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The European Economy Research Letter provides information on current research projects of staff or visiting fellows of DG ECFIN. It appears three times a year.

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The 4th DG ECFIN Annual Research Conference (ARC)1 was held on 11-12 October in Brussels, with over 100 participants from all over Europe. The theme was "Growth and income distribution in an integrated Europe: Does EMU make a difference?", inspired by growing concern about inequality in Europe. There appears to be a growing perception, not only in Europe but also – indeed perhaps even more so – in the US, that prosperity has been fairly unevenly distributed, resulting in a widening gap between rich and poor and a squeezing of the middle classes. This concern was addressed in four sessions followed by a panel discussion. 1. The economics of distribution and growth. Recent issues and experience. 2. Distribution and growth in Europe – The empirical evidence. 3. Does the euro make

a difference? And 4. Is Europe different? (economic integration, globalisation and distribution).

Matching efficiency and social equality In his opening remarks Commissioner Joaquín Almunia emphasised the role of EMU as a policy framework for growth and social cohesion. "By implementing the structural reforms of the Lisbon Strategy, the EU is already seeking ways to match economic efficiency with social equality", he said. But a rapidly changing economic landscape creates a need for some adaptation of instruments designed 50 years ago, he added. His call for "new approaches (are) needed to ensure that individuals are equipped for gainful employment in the knowledge economy, that the proceeds from higher growth are fairly shared and that new inequalities are properly addressed" created a challenge for researchers at this year's ARC and provided a background for intense discussions.

Contents 1. 4th Annual Research Conference - Growth and income

distribution in an integrated Europe 1

2. Spain: a story of rapid convergence and high imbalances 5

3. The impact of a carbon constraint on energy intensive industries 8

4. LABREF: Labour Market Reforms Database 10

5. Volume and geography of remittances from the EU 12

6. Interview with Gaëtan Nicodème: Winner of the 2007 Peggy and Richard Musgrave Prize 13

7. Recent external academic publications by ECFIN staff 14

8. Recent Economic and Occasional papers 14

9. Visiting Fellows and Economic Seminars 15

10. Scheduled Events - Workshops 16

European Economy Research Letter

Volume 1, Issue 3 November 2007

4th Annual Research Conference – Growth and income distribution in an integrated Europe

1 Conference papers are available on the DG ECFIN website:http://ec.europa.eu/economy_finance/events/2007/events_brussels_1110_en.htm. Papers will be published as an European Economy Economic Paper.

Summary of Research Projects of 16

Volume 1, Issue 2 European Economy Research Letter Volume 1, Issue 3

Rising inequality: not trends but episodes While a lot of evidence was presented for differences in measured inequality across countries and over the time, there was no clear support for the popular view that inequality has been sharply increasing in continental Europe. According to Thomas Harjes (IMF) it has increased only moderately or, in some cases, even declined ("Globalization and income inequality. A European perspective"). Looking at long-term developments in the distribution of personal income, Anthony Atkinson (Nuffield College) said in his keynote address ("Distribution and growth in Europe – The empirical picture"): “The variety of experience points to the need for a variety of explanations. The distribution of personal income is a subtle combination of different mechanisms, each subject to exogenous and endogenous forces.” In addition, as was emphasised many times during the conference, inequality is by no means a simple phenomenon to measure or characterise, as single indicators like the widely used Gini coefficient and datasets are often inconsistent, making international comparisons more difficult. Against this background Atkinson found it misleading to talk of “trends” when describing the evolution of income inequality, but preferred thinking in terms of “episodes” when inequality rose or fell.

Public policies were found to matter for the income distribution and, as argued by Antonio Afonso (Technical University of Lisbon and ECB), Ludger Schuknecht (ECB) and Vito Tanzi (Inter-American Development Bank), there is still considerable scope for improvements in the efficiency of public spending ("Income distribution determinants and public spending efficiency"). As efficient social public spending, education performance and strong institutions are strongly correlated and higher per capita incomes are associated with more generous public spending, all EU countries could enhance their human-capital equality through better designed public spending. This would also make redistribution policies more affordable and politically sustainable.

Daniel Waldenström (Research Institute of Industrial Economics, Stockholm) noted that the reduction in progressive taxation at the top of the distribution seems to have had a negative effect on equality on a panel of 16 developed countries ("Finance, trade and top incomes: Evidence from the twentieth century" co-authored by J. Roine and J. Vlachos). The size of this effect is,

however, fairly small, suggesting that taxation is relatively ineffective at reducing inequality by lowering the income shares of the top income earners. He concluded that economic growth and financial development seem to have been pro-rich over the twentieth century.

Where inequality has increased, what can

explain it? The functioning of labour markets and globalisation were suggested as explanatory variables. These developments have occurred over a very long time span and their impact differs considerably across countries, indicating perhaps that the driving factors behind shifts in inequality are not universal. Globalisation cannot be seen as a major independent contributor to the evolution of income distributions, as Jürgen Stark (ECB) said.

