme weather and rising sea levels, potentially caused by climate change, pose threats to life and property. But any serious response to this phenomena is likely to change the economy. So why does an en-vironmental problem require an economic solution?Since the industrial revolution, increasingly cost ef-ficient methods of harnessing natural resources have gone hand in hand with economic growth. But we are now looking to break that link.As the US biologist E.O.Wilson put it: “destroying a rainforest for economic gain is like burning a Renais-sance painting to cook a meal.”

Tragedy of the commonsWe may put fences around our property and border guards at national boundaries but some of the planet’s resources, water and air are considered to be common property and that can make them vulnerable.This theory of the ‘Tragedy of the Commons’ was first described by Garrett Hardin. After observing farm-ers grazing their cattle on public land, he suggested that individuals acting independently and rationally in their own self-interest behave in contradiction to the group’s long term interest resulting in the deple-tion of common resources.In the case of climate change, the extensive use of fossil fuels damages the environment we live in, a

common resource. “It is essentially a problem of the commons,” says Aleksandar Zaklan, a Jean Monnet Fellow associated with the Climate Policy Research Unit (CPRU) at the EUI. The CPRU works to gather reliable statistics and analysis regarding EU climate polices to assist and enable policy makers across the continent and Zaklan has specialised environmental economics, “You have a common resource that you can’t punish people for using.”With no charge and no individual responsibility, there is no motivation to ensure its upkeep. When the effect on the atmosphere isn’t taken into account you are free to seek the most effective means of pro-ducing energy, for example, regardless of its impact on that resource.There is evidence from behavioural experiments suggesting that under certain circumstances some people will act in the common good but especially in

Vanessa Valero

7 EUI TIMES | Summer 2014

large groups such behaviour cannot be expected. Ac-cording to Zaklan, “You have way too many players for this sort of behaviour.”

Regulation timeThere is a cost to damaging the environment, but it doesn’t appear on the balance sheet, even though such activity is to the long term detriment, not only to the abuser, but to all who use the resource.“There is a clear market failure,” explains Vanessa Valero, also a Jean Monnet Fellow associated with the CPRU. “We don’t take into consideration the negative externalities.”“The free market is efficient only when there is no market failure. As soon as market failure is identified you have to regulate,” says Valero.According to Valero there are two ways to regulate emissions. “You can either regulate on price or quan-tity.” Regulating on price requires the imposition of taxes, something the European Union is barred from doing. Therefore a cap and trade system to regulate quantity was introduced in 2005.The European Union Emission Trading System places an upper limit on the amount of carbon that can be emitted in the EU. This amount is then divided up into allowances each representing an amount of carbon. Al-lowances were divvied up among member states and industries roughly in line with historic emissions levels.

Essentially permits to pollute, these can be traded between firms or saved for future use. Each year the number of allowances available decreases creating a scarcity. In 2013, for the first time, electricity com-panies had to buy their entire allowance rather than receive free permits as was the case when the scheme was first established.The plan is to reduce the amount of carbon emissions by 20 percent by 2020. Accompanying policies seek to ensure 20 per cent of the EU’s electricity comes from renewable energy and there is also a 20 per cent improvement in energy efficiency, both by 2020.The idea is spreading. US President Barack Obama recently announced plans to dramatically cut carbon pollution from power plants, and promote a cap and trade policy. The move has been hailed as the most significant step the US has taken towards tackling climate change.However, costs of reducing CO2 emissions are a defi-nite concern. Additionally, its opponents continue to doubt the scientific evidence.

The bottom line“It is natural that those who are negatively impacted by climate policy are mobilising against it,” says Zaklan.This is the natural consequence of regulation read-justing for market failure. Such policies are monetis-ing the previously negative externalities, raising the question: Who is going to foot the bill?When companies were free to pollute, society paid the cost in terms of damage to its resources. Now

Aleksandar Zaklan

“The free market is efficient only when there is no market failure. As soon as market failure is identified, you have to regulate.”

8 EUI TIMES | Summer 2014

companies are internalising that cost. It is appearing on their balance sheets as a cost of production. The price of raw materials, labour and facilities now sits alongside how much they pay for the right to pollute. However, the cost of production may be passed on to the consumers.“The big [energy] producers have less than perfect competition,” says Zaklan. “They may charge the consumer for the entire cost of regulation.”But after years of running up bills for the abuse of common, someone has to account for the damage. Either we pay now, or we pass the cost onto the next generation.

