Gros, D. (2014) “A European sanctions compensation fund?“, Economic Policy, CEPS Commentaries, 12 August.
Daniel Gros explores in a new CEPS Commentary the feasibility of creating a common fund to provide compensation for the economic costs of sanctions as an integral part of the EU’s foreign-policy stance that is now emerging towards Russia, albeit slowly and painfully.
Τhe EU has now finally agreed to impose ‘third-level sanctions’ against Russia. As usual, it has been a long and difficult process to arrive at this point. A key problem all along has been that sanctions serve a common purpose, but the costs of implementing them are borne by individual member states. Moreover, the costs are very concrete and visible, as jobs in certain enterprises with exports to Russia seem to be at stake. A common fund to provide compensation for the economic costs of sanctions would provide a highly visible token of solidarity and should be an integral part of the common foreign policy stance that is now emerging towards Russia, albeit slowly and painfully. It is thus not surprising that many member states were more concerned with the potential cost of the sanctions on their own economy than the overall foreign policy goal of sending a clear signal to Russia that its disregard of international norms would have consequences.
Relevant posts:
- Veugelers, R. (2014) “Is Europe saving away its future? European public funding for research in the era of fiscal consolidation“, VoxEU Organisation, 28 August.
- Huertas, T. & Nieto, J. M. (2014) “How Much is Enough? The Case of the Resolution Fund in Europe“, Vox: Research-Based Policy Analysis & Commentary from Leading Economists, 18 March.
- Delbecque, B., (2013), “Proposal for a Stabilisation Fund for the EMU”, Centre for European Policy Studies, Working Paper No.385, 14 October.