Inequality and growth Do we have an adequate economic theory for the inequality-growth nexus? In her keynote address on "The economics of distribution and growth. Recent issues", Cecilia Garcia-Peñalosa (GREQAM) noted that different combinations of factors of production determine growth and distribution. Causation may, however, vary and there may also be other factors, such as policies and technologies, which simultaneously determine growth and inequality. She argued that the growth process will not bring about a reduction of inequality by itself. Hence redistribution will remain a policy concern even in affluent societies.

It was clear that economists are still searching for theoretical explanations on how growth and inequality interact taking into account that individuals do not only receive labour but also capital income, as Atkinson emphasised.

Amparo Castelló-Climent (University of Valencia) demonstrated that the effects of inequality on growth depend on the level of development ("Inequality and growth in advanced economies: An empirical investigation"). There is a negative effect in less developed countries and a positive one in high income economies. However, this positive effect is not stable over time and is highly affected by atypical observations.

Lars Jonung Conference organiser



Does EMU make a difference? The conference tried to shed light on the possible impact of EMU on inequality, but did not reach a consensus. Giuseppe Bertola (University of Torino) asked "Economic Integration, Growth, Distribution: Does the euro make a difference?". In his keynote address he answered that the euro has contributed to growth as aggregate euro-area production and trade integration have increased. Employment performances also appear to have improved in comparison to other EU countries. But euro-area countries also appear to have experienced increasing inequality (see Graph 1) mainly due to social policy becoming less generous.

Graph 1: Evolution of inequality

4.4

4.8

5.2

1995 2000 2005

Inco

me

quan

tile

ratio

Euro area 12

EU15

Source: Bertola (2007)

This evidence, while still preliminary and open to various interpretations according to Bertola, suggests that improvement of public and private instruments of income redistribution and risk sharing via financial markets should have high priority in order to reduce the potential adverse effects of the euro on income distribution.

During the lively debate following Bertola's keynote address it was mentioned that social spending has remained broadly stable in the euro area and, in any event, specific spending categories cannot be attributed to EMU's fiscal policy framework. It was also mentioned that the usage of aggregated inequality data may have distorted the results.

Florence Bouvet (Sonoma State University, California) analysed the evolution of per capita income inequality among European regions during the period 1977-2003 ("Dynamics of regional income inequality in Europe and impact of EU regional policy and EMU"). Inequality has decreased since 1977, owing to a decrease in between-country inequality, and despite an increase in within-country since the mid-1990s.

Inequality has been greater among low-income regions than among high-income regions. Her econometric analysis suggests that EMU has so far contributed to a reduction in regional inequality in richer EU countries, while it has exacerbated regional disparities in poorer countries.

Why Europe is different from the US? In his keynote address ("Issues in the Comparison of welfare between Europe ad the United States"), Robert Gordon (Northwestern University) compared welfare in the EU15 and the US, asking how Europe can be so productive yet so poor. His answer was that work hours in Europe have fallen drastically in the past 40 years, reflecting long vacations, high unemployment, and low labour force participation. Low work hours in Europe are mainly due to higher labour taxation and the generosity of the welfare state together with employment and product market regulation and generous unemployment benefits.

Graph 2: Top 0.1% income share

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Inco

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Source: Piketty-Saez dataset, ow n calculations

Turning to real GDP comparisons, Gordon estimated Europe’s welfare in 2004 to be at about 79 percent of that in the US, whereas per-capita incomes stood only at 69 percent. An additional dimension in his welfare comparison was the growing inequality in the US as compared to Europe (see Graph 2). His paper surveyed the related literature and concluded that the transatlantic contrast is due to a mix of institutional and market-driven explanations. In particular he mentioned the common and more lucrative use of stock options at the managerial level in the US as one reason for the difference.



Inequality and credit markets Alena Bicáková (Charles University, Prague) and Eva Sierminska (Luxembourg Income Study and DIW, Berlin) focused on financial market issues, notably the relationship between inequality of home ownership and access to credit markets and mortgage market development in five EU countries ("Homeownership inequality and the access to credit markets"). Mortgage availability affects home ownership in particular among the lower income deciles. Policies supporting home ownership among young households should preferably target low-income groups.

Future research Many of the issues raised during the ARC'07 were also discussed by Begg (College of Europe), Garcia-Peñalosa, Gordon, Regling (DG ECFIN) and Stark at a concluding panel. It was noted that many EU policies that promote growth, market integration, trade, employment and competition also work in favour of social

cohesion, fairness and equality. In this respect Regling said that the importance of the Lisbon Strategy for Growth and Jobs cannot be overemphasised.