“It is hard for those coming in 20, 50, 100 years to argue with us,” says Zaklan. “We make the decisions. If we decide to put the costs on them there is nothing they can do about it.”“The question is to what extent are you trying to be fair to your grandchildren. Or to what extent are you saying I maybe don’t care so much and I just want to maximise my output, consumption, everything that I can possibly get and they can deal with it.”If we do delay, those who follow us will have a steep-er bill to pay says Valero: “It might be much more expensive in the future. The safest reply is we have to do it as soon as possible.”However little doubt remains in the scientific com-munity, such certainty is not matched in the general public. A perception has developed that we are sac-rificing definite reward now to potentially solve pos-sible problems later.“People are myopic,” states Valero. “You need a pub-lic authority that has a longer view. If the question is can the market self-regulate to take into consid-eration climate change; the answer is definitely no. Regulation is something that is needed.”Zaklan agrees and suggests such an approach is not unusual. “Most markets are regulated. The idea that the economy is totally free is a bit of a myth.”“Without regulation we will never be able to solve this problem.”

“People are myopic. You need a public authority that has a longer view. If the question is can the market self-regulate to take into consideration climate change; the answer is definitely no.”

9 EUI TIMES | Summer 2014

FeaturesBucking the trend of the global recession, the sports industry has continued to go from financial strength to strength over recent years. According to auditors PricewaterhouseCoopers, the global sports industry will generate €106bn in revenue in the period be-tween 2010 and 2015.It is increasingly easy to watch any match, in any sport, from any league wherever you are in the world either on television or online. Sports are breaking out of their traditional national markets and plough-ing new furrows, seeking new fan bases and markets.Money is pouring into the industry. Yet two of 2014’s showpiece sporting events have threatened to be over shadowed by the cost of hosting.February’s Winter Olympics in Sochi cost €38bn, three times the price of the London Olympics two years before and more than all previous Winter Olympics combined. The games were widely accused of being a vanity project by the Russian government, and suffering from large scale corruption.Meanwhile this summer’s World Cup in Brazil saw protests throughout the ‘carnival of football’ over the cost of the event and failure to deliver on planned infrastructure projects for the benefit of the country after the finals have finished.Has sport become a plaything of the super rich? Do investments raise standards, or isolate games from their traditional fan base, losing what makes them special in the process? Is money ruining sport?

Back homeThe amount of money currently in football is growing at a phenomenal rate. This year the English Premier League awarded the team who came bottom of the league 60 million pounds in prize money. The same amount awarded to last year’s winners. Last summer Real Madrid paid 100 million euros for Gareth Bale, and this year Lionel Messi signed a new contract with Barcelona reported to be worth €20m a year.Europe’s most prestigious club competition is being increasingly dominated by the super-rich. Since 2007 there has never been more than one team per year in the semi-finals of the Champions League which has never been there before.“For me Europe is like the Wild West when it comes to sports regulation,” says Petros Mavroidis who on top of his work with the Global Governance Programme at the EUI is also on UEFA’s (Union of European Foot-ball Associations) Club Financial Control Board.The National Football League, (NFL) the top Ameri-can Football league in the US is one of the most heav-ily regulated of any league in the world. Salary caps, revenue sharing, and player drafts didn’t stop the league making profits last year of €6bn. In fact it may have helped. Over the past 30 years 27 of the NFL’s 32 teams have played in the Super Bowl (the league’s final) at least once. There is genuine unpredictability

IS MONEY RUINING SPORT?

“Europe is like the Wild West when it comes to sports regulation.”

10 EUI TIMES | Summer 2014

about results each week, which keeps fans interested.In contrast the National Basketball Association was less regulated and the league became dominated by a few major teams. Between 1978 and 2011 only 8 dif-ferent teams won the championship. Games between these teams drew large television audiences, but the rest of the league lost fans and the majority of the teams were in debt. In 2010 the league adopted rev-enue sharing similar to the system used in the NFL. Market share has increased, and now the majority of teams generate a profit.

