Economic Policy

Research Team


Ever since central banks around the globe have embarked upon a course of unconventional monetary policy in response to the financial crisis, the Economic Policy unit has closely analysed monetary policy developments  - especially that of the European Central Bank. This unit regularly produces commentaries on the latest ECB programmes and its potential impact on the real economy. Quantitative Easing currently lies at the heart of this research.

The second research pillar entails economic and social welfare policies which are mostly a national competence within the EU. This field of research is thus largely concerned with issues such as fiscal policy, ageing, education and labour market reforms – not strictly within the domain of the EU’s competences. However, since member countries often face very similar problems, it has proved useful to analyse these issues from a comparative, European and global perspective. The unit has been active in these fields for several years, in particular through its European Network of Economic Policy Research Institutes (

Fiscal policy also remains a national prerogative in general, but is subject to the Stability and Growth Pact. Research on fiscal policy, especially on longer-term sustainability within a monetary union, is thus also an important part of the remit of this unit. This area of work tends to come in waves: periods of economic difficulty usually lead to large deficits, which in turn raise the issue of sustainability and the application of the Stability and Growth Pact.


Given the unprecedented economic and financial crisis of 2007-08 and the subsequent European debt crisis, the full consequences of which are still not fathomable, the focus of the unit will continue to be on monetary and macroeconomic policies throughout 2015. The unit will once more provide a regular analysis of the key macroeconomic policy issues facing the EU through its Macroeconomic Policy Group reports (otherwise known as ‘ECB Watchers’), and will also continue to look at the macroeconomic implications of the state of financial and banking markets, in close cooperation with our colleagues from the financial markets unit who follow the regulation of finance in general.

Since 2008, CEPS has been responsible for the management of an important part of the content of Intereconomics. We aim to make Intereconomics the leading forum for research-based discussion about major European economic policy issues and enhance its already respectable readership and recognition in the field.


FIRSTRUN Fiscal Rules and Strategies under Externalities and Uncertainties

The FIRSTRUN project advances the theoretical and practical debates on the effective mechanisms of fiscal policy coordination. It analyzes the very reason why fiscal policy coordination may be needed in the first place, namely cross-country externalities (spillovers) related to national fiscal policies. Specifically, it identifies different types of spillover effects, investigates how they work in the EU and in the EMU, and analyses whether they work in the same fashion under different states of the economy and over the short and the long run. The project describes different forms that fiscal policy coordination can take in practice, e.g. ex-ante coordination and risk-sharing, and provides a critical assessment of the mechanisms already put in place. The FIRSTRUN project provides new tools for fiscal policy design by incorporating the new EU fiscal rules regarding e.g. government debt and deficit into applied models for fiscal policy evaluation. The tools can be used to support the decision makers in the implementation of the enhanced EU economic governance. FIRSTRUN also investigates the political economy of fiscal cooperation, for instance, the difficult inter-play between domestic political pressures and EU level priorities as well concerns about legitimation. By shedding light on the character of the governance framework for fiscal coordination, FIRSTRUN will highlight the features that work well or badly and provide insights that the EU level can exploit in its surveillance and advisory roles.

EUBS Feasibility and Added Value of a European Unemployment Benefit Scheme

The rise of unemployment in Europe (particularly southern Europe) has dramatically affected the lives of millions of European citizens and questioned the strength of the European Monetary Union. To minimise the risk of similar crises occurring in the future, economists are proposing Europe-wide (or euro area-wide) counter-cyclical policies that would act as a financial resources buffer to help those countries facing severe economic downturn. One way to do this is by creating a European Unemployment Benefit Scheme (EUBS). The operational details of such a scheme clearly require careful consideration, but the idea has attractive features: the EUBS would act as a counter-cyclical fund that goes directly to help households that are hardest hit by the recession. This study will cover a large number (18) of possible EUBS, which differ from each other on a number of dimensions, such as how claims are paid out to member states or the time over which the net contribution of each state must balance out.

NEUJOBS  Employment 2025: How multiple transitions will affect the European labour market

Since the spring of 2011, the CEPS Macroeconomic Policy Unit has been coordinating NEUJOBS, a major research project financed by the European Commission under the 7th Framework Programme. The project consists of 29 partners and 23 WPs. NEUJOBS objective is to analyse likely future developments in the European labour market(s), in view of four major transitions that will impact employment and European societies in general. What are these transitions? The first is the socio-ecological transition: a comprehensive change in the patterns of social organisation and culture, production and consumption that will drive humanity beyond the current industrial model towards a more sustainable future. The second is the societal transition produced by the combination of population ageing, low fertility rates, changing family structures, urbanisation and growing female employment. The third transition concerns new territorial dynamics and the balance between agglomeration and dispersion forces. The fourth is a skills (upgrading) transition and we are interested in its likely consequences for employment and (in) equality. The project combines EU-wide studies based on existing datasets with national comparative research dealing with one country from each welfare typology. The output is based on a mix of quantitative and qualitative analysis and foresight activities. Special attention is given to policy-making.

ANCIEN Assessing Needs of Care in European Nations

Launched in January 2009, ANCIEN is a research project financed under the 7th EU Research Framework Programme. It runs for a 44-month period and involves 20 partners from EU member states. The project principally concerns the future of long-term care (LTC) for the elderly in Europe and addresses two questions in particular:
1) How will need, demand, supply and use of LTC develop?
2) How do different systems of LTC perform?

The project proceeds in consecutive steps of collecting and analysing information and projecting future scenarios on long term care needs, use, quality assurance and system performance. State-of-the-art demographic, epidemiologic and econometric modelling is used to interpret and project needs, supply and use of long-term care over future time periods for different LTC systems.

BEL-DEBT On the sustainability of public finances in Belgium

Since the onset of the sovereign debt crisis in Europe in early 2010, developments in the public debt of Eurozone countries have been closely followed by financial markets. Belgium, one of the countries in Europe with the highest level of debt relative to GDP, has not been an exception. Even though Belgium managed to stay more or less off the radar screen of international investors thanks to its economic performance, the ongoing political crisis and the uncertainty surrounding the potential effects of future reforms have attracted, more recently, the attention of market participants as spreads on government bonds have been widening. This pushed the question of debt sustainability to the top of the agenda of Belgium’s policy-makers.

INDICSER Indicators for Evaluating International Performance in Service Sectors

The objective of the INDICSER (FP7-) project is to develop indicators which provide information on the performance of service sectors in the EU. At the heart of the project are concerns that such indicators should be valid in terms of concepts, measurement methods and feasibility but should also have value in terms of their usefulness for policy. Therefore the approach adopted is to include both an EU-wide application of existing concepts and develop and experiment with new concepts. This will be carried out within an overall coherent structural framework designed to address the key issues of productivity and value for money. /

SERVICEGAP The Impact of Service Sector Innovation and Internationalisation on Growth and Productivity

In the past decade the performance of service industries has come to the forefront of research on Europe's comparative economic performance, especially as the benefits from the use of information and communications technology (ICT) have been concentrated in these industries. The SERVICEGAP project will consider the academic and policy concerns that arise from the increasing importance of the market service sector. It will consider developments in productivity and its drivers within market services, linkages between services and manufacturing industries, innovation in delivery and the increasing internationalisation of services. The overall objective of this research is to produce a comprehensive study on the impact of market services on aggregate economic growth in the EU and its comparative performance relative to competitor regions, especially the US.