Several commentators recommended that additional research be carried out on the impact of EU policies on equality. There is also considerable scope for further work on data issues and empirical research as well as the theoretical underpinnings of equality developments. The European Commission‘s strategic review of EMU after 10 years will be an excellent opportunity to return to the topic of the research conference and further analyse the impact of the EMU on growth and equality.

Lars Jonung and Jarmo Kontulainen

DG ECFIN 2007 Annual Research Conference: a personal afterthought In The Wealth of Nations, published in 1776, Adam Smith wrote: "No society can surely be flourishing and happy, of which the far greater part of members are poor and miserable." Distribution was thus an important concern from the very birth of Economics as a field of study. The issue is particularly topical now, given the recent general increase in inequality in industrial countries, but it is a difficult one.

It was clear, at the Conference, that there are issues of data availability and comparability. Moreover, as Cecilia Garcia-Peñalosa stressed, growth and income

distribution are joint outcomes of the functioning of an economic system. A structural theory of their joint determination is hence necessary to distinguish correlation from causation. Unfortunately, no all-encompassing standard modelling approach to technological change, innovation, entrepreneurship and distribution is available in the literature (either now or, probably, in the future). Choices about the definition of the variable of interest (wealth, income, earnings), the population (individuals, households, regions) and the time period (year, life-cycle) are all-important. Furthermore, ranking distributions from a normative viewpoint is far from straightforward, yet it is a fundamental political question about which reasonable disagreement is pervasive.

Faced with such questions, policy-makers cannot avoid the burdens of judgment. In my view, the policies that should be followed should contain two aspects: first, a framework favouring competition, innovation and technological change; and second, a focus on education, job training, and improving skills, but also on mechanisms to facilitate labour market transition. Economists are rediscovering Political Economy. Political support is necessary to maintain a well-functioning open market economy.

Vitor Gaspar (BEPA)

of 16 Summary of Research Projects

Page 5 of 16

European Economy Research Letter Volume 1, Issue 3

1. Introduction The story of Spanish economy since the mid-1990s, encompassing the run-up to EMU and EMU itself, is one of buoyant growth and remarkable real convergence. Growth has been driven exclusively by domestic demand, especially private consumption and investment in housing, underpinned by the sustained reduction of risk premia since the early 1990s, as well as a successful fiscal consolidation during the last years of the century.

In parallel with consistently high growth, a number of imbalances have emerged: firstly, the inflation differential with the euro area has remained at about 1% since the mid-1990s. This, together with low productivity growth, has been dragging competitiveness in domestic products and services and feeding a rapidly growing current account deficit.

From left to right: L.A. Maza Lazierra, C. Martinez-Mongay and J. Yaniz Igal

Such characteristics, which are nowadays part of a broadly consensual diagnosis of the economic situation in Spain, were anticipated already three years ago in a Country Study, which comprehensively analysed the Spanish growth model, including its imbalances. Since then, particularly interesting aspects of these imbalances have been discussed in several issues of the Country Focus series between 2005 and 2007. Most recently, research by the Spanish desk has dealt with the relationship between asset booms and tax receipts. And all this research was brought together in a seminar on

the adjustment of the Spanish economy in EMU held last September.

As expected, an open and frank discussion took place during the seminar, and the contributions of panellists, speakers, discussants and other participants, all of them of the highest level, led to interesting conclusions being drawn. The central issue was whether the adjustment would be smooth and orderly, conducive to a rebalancing of economic growth, or a boom/bust process, in which Spain might enter a long and painful adjustment process, like those seen in Portugal or Germany, albeit for different reasons.

According to most participants, the balance of risks does not appear to be very low. The majority had in mind a central scenario that broadly assumed a relatively mild slowdown, starting in the housing sector and private consumption.

Graph 1: Investment in dwellings vs. current account balance

-10-8-6-4-202468

1012

1998 1999 2000 2001 2002 2003 2004 2005 2006

% GD P

Investment in dwellings Current account balance

2. Spain in EMU: a long-lasting virtuous cycle? The Country Study published in 2005 showed that domestic demand has been especially resilient throughout the current economic expansion due to strong job creation and loose monetary conditions, which yielded positive expectations of higher permanent income.

The Study examined the role of macroeconomic policies, concluding that the fiscal stance had been tight overall, and would therefore not seem to be the most important factor behind Spain’s economic performance over the last decade. On

Spain: a story of rapid convergence and high imbalances


Page 6 of 16


the other hand, the fall of risk premia had induced a growth-supportive monetary loosening in Spain since the mid-1990s.

On the supply side, the Country Study identified labour as the main driving force behind economic activity in Spain, while productivity growth, especially total factor productivity, was sluggish. The combination of low productivity growth and a persistent inflation differential has represented a drag on the competitive position of the Spanish economy and partially explains the widening external deficit. The Country Study also looked at the functioning of labour and product markets with a view to identifying structural factors behind inflation and productivity differentials with the euro area. Despite certain imbalances in the structure of employment and unemployment, the labour market performance remains remarkable compared with productivity growth. Closely linked to the productivity slowdown, the traditional comparative advantages enjoyed by Spain, which are significantly based on low production costs, seem to be fading away.