Financial fair playMoney doesn’t guarantee success, at least not imme-diately. However the gap between those who spend vast sums on players, wages, and facilities and those who do not is becoming increasingly difficult to bridge as the money involved goes up and is increas-ingly concentrated at the top.Yet at the same time many other teams in lower leagues struggle to pay their bills. In 2010 Portsmouth Football Club faced a winding up order from the UK tax office despite playing in one of the most lucrative leagues in the world – The English Premier League. The club only avoided closure by entering into admin-istration with debts estimated to be over 100 million pounds. They have since dropped to the third tier of English football. A host of Spanish football clubs have overspent and incurred large outstanding tax bills de-spite the country’s dire economic circumstances.UEFA is currently implementing a new set of Finan-cial Fair Play rules aimed at stopping, as UEFA Presi-dent Michel Platini described it “financial doping”.The idea is clubs are prevented from making huge losses in pursuit of glory, at the risk of their financial stability.However, the rules have been accused of endanger-ing competitive balance, further entrenching the di-vision between the rich and the poor clubs.“What are the rules saying? They are saying ‘don’t behave like a sugar daddy’,” says Mavroidis. “The statutory objective is clearly financial stability. It has nothing to do with competitive balance.”

“You won’t have the new kid on the block, the next Manchester City,” who received massive investment in 2008. They’ve since own the Premiership and the FA Cup and are now regarded as the one of the rich-est clubs in the world.The established elite have the infrastructure in place to generate further income through global sponsorship because of international television exposure. Clubs lower down the league don’t have such opportunities.“I think many of us are happiest when the underdog wins,” says Professor Sven Steinmo, an expert in politics and evolutionary theory. “As more and more money comes into the game that becomes less and less plausi-ble, and as more and more money comes into the game the leaders at FIFA (world football’s governing body) have fewer incentives to make the game a fair game.”There seems little doubt the vast sums invested by so called sugar daddies distort the market. But gen-eral investment can benefit sport in general, raising standards on the field and improving the experience of the viewing public off it.“There is a lot of money in sport. I don’t think it ruins it. At every level sport is practiced in the US and the quality goes up year on year,” says Mavroid-is. “Money is a means. You can use money to make sport very attractive. We just need the proper regula-tory framework within which cash injections have a happy marriage with sport.”

Petros Mavroidis

Petros Mavroidis is Joint Chair Professor in the Law Department and at the Robert Schuman Centre for Advanced Studies. He is Professor of Global and Regional Economics.

11 EUI TIMES | Summer 2014

Teetering on the edgeHowever the warnings signs of money’s corrupting influence are stark. Last year Lance Armstrong faced global revulsion when it was revealed the record holding cycling had been involved in what was called ‘the most sophisticated doping programme ever.’“Lance Armstrong didn’t ruin cycling,” states Stein-mo. “It was the amount of money involved that made it worth taking the risk. Worth being corrupted for.”Corruption in its more traditional guise is also in-creasingly encroaching on to the playing field. Italian football is still recovering from the extensive match fixing revelations that saw the country’s biggest club Juventus, relegated to the second tier and stripped of two titles for their part in the scandal.Sports such cricket, lower league football and rugby are increasingly susceptible to so called spot fixing. Spot fix-ing involves betting on the timing or quantity of minute details of a match, such as the timing of a throw in or yellow card. Vast sums of money are then bet on the event, raising suspicions of money laundering.

Sven Steinmo

As in sport so too in lifeUltimately whether you feel the amount of money in sport has a detrimental effect depends on how you view sport. If you regard its activities as the same as any other entertainment then increased investment helps to create a greater end product which will ul-timately attract more fans which in turn generates more income to even further enhance the product.With the concentration of funds at the top of the game the quality of games between those teams would improve, but the local teams are likely to be squeezed out. “There is something about having a lo-cal team and being a fan of that team, a shared local identity that I think is valuable,” says Steinmo. “It is hard to put a monetary value on that, but it is there.”Research in the social sciences continues to show equality rather than wealth is a more accurate indi-cator of happiness in societies. “We all want more money, but the correlation between GDP per capita and happiness is almost non-existent,” says Steinmo.Those places with higher levels of inequality tend to be unhappier. Similarly it is more fun to watch a match, league or tournament where more competi-tors have a chance to win, where there is an element of unpredictability about results.Ultimately the sports industry’s commodity is com-petition. Once genuine competition is lost, so is the appeal.“It is not the money that is the problem, it’s the in-equality. Inequality is ruining our society. Football and sport is just one of the places you see it happen-ing,” says Steinmo. “A tiny elite has a disproportion-ate amount of power. Sport should be the ultimate place where a talented kid who works hard should be able to make it.”“Sport should be fair, and I don’t think it is anymore.”