All in all, the Country Study helped identify a series of key issues at the core of the research agenda of the Spanish desk. While the analysis of investment led to the identification of the housing boom as a main characteristic of the Spanish expansion, assessing its sustainability seemed to require a closer look at other issues related to the nature of inflation, whether cyclical or structural, and the determinants of the external deficit and its financing.

3. The housing boom The number of new dwellings built in Spain doubled between 1997 and 2004. Strikingly, this impressive response of supply to a demand shock, based on demographic developments, has not put a brake on housing prices, which have also doubled in real terms during the same period. A Country Focus looking at these impressive figures was published at the beginning of 2006. It analysed developments in the Spanish housing market, based on the premise that the price of a property may not be the decisive factor in households’ purchasing decisions, especially if the acquisition is to be financed with a mortgage. In that case, the annual mortgage payment measured in terms of the household income provides a better market signal. In fact, significant and persistent improvements in the financial conditions, coupled with a sustained increase of nominal income in Spain, appeared to have offset housing price

increases, leading to a broadly constant, and sometimes even decreasing, annual financial effort between 1997 and 2004. As a result, rising housing prices have not had any significant impact on households’ purchasing power, with the sustained increase in household income, coupled with a high population growth by historical standards, apparently behind the persistent demand shock in the Spanish housing market.

4. The inflation differential: a never-ending story Although cyclical and monetary conditions play a non-negligible role, the persistence of the inflation differential between Spain and the euro area seems to be explained mainly by structural elements. Income convergence, higher wage growth coupled with lower productivity growth than in the euro area, and the presence of non-competitive behaviour and market rigidities in some sectors seem to be the key elements behind the persistently higher inflation in Spain. The cumulative effect of inflation differentials has thus started to jeopardise Spanish competitiveness as the real effective exchange rate has appreciated. Liberalisation initiatives therefore need to be complemented by measures aiming to increase effective competition through a deeper process of market deregulation.

5. External imbalances: their origin and financing Two additional Country Focus papers issued this year have been devoted to this burning topic. The first deals with the economic fundamentals behind the growing current account deficit, while the second analyses the financial dimension.

In 2006 the current account deficit reached 8½% of GDP, its worst position in 25 years. Traditionally, Spain’s trade deficit has been partially offset by surpluses in other external balances, particularly services trade as a result of large net tourism inflows, but since 2005, the current account deficit has been as large as the trade deficit. While cyclical factors, strong domestic and weak foreign demand, and the transitory effect of the increase in oil prices certainly have some bearing on the deterioration of the current account balance, structural factors, linked to persistent competitiveness losses, also play a significant role. In the past, attempts to rebalance external accounts relied on the exchange rate instrument. However, as devaluation is no longer an available option since


Page 7 of 16


accession to the monetary union, the Country Focus concludes that the accent should be put on rolling out policies designed to enhance productivity growth – in other words, implementing the Lisbon agenda.

This huge external imbalance has brought about increasing borrowing requirements. This is the financial mirror of a growth model in which corporate and household investments are generating an unprecedented private demand for credit. The second Country Focus concludes that, although the solvency of Spanish borrowers does not seem to be at risk in the short term, in the medium and long run, any widening of the already extensive recourse to external saving might lead to additional pressure on the economy. It is portfolio investment, rather than FDI, which is the main financial instrument, while the financial system – and not the corporate sector or general government – has become the main channel between domestic borrowers and private foreign lenders.

6. Tax revenues and asset boom The rising external deficit mirrors the unprecedented expansion of real state assets, including housing, while extraordinary profits have attained historical levels. Asset booms are highly tax rich, but the additional receipts they bring may not be of a permanent nature, even if the usual measures of structural revenues would suggest the opposite.

Since the mid-1990s, tax receipts have increased – by about 4¼ percentage points of GDP. In parallel, interest payments, which, driven by the reduction in risk premia and debt levels, had been on a significant declining path until recently, are no longer offsetting the permanent increase in current expenditures. The sustainability of the current budgetary surpluses in Spain very much depends on how permanent the current revenue boom is.

Econometric analyses provide evidence that 50 to 75 percent of the increase in tax revenues recorded in Spain between 1995 and 2006 might be transitory and disappear with the asset boom. This confirms the need to rigorously implement spending-control mechanisms, as was highlighted in the Country Study already three years ago.

This research also provides fairly robust evidence that in the presence of significant composition effects, the usual methods to identify the budgetary effects of the economic cycle on the

budget may lead to an overestimation of structural revenues and to an incorrect assessment of the fiscal stance. This seems particularly relevant in EMU because the likelihood of asset booms may be relatively high when the monetary-policy stance is independent of the country's inflation.