Sven Steinmo is Professor of Public Policy and Political Economy in the Department of Political and Social Sciences. He is currently running the large European Research Council project “Willing to Pay? Testing Institutional Theories with Experiments”.

12 EUI TIMES | Summer 2014

Profiles FacultyDirector of the Max Weber Programme for Postdoctoral Studies

Richard Bellamy is the new Di-rector of the Max Weber Pro-gramme. He joins the EUI after seven years at University College London during which time he es-tablished their Political Science Department and European Insti-tute. With his boxes of books still unpacked, he discusses what lies ahead for him and the programme over the next five years.“I was looking for a new chal-lenge,” says Bellamy. “Something different but that would also com-plement my academic interests as well as my administrative capaci-ties. I like building institutions.”Despite these ambitions, he re-mains at heart an academic. Bella-my is hoping to establish thematic groups of fellows, stimulating re-search and publications to which

Bellamy hopes to contribute. “I feel as though part of my identity is being someone who is engaged in ongoing academic research.” It is an identity that compliments the culture of the Max Weber Pro-gramme.“If you are trying to encourage people to enhance their research profiles then you should have one of your own.”Bellamy is hoping to expand the programme so that all fellows are able to stay for two years if they wish to. Currently only fellows from the Department of Econom-ics can automatically stay for long-er than one year, and only because they accept half the number of fel-lows as the other departments.This would require an increase in the programme’s funding, some-thing Bellamy hopes will come in part from the EUI’s member states. While EUI member coun-tries currently fund the Institute’s PhD researchers, the budget for fellows comes from the European Union.“The big challenge is for the mem-ber states to see funding the post doc programme as important as funding the PhD programme.”One way to meet that challenge

is to further enhance the Max Weber Programme as a mark of excellence. “It’s about developing all aspects of an academic career “ making it evident that completion of the programme is not simply a sign of a high achiever but ensur-ing employers want former Max Weber Fellows because of what the programme offers: “I want people who are looking to hire to think ‘we are getting an excel-lent researcher with an expanded skill set.’ I hope this becomes the programme that potential fellows choose above all others.”Bellamy was a PhD researcher at the EUI in the 1980s, and feels that now is a great time to return to his alma mater.“I suspect everyone who has been here leaves a little bit of them-selves in Florence.”“There is a new president, new director of the Robert Schuman Centre, it is obviously going to be a time of change and it feels good to be a part of that.”

Richard Bellamy is Director of the Max Weber Fellow Programme for Postdoctoral Studies. He is on exceptional leave from his position as Professor of Political Science at University College, London (UCL).

13 EUI TIMES | Summer 2014

Profiles FacultyThe economics of patience

Matthias Sutter joined the EUI last September as Professor of Ap-plied Economics. His work as an experimental economist explores the behaviour of children and teenagers. His latest book looks at the correlation between patience and life time achievement.“The idea is to study how human behaviour responds to incentives. That is what experimental eco-nomics is,” explains Sutter.Unlike in the animal kingdom, humans form complex societies cooperating with genetically un-related strangers. “Of course we care about our offspring, but on top of this we are able to reach lev-els where get along in cooperative, efficiency minded and sometimes even vaguely altruistic ways.”Many other experimental econo-mists use undergraduate students

as participants in their experi-ments. By using young children Sutter hopes to be able to ask fun-damental questions about human behaviour such as at what age does the foundation for coopera-tion in society emerge?Sutter’s research with children led to his new book Die Entdeckung der Geduld : Ausdauer schlägt Talent. (The Discovery of Pa-tience: Perseverance Beats Talent)In a famous experiment at Stan-ford University children were of-fered the option of one reward (such as a marshmallow) instantly, or were given the option to wait 15 minutes to receive two rewards.“Longitudinal studies have shown children who were able to be pa-tient have a higher probability of being better educated, having higher income, better health con-ditions.” The characteristic of be-ing able to delay gratification in-creases the probability of greater gratification in the long term.In his original research for the book, Sutter worked with teenag-ers and found the more impatient ones were more likely to drink, smoke and less likely to save mon-ey. “These are correlations, but can go quite far in seeing how per-

sonality traits affect life chances.”The marshmallow experiment also showed that if the experi-menter didn’t reward those who waited with additional reward the children would be unlikely to show patience next time around. “Patience depends on your per-sonal perception of the probabil-ity of future rewards.” Patience is a virtue, but not a steadfast rule to be adhered to at all costs. “In some cases it is rational not to wait.”“What this book says is that, ulti-mately, those who have patience are more likely to be successful in the long term.”Sutter’s interest in experimental economics came about from a quirk of his PhD research on vot-ing in the excessive deficit proce-dure in the European monetary fund. “I ran some analysis and my supervisor said ‘I trust you calcu-lations, but it would be interesting is to see if people actually behave like this. I ran an experiment and found it fascinating to see how people make decisions. It’s 15 years later and I still enjoy it.”

Matthias Sutter is Professor of Economics at the EUI. His research areas include Game Theory, Competition and Markets, Decision Making, Experimental Economics, Microeconomics and Competition policy and theory.

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Profiles ResearcherOrdinary Workers

Ludivine Broch is a Max Weber Fellow affiliated with the Department of History. She completed her D.Phil in 2010 at the University of Oxford, and is a specialist on Vichy France.

Ludivine Broch is a Max We-ber Fellow at the EUI. Using written and oral testimonies, of-ficial and unof-

ficial documents, national and local archives, it challenged traditional narratives of resistance and depor-tation in Nazi occupied France, and unveiled lesser known aspects of cheminot histories to give a more nuanced narrative.Why didn’t French railway workers sabotage Jewish deportation trains during the Second World War? This is the question that drove Ludivine Broch to her PhD and into her cur-rent research on the experiences of being from ethnic minorities in Vi-chy France.“This question has come on the scene in France in the last couple of decades,” says Broch. “There have been questions of complicity of railways and railway workers in the Holocaust.”From the outside it would appear an obvious thing for workers in an occupied country to attempt. Espe-cially in hindsight with the horrors of the Holocaust laid bare. In real-

ity there are more complex practical and ideological considerations.For a start sabotaging a huge 1940s locomotive is extremely difficult. If you did manage to stop the train the logistics needed to free and hide the number of people on the train also proved prohibitive.The workers also needed the func-tioning railway for their livelihoods, and, according to Broch, had the re-construction of post-war France in their minds, again, for which they would need the railways.Broch’s work developed to explore the relationships between the work-ers, Vichy, the state, the Germans, German railway workers and them-selves.This work has been turned into the book Ordinary workers: French rail-waymen, Vichy and the Holocaust due out next year in French and English.Broch’s next project seeks to greater understand what life was like as part of other ethnic minorities at a time of great racial hatred across Europe.France in the 40s and 50s is widely regarded as a welcoming Repub-lic where assimilation is encour-aged. However Broch’s research is revealing black immigrants from

the French colonies where both ac-cepted and kept on the periphery of society.“The idea of France during the Sec-ond World War contrasts with the racism of Germany and US, but ac-tually if you look underneath, at rail-way workers for example, it was very xenophobic.”Many of the laws enforced by the Nazis against Jews in occupied France were also used against the black minority. They were forced to ride in the last carriage of trains; were barred from certain jobs and couldn’t cross the Demarcation line between the Occupied North and the Free Zone.Despite her research focusing on an extreme period in terms of race rela-tions, Broch sees relevance between her work and today.“I think these questions about assim-ilation and integration in a republic and its limits continue to be relevant today, especially in France.”“In Britain and France there is still an obsession with the Second World War and in that case my work is ex-tremely relevant to public history, memory studies, and commemora-tions.”

15 EUI TIMES | Summer 2014

Opinions

In early June, the Obama Ad-ministrat ion issued its long awaited ‘Exist-ing Power Plant