Graph 2: Estimations of excess collection associated with the composition effect

2.9

2.2

4.3

-1.0

0.0

1.0

2.0

3.0

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1998 1999 2000 2001 2002 2003 2004 2005 2006

% GDP

Estimation by ecometric modelDirect estimationObserved changes

Furthermore, in the specific case of Spain, the scale of the transitory composition effects associated with the current asset boom highlights the need for its national policymakers to carefully weigh up any proposals for unfunded tax cuts and/or expenditure increases, especially those likely to be more difficult to reverse in bad times.

Javier Yániz Igal, Carlos Martínez-Mongay and Luis Angel Maza Lazierra

References Ayuso, J., F. de Castro, O. Gómez and C. Martínez-Mongay, 2005, Country Study: Spain in EMU: a virtuous long-lasting cycle? European Commission DG ECFIN, Occasional Papers n° 14.

Cabrero, A. and J. Yániz, 2006, The Spanish external deficit: cyclical or structural?, European Commission DG ECFIN, Country Focus, Volume IV, Issue 1.

Cabrero, A., L.A. Maza and J. Yániz, 2006, Spain's external deficit: how is it financed?, European Commission DG ECFIN, Country Focus, Volume IV, Issue 7.

Martínez-Mongay, C., L.A. Maza and J. Yániz, 2007, Asset Booms and Tax Receipts: The case of Spain, 1995-2006, European Commission DG ECFIN, forthcoming in Economic Paper series.

Yániz, J., 2005, The Spanish housing market: are we in for a soft landing?, European Commission DG ECFIN, Country Focus, Volume III, Issue 1.

of 16 Recent Economic and Occasional papers Summary of Research Projects


1. Introduction Business-as-usual trends would lead to unprecedented atmospheric concentrations of greenhouse gases (Graph 1), with levels of carbon dioxide (CO2) rising from around 200 parts per million in the past to over 800 by the end of this century. Thus, huge worldwide abatement efforts are needed to avoid dangerous climate change. This implies absolute and declining caps on greenhouse gas emissions to drive the “decarbonisation” of the world economy.

Graph 1: Historic level of atmospheric carbon dioxide concentrations and temperature changes

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-400 -300 -200 -100 0Thousand years ago

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However, there is a risk of free riding by countries due to the “global commons” characteristics of the climate, and the absence of a global enforcement mechanism. The EU has decided not to wait for consensus on global action but to lead by example. In March 2007 the European Council set new targets, committing the Member States to collectively reduce greenhouse emissions by 20% by 2020 compared with 1990, and by 30%, if international agreement to reduce emissions is reached. However, there is a concern that these policies will be costly for European society without having the hoped-for effect (of others joining the effort). EU producers might instead consider relocating

outside the EU, where no carbon constraint exists. This “carbon leakage” effect might be especially serious for those energy and carbon-intensive industries in Europe exposed to intense

international competition. In the context of DG ECFIN’s economic analysis of Community policies, a forthcoming Economic Paper1 tries to identify the cost implications a carbon constraint will have on energy-intensive industries, which activities are most affected, and what this could mean for their ability to pass through higher costs.

2. Why does for the future competitiveness of energy-intensive industries matter? In Kyoto, in 1997, the EU and its Member States agreed to a cap on their absolute emissions. The European Emissions Trading Scheme (EU ETS) includes most of the industrial sectors that are sometimes grouped together under the heading “energy-intensive industries”, and electricity generators. It thus covers almost half the EU’s CO2 emissions. The ETS has created a market in emissions allowances, so that firms in the ETS face the marginal cost of their greenhouse gas emissions, unlike most potential competitors in third countries, very few of which have agreed to cut emissions. Firms in sectors where international competition is intense may be unable to pass through higher costs, and so lose competitiveness. Moreover, if electricity producers pass through the opportunity cost of allowances in electricity prices, firms outside the direct scope of the ETS – such as aluminium producers – may also be affected. Little work has been done so far to identify the industries most at risk and the size of the potential cost increase they face2. The ECFIN paper tries to fill this gap, by both “top-down” and “bottom-up” approaches.

3. “Top-down” analysis: energy-intensive industries and their size in the economy The Energy Products Tax Directive3 defines an energy-intensive business inter alia as a business where “purchases of energy products and electricity amount to at least 3.0% of the production value”. Using this definition, Eurostat’s 1 "Imposing a unilateral carbon constraint on energy-intensive industries and its impact on international competitiveness – data & analysis" 2 See “Report on International Competitiveness”, DG Environment, McKinsey, Ecofys (2006) 3 Directive 2003/96 EC, OJ L283, 31 October 2003

The impact of a carbon constraint on energy intensive industries

From left to right: M. Bergmann, M. Hayden, A. Schmitz


Page 9 of 16


Structural Business Statistics database identifies 17 out of 104 NACE 3-digit sectors, representing about 14% of manufacturing industry value added, as energy-intensive at EU level (Graph 2).