Rule’ to address climate change by reducing CO2 emissions from exist-ing power plants by 30% by 2030 (as measured from 2005) to kudos from most environmentalists and foreign observers but promises of opposi-tion from important players in the US political process. The proposal is bold in its assertion of regula-tory authority, but it also provides extraordinary flexibility to states in achieving differing, mandatory car-bon intensity limits set by the feder-al authority. These intensity targets are established by simulating rea-sonable improvements in coal plant efficiency, increased use of existing natural-gas-fired generating capac-ity, and modest increases in renew-able energy generation and demand side management. While the mod-eling underlying these targets pre-sumably reflects an implicit carbon price, states have complete flexibil-ity in deciding how they will achieve their targets. Moreover, the intensity target can be converted into a mass-based limit to enable the adoption of

a cap-and-trade program or joining existing programs in the Northeast-ern states or California.The timeline for implementation is ambitious. After receiving public comment, the final rule is to be issued in June 2015 so that states can submit their implementation plans by June 2016 for review and approval by the still incumbent Obama Administration. In the best of all worlds, everything would be in place by January 2017 when a new Administration will take over; however, this is highly improbable. In fact, the proposed rule itself allows for requests from the states for a one or two-year delay in the submission of their implementation plans.While well thought-out and a considerable achievement, the rule has many hurdles to clear. They are time and the always present, fundamental legal and political issues concerning the limits of administrative discretion and executive prerogative under the U.S. Constitution. The legal issue concerns the limits of administrative discretion: How much latitude does the Administrator of the U.S. Environmental Protection Agency have in interpreting legislative

authority…in this case the now nearly 50-year-old Clean Air Act and a heretofore unused and therefore judicially untested section of the law. Recently, the Supreme Court has tended to uphold the EPA’s exercise of its discretion, but not always and, in a recent case, the court explicitly cautioned against too wide-ranging an interpretation.The political problem is closely related and the same one that the President is using to promulgate the rule: executive prerogative. In general, the Obama Administration has taken the stance that if Congress will not (or cannot) act, the executive branch is justified in acting alone to promote the public interest. The problem is that if the political vicissitudes return the Republicans to the White House in 2016, the same argument and precedent will allow for greater prerogative and discretion in hobbling if not disabling the rule. Several years will be required to resolve these issues.

CLIMATE POLICY: A FRAGILE AMERICAN PRECEDENT

Denny Ellermann was formerly a Senior Lecturer at MIT’s Sloan School of Management, and for many years executive director of the Center for Energy and Environmental Policy Research and the Joint Program on the Science and Policy of Global Change. He has also been a part time professor at the EUI and director of the Florence School of Regulation’s Climate Policy Research Unit, from which he recently retired.

16 EUI TIMES | Summer 2014

Opinions

WITHDRAWAL SYMPTOMS

Secession and withdrawal have become highly topical Euro-pean issues due to the processes

under way in Scotland and Catalo-nia and the debate triggered by UK´s Prime Minister David Cameron, suggesting a possible British with-drawal from the EU. These debates concentrate on the position of with-drawing states and seceding territo-ries vis-à-vis the EU.In parallel to their support for inde-pendence, supporters of secession in both Catalonia and Scotland reiter-ated their commitment to remain within the EU. Some argue that this should happen naturally with-out having to go through accession negotiations, as mandated for new members by article 49 of the Lis-bon Treaty of the European Union. However, new independent territo-ries cannot claim an automatic right to membership, although they may construct a strong moral claim to it. The emerging consensus among scholars is that seceding territories will become non-members and will have to renegotiate their relationship with the EU. An alternative would be to negotiate the accommodation of these new territories via treaty re-form (i.e. article 48). This represents

an heterodox way to deal with the inclusion of a new state (meaning inter alia, its share in EU institutions and bodies) which depends, first and foremost, on the political good will of the 28 members and, not least, the succeeding state. In other words, it is difficult to imagine that an EU reform created for the sake of ac-commodating a seceding state can be activated without the consent of the succeeding state: in purely for-mal terms, the seceding territory cannot be a party to reform negotia-tions. This ‘good will’ requisite places seceding territories in different start-ing positions, depending on whether the secession initiative is consensual or unilateral.Two other obstacles add difficulties to the path of an internal treaty re-form. First, the reform agenda may not be dictated exclusively by the withdrawing state: there may be pay-offs to negotiate and compensation to award to the members of the EU club (as happened during negotia-tion of past treaties on enlargement). Second, reform (as accession) has to be unanimously approved by all EU member states. In some cases, this may imply referendums and the risk of a failure during ratification cannot be ruled out.EU provisions on withdrawal cre-ate a similarly weak position for the

retiring state. Withdrawal is truly an unconditional, unilateral right. However, once exercised, the with-drawing state is left on its own: it may remain a member for a two-year period and negotiate its future relationship with the Union. But if no agreement is reached, nothing will oblige the EU to grant a with-drawing state a privileged relation-ship and the “moral” case for right to membership is also fairly weak. The withdrawing state cannot exercise a veto and EU member states may be tempted to extract large concessions in return for, say, a free trade agree-ment. These scenarios suggest that withdrawal, rather than offering a real option for independent mem-bership, puts withdrawing states in a worse position than before for rene-gotiating their relationship with the EU. This is the real game. Whether it will pay off remains to be seen (and discussed in a future piece).