Graph 2: Value added of energy-intensive industries in EU 21, 2004

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Source: Eurostat: Structural business statistics. This analysis is already quite disaggregated, but more detailed data are needed to identify the potential impact of climate change policies on particular industries and products, and the economic significance of that impact. For example, “non-ferrous metals” includes aluminium manufacture, which is highly energy-intensive when using raw materials, but much less so using recycled inputs. To try to identify more precisely the potential impacts of a carbon constraint we therefore carried out a “bottom-up” analysis, focusing on products.

4. “Bottom-up” analysis: the most energy-intensive products, and the effect of a carbon constraint on their costs Data for this analysis came mainly from the “Best Available Techniques” reference documents (“BREFs”) produced under the Directive on Integrated Pollution Prevention and Control (“IPPC directive”). These identify production techniques that are effective in terms of environmental protection and technically and economically viable. Combined with up-to-date figures on energy and output prices, we identified the products for which the increase in costs implied by a carbon constraint would require the largest increase in output prices to maintain profit margins. Most of the roughly 50 products examined would need a price increase of between 0.1 to 5% to maintain profit margins in the case of a carbon price of €20/t CO2. However, a small number of sectors would need to increase their prices by significantly more (Graph 3). This measure indicates products whose competitiveness is potentially threatened, but what matters is whether producers are able to pass through higher costs to customers. This

requires data on price elasticities of demand, in particular “Armington elasticities”, based on the degree of substitution between similar products produced in different regions. An extensive literature search failed to uncover robust estimates of Armington elasticities for the EU. Graph 3: Price rises needed to recover the direct and indirect cost

of a carbon constraint of €20/tCO2

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However, indirect evidence of ability to pass through cost increases comes from indicators such as trade exposure and degree of market concentration. Interpretation of these indicators is not straightforward, as trade statistics report flows of products, while market concentration is a characteristic of an industry, and one industry sector may produce several products. Moreover, data on market concentration are not systematically available, and are sensitive to the geographical definition of the market. However, from the available data the branches most at risk seem to be primary production of aluminium and steel and some basic chemicals; the cement industry is very energy-intensive but relatively little exposed to international competition.

5. Conclusions The analysis has shown that any severe competitiveness impacts of EU climate policy are likely to be limited to a few specific products. But an independent EU climate policy constrains EU industry but not potential competitors in third countries. Were this constraint to lead production to shift outside the EU, the environmental goals of European climate policy would be undermined, on top of the loss to the EU economy. So far, however, we have found no evidence that such “carbon leakage” has occurred or should be an issue in the short to medium run. Energy-intensive industries are by definition very capital-intensive and so face entry and exit barriers that discourage delocalisation. Our research has also thrown up gaps in the knowledge base. In particular, it seems remarkable that up-to-date, reliable estimates of price elasticities of demand facing EU industry are not available.

Manfred Bergmann, Mark Hayden, Andreas Schmitz

of 16 Methodological Notes

Page 10 of 16


"The labour market will not function well without proper institutions" (Blanchard, O., 2002, “Designing Labour Market Institutions”, MIT), that is, without an appropriate mix of established arrangements affecting the functioning of the labour market and shaped by the policy strategies instituted and enforced by governments and relevant collective actors.

From left to right: A. Arpaia, F. Pierini, G. Carone

Drawing from this evidence – largely underpinned by economic research on labour markets – DG ECFIN (Unit E-3) and the Economic Policy Committee (EPC) have developed a joint project, the LABREF database, to collect and organise factual information on reforms of the labour market institutions. The aim of this joint effort is to support the work carried out in the framework of the EU economic policy coordination processes and economic surveillance of Member States’ economies, and to improve the understanding of labour markets institutions and of their impact on labour market performance.

The database integrates already existing datasets on labour market institutions and is conceived as a tool to provide comprehensive information on specific features of the reform process, including the design of enacted reforms, their scope and durability. As such, it focuses on selected characteristics of reform measures and provides information on their expected implementation phase. The information contained

in LABREF refer to enacted legislation and other public acts of general scope such as measures entailing a change in the implementation framework of previously adopted reforms, as well as all relevant non-governmental measures, in particular tripartite and collective agreements at sector and cross-industry level.

LABREF is organised around 10 broad policy areas, corresponding to different labour market institutions (labour taxation, unemployment and welfare-related benefits, active labour market programmes, job protection, disability and early retirement schemes, pension systems, wage bargaining, working time organisation, immigration and mobility), covering 37 areas of policy intervention. For each measure the database reports 13 key characteristics identifying specific features of the reform design (e.g. timing of implementation, presence of a broad policy package, socio-economic groups targeted, broadness of the reform, etc.).

LABREF enables tracking reforms by country, policy area, year of adoption, one or more key characteristics of the reform design, or by multiple combinations of these features. A simple selection over countries and years concerning specific target groups (e.g. women, older workers, etc.) can for instance deliver an overview of the measures enacted in the Member States to tackle the employment issues of these groups.

Recent uses of LABREF Since its creation in December 2005, LABREF has provided inputs to the EPC Thematic Country Reviews on reforms of the tax and benefits system, has helped to identify commonalities in the reform measures enacted in euro-area countries and has been used as documentation for the IMF Article IV on the euro area. The database has been also largely exploited to describe changes in the regulatory and policy environment of specific countries, in particular in the preparation of two DG ECFIN country studies, on Germany and Poland, and has been used in

LABREF: Labour Market Reforms Database

The section on methodological tools is a regular feature of this publication. DG ECFIN, in collaboration with the Economic Policy Committee (EPC) and other research and policy fora, develops tools of surveillance which are made available to all interested parties.

of 16 Methodological Notes

Page 11 of 16


the context of the Lisbon Strategy for the Annual Progress Report (macro annex) to assess National Reform Programmes. Drawing on LABREF, the description of reform strategies is feeding the ongoing debate within the Eurogroup on labour market reforms and labour market adjustment capacity. Finally, the chronology of reforms available from LABREF has been exploited to asses the effects of measures targeted to people at the margin of the labour market on employment and productivity growth (EU Economy: 2007 review, chapter 3), while ongoing work based on difference-in-difference methodology is exploring the contribution of specific policies' strategies on the employment and participation rates of specific groups (older workers, women, young persons) and on their response over the economic cycle.

How LABREF is processed To ensure the reliability of the database, information collected by DG ECFIN is checked by national delegates to the EPC before being published on the web. In those cases where information could not be checked, this is clearly

mentioned on the LABREF website. Sources used to compile LABREF include the International Labour Organisation (ILO), the European Industrial Relations Observatory (EIRO), the country reports by the OECD and IMF, the National Action Plans for Employment, which have become National Strategy Reports since 2005, national legislation and other information publicly available from the websites of relevant ministries.

Information available to date

Data for the EU-25 for the years 2000 to 2006 are accessible through the website http://ec.europa.eu/economy_finance/db_indicators/db_indicators8638_en.htm. Already available information on labour market reforms adopted in Romania and Bulgaria cover the period 2003-2006. Backdating to 1997 (start of the European Employment Strategy) is under way for the EU15 and will be released during the first quarter of 2008.

Alfonso Arpaia, Giuseppe Carone and Fabiana Pierini

The EU Economy: 2007 Review: Moving Europe's productivity frontier

Tackling the root causes of slow productivity growth remains one of the most pressing and complex economic policy changes facing the Union. This is the main message from the EU Economy: 2007 Review which provides an in-depth analysis of productivity developments and policies to move Europe's productivity frontier forward. The report, published on 21 November, assesses in considerable detail structural productivity trends both at the economy-wide and at the industry level and it further examines the determinants of TFP growth using a panel regression approach. Against the background of strong employment growth, the report also evaluates an eventual trade-off between productivity and employment. Last, but not least,

policies to promote productivity growth are reviewed under the headings of knowledge building, strengthening competition forces, and enhancing flexibility.

Karl Pichelmann *********************************************************************************************************************Country Focus Publication This web-based series by ECFIN staff provides a concise analysis, set within the broader economic and policy debate, of a topical economic issue concerning one or more Member States. The views

expressed are the authors’ and do not necessarily represent those of the Commission.

http://ec.europa.eu/economy_finance/publications/publ_list2707.htm The most recent papers are: Long-term growth remains a challenge for Slovakia despite the current boom By Anton Jevčák (Vol. IV, Issue 8, July 2007).

The business cycle in Poland: where do we stand? By Michał Narożny (Vol. IV, Issue 9, August 2007).

Managed vs free wage-setting in Finland and Estonia: optimising outcomes By Mart Maiväli and Natalie Lubenets (Vol. IV, Issue 10, October 2007).

of 16 General Research Matters

Page 12 of 16


Economic analyses on the impact of migration on the countries of origin, many of them developing countries, point mainly to the losses of human capital ("brain drain") and the benefits from remittances, i.e. the money that migrant workers send home to their families. Policies to strengthen these benefits aim at reducing the costs of transferring remittances and enhancing the development impact of the use of remittances. In this respect good knowledge about remittance flows are essential for informing decisions on remittances in both public and private sector.

According to World Bank estimates, officially recorded remittance flows in 2006 – broadly defined as the three balance of payments lines "workers' remittances", "compensation of employees", and "migrants' capital transfers" - amounted to USD 281 billion worldwide. Of these, developing countries received USD 208 billion, almost the double of remittances in 2001 and of official development assistance in 2006. They provide an important source of income in many countries.