Carlos Closa Montero is the Director of the Research Area European, Transnational and Global Governance at the Global Governance Programme.

17 EUI TIMES | Summer 2014

Opinions

Asylum is a common con-cern for both Northern and Southern Euro-pean countries.

Southern countries are exposed to pressures at their borders because of their geographical proximity to zones of instability and conflict. Meanwhile, Northern European countries have traditionally been the preferred des-tinations of asylum seekers from all over the world. Thus both groups of countries have a common concern to share this burden, and to look at the problem from different perspectives:Southern European countries simulta-neously face the pressure of irregular migration and asylum seeking and have to find ways to effectively filter applications. This pressure however, leads countries like Greece to use de-tention as a standard measure with the goal of deterring people from crossing the country’s borders (regardless of whether they are irregular migrants or asylum seekers), holding people in ap-palling detention conditions without respect for their fundamental rights, thus seeking to pressurise the Euro-pean Union to take responsibility.Northern European countries are better ‘protected’ from irregular mi-gration because of their geographical position and hence face mostly the problem of properly processing ap-

plications rather than that of filtering them at their borders. During the first quarter of 2014, asylum applications in the EU rose by 30% (compared with the same period in 2013). Germany accounts for more than 60% of this increase while Sweden is the country with the highest number of asylum ap-plicants per million inhabitants.Italy has stood out recently for its policy on the matter: Operation Mare Nostrum, costing over €10 mil-lion per month, has saved the lives of tens of thousands of people traveling from the Middle East, Africa and Asia crossing the Mediterranean in search of protection or better job prospects. At the same time, during the first three months of 2014 Italy has registered the second highest increase in asylum ap-plications within the EU (compared to the same period in 2013).There is an important gap though in the asylum acquis: while rejections are valid throughout the EU (the asylum seeker cannot apply again in another country), positive decisions do not provide for an EU status. There is no obligation for member states to rec-ognize positive decisions by another member state.It is crucial therefore to promote (through the European Asylum Sup-port Office work) cooperation with the southern member states that facing the pressures of mixed migration and asylum flows, whereby experts form

other member states work together with national forces to sort and pro-cess asylum applications. Such joint operations can lead not only to better and faster processing but also build trust among member states and thus pave the way for mutual recognition of positive asylum decisions. In addition, creating a common EU status of refu-gee or person benefiting of subsidiary protection is necessary so that asylum seekers processed and recognised in one country may move freely within the EU and, if they wish to do so, relo-cate to another member state.Mutual recognition of positive deci-sions would be the necessary incentive and ‘reward’ for southern European countries to put more effort and re-sources to improving their asylum systems. At the same time, it would ensure a proper implementation of Dublin III and hence avoid the sce-nario whereby some member states in northern Europe have to temporarily interrupt the Dublin III provisions (i.e. interrupting the so called “Dublin re-turns” to a southern country) because of the inhumane and degrading treat-ment suffered by migrants in parts of Southern Europe. This would allow both groups of member states to feel that their needs were being listened to and addressed by the European asy-lum regime.

Anna Triandafyllidou is Director of the GGP Research Strand on Cultural Pluralism at the Robert Schuman Centre for Advanced Studies (RSCAS). She is also the Scientific Coordinator of the Accept Pluralism project, which looks into the concept, policies and practices of non-tolerance, tolerance and acceptance of cultural and religious diversity in 15 European countries.

PROMOTING MEMBER STATE SOLIDARITY AND COOPERATION IN THE MANAGEMENT OF ASYLUM

18 EUI TIMES | Summer 2014

Publications

Populism and Crisis Politics in Greece Takis PappasPalgrave, 2014

Over the course of 2011 and 2012, Athens became the flaming jewel in the crown of the Eurozone sovereign debt crisis. A climate of punitive austerity measures and near daily rioting brought the systematically dys-functional nature of Greek politics to the world’s atten-tion. The country had run a budget deficit every single year since 1973 and the toxic debt to GDP ratio that has existed ever since was hardly even addressed until the outbreak of the recent global financial crisis. How could democratically accountable leaders fail to address the country’s unsustainable finances year after year and decade after decade until it was all too late?Professor Takis S. Pappas points the finger squarely at populism. In his new book Populism and Crisis Poli-tics in Greece, Pappas charts the historic proliferation of irresponsible spending commitments following the fall of the military junta in 1974 and the transition to democracy that followed.According to Pappas, the emergence of two high-spending populist parties, each taking turns in power, created and maintained an uncontrollable precedent of excess. And because each party was able to effectively satisfy its own political constituency with more spend-

ing, there was nobody left with an incentive to speak out. In an interview with EUI Times, Pappas explains that “The state, far from being an impartial promoter of public welfare, became a resource to be appropriated by individuals eager to enhance their own private well-being. Yet, because of the alternation in power of the major parties, the system was anything but a zero-sum game. In reality, all members of society gained when it was their turn.”This, says Pappas, is how the party managed to roll on uninterrupted for decades before the titanic hangover of 2012. One might be forgiven for wondering if Pappas is lamenting the lack of a Thatcherite/Reaganite figure to reign in a culture of big government, but that is far from the picture being painted here. For Pappas, Greek spending was usually closer to bribery than it was to so-cialism and represents a stark warning that “when voter behaviour is motivated by populist (illiberal) values, systematic prejudices, and the pursuit of short-term self-interests at the expense of the public good, society is eventually left worse off – and prone to crisis.”With populist parties now gaining ground across the continent, Professor Pappas could become a vital and controversial authority regarding the future of Euro-pean democracy.

Takis S. Pappas is associate professor of comparative politics in the Department of Balkan, Slavic & Oriental Studies of the University of Macedonia, Greece, and, currently, a Visiting Fellow at the Department of Political and Social Sciences of the EUI.

19 EUI TIMES | Summer 2014

PublicationsALCALDE FERNÁNDEZ, Ángel. Los excombatientes franquistas: la cultura de guerra del fascismo español y la Del-egación Nacional de Excombatientes (1936-1965) (Pren-sas Universitarias, Zaragoza, 2014)

BELLAMY, Rich-ard. Croce, Gram-sci, Bobbio and the Italian political tradition (ECPR Press, 2014)

FERRARA, Pas-quale. La politica inframondiale: le relazioni inter-nazionali nell’era post-globale (Citta Nuova Editrice, 2014)

RUBIO MARIN, Ruth (ed.) Human rights and immigration (Oxford University Press, 2014, Collected courses of the Academy of European Law ; Vol. XXI/2)

ARAJÄRVI, Noora Johanna. The changing nature of custom-ary international law (Routledge, 2014)

CLARKE, Lisa. Public-private partnerships and responsibility under international law : a global health perspective (Rout-ledge, 2014)

HOEKMAN, Bernard M. Supply chains, mega-regionals and multilateralism: a road map for the WTO (CEPR Press, 2014)

STOECKL, Kristina. The Russian Orthodox Church and Human Rights (Routledge, 2014)

BARDI, Luciano; KRIESI, Hans-peter; TRECHSEL Alexander H. (eds) Elections in Europe in times of crisis: contributions from the 2013 EUDO dissemination conference (EUI, 2014)

DI BARTOLOMEO, Anna; MAKA-RYAN, Shushanik; WEINAR, Agnieszk a (eds). Regional migration report : Russia and Central Asia (EUI/RSCAS Migration Policy Centre; CARIM-East, 2014)

MICKLITZ, Hans-Wolfgang (ed.) Constitutionaliza-tion of European private law (Oxford University Press, 2014, Collected Courses of the Academy of Euro-pean Law, XXII/2)

ZERVAKI, Antonia. Resetting the political culture agenda: from Polis to international organisation (Springer, 2014)

ELECTIONS IN EUROPE IN TIMES OF CRISIS Contributions from the2013 EUDO DISSEMINATION CONFERENCE

Edited by LUCIANO BARDI, HANSPETER KRIESI & ALEXANDER H. TRECHSEL

SELECTEDEUI BOOKS

cadmus.eui.eu

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ISSN: 1977-799X