However, official statistics on remittances are not very reliable, to a large part because of the frequent use of informal channels to transfer money and the small amounts sent that are often

below thresholds of obligatory reporting. At the Sea Island Summit in 2004, G8 countries pledged to improve data on remittance flows and to develop standards for data collection in both sending and receiving countries. Since then, central banks and statistical offices have stepped up their efforts to

improve the situation.

A survey of Member States' data, carried out in 2005 by DG ECFIN, showed that workers' remittances (narrowly defined, i.e. excluding compensation of employees and intra-EU flows) from the EU added up to only EUR 9 billion in 2004. The survey revealed that the data situation is rather unsatisfactory as Member States' methodologies and reporting varied considerably. Information on the destinations of remittances

from the EU was also incomplete. A recent survey of Eurostat to collect Member States' remittances data showed some improvement in coverage, as outflows in 2006 amounted to EUR 19.2 billion to non-EU countries and EUR 6.8 billion within the EU.

In addition, DG ECFIN commissioned a study on "The volume and geography of remittances from the EU" carried out by Sergi Jiménez-Martín, Natalia Jorgensen and José María Labeaga at the Fundación de Estudios de Economía Aplicada (FEDEA) in Madrid. The study presents for the first time bilateral workers' remittances flows from the 27 EU countries to all relevant (from a migration perspective) countries in the world. An indirect estimation methodology was used that estimates remittances from the stocks of migrants by origin in Member States, their disposable income and their propensity to remit, taking also informal flows into account. Table: Remittances from the EU-27 by origin and destination (in current EUR billion), 2004

Origin EU-27non-EU Europe

North Africa

Sub-Saharan

AfricaLatin

America AsiaOther

regions TotalGermany 1.69 2.70 0.13 0.30 0.21 0.61 0.34 6.0France 1.62 0.22 2.29 0.72 0.05 0.23 0.16 5.3Spain 0.72 0.14 1.11 0.20 2.00 0.05 0.23 4.4UK 0.93 0.13 0.06 1.12 0.14 0.97 0.75 4.1Italy 0.34 0.66 0.23 0.44 0.15 0.16 0.11 2.1Belgium 0.39 0.14 0.30 0.04 0.03 0.04 0.04 1.0Netherlands 0.26 0.14 0.22 0.08 0.07 0.08 0.05 0.9Austria 0.33 0.32 0.02 0.03 0.02 0.05 0.02 0.8Other MS 0.61 0.54 0.06 0.28 0.26 0.22 0.21 2.2Total 6.9 5.0 4.4 3.2 2.9 2.4 1.9 26.8

Destination

Source: DG ECFIN calculations based on Jiménez-Martín et al. (2007).

The main results indicate that remittance outflows from EU Member States have continuously increased between 2001 and 2004, the number of migrants being the most important determinant of this trend. In 2004 migrants in EU-27 remitted about EUR 20 billion to countries outside EU-27, and almost EUR 7 billion within EU-27. The 10 main remittance corridors identified are Germany-Turkey, France-Morocco, France-Portugal, Spain-Morocco, Germany-Poland, Spain-Colombia, Spain-Ecuador, France-Algeria, Italy-Albania, and Germany-Serbia/Montenegro. Apart from intra-EU remittance flows, main global regions of destination are non-EU Europe, North Africa, Sub-Saharan Africa and Latin America.

The study can be downloaded at: http://ec.europa.eu/economy_finance//int_economic_issues/economic_issues_of_eu_development_policy9607_en.htm

Martin Hallet

Volume and geography of remittances from the EU

Martin Hallet

of 16 Recent Economic and Occasional papers General research matters


Gaëtan Nicodème joined DG ECFIN in2000. He worked mainly on taxation, product market reforms and network industries. In 2007, he moved to DG TAXUD to become head of sector for the economic analysis of capital and consumption taxes of Unit E4. He obtained his PhD in Economics and Business from Solvay Business School (ULB) in 2007. Next to his work at the

Commission, Gaëtan continues to teach at the ULB’s Institute for European Studies and Solvay Business School.

On 30 August 2007, you and Professor Ruud de Mooij of CPB Netherlands received the Peggy and Richard Musgrave Prize. The prize was awarded by the International Institute of Public Finance (IIPF) for your joint paper "Corporate Tax Policy and Incorporation in the EU". Did it come as a surprise? Yes! Each year, over 200 papers are presented at the annual IIPF congress, in fields such as education, environment, pension systems, labour market policies, public goods, taxation, etc. Most papers are of very high quality and written by leading academics. So when the chairman started describing the winning paper, I was thinking: "wait a minute, is he talking about our paper?" (laughs). Can you tell our readers more about the prize?

The Peggy and Richard Musgrave Prize was created in 2003 by the IIPF to encourage young scholars (authors must be under the age of 40) to meet the high standards that have been a mark of the Musgraves' contribution to public finance. It is awarded annually at the IIPF annual congress. Why do you think your paper won?

The Musgraves have always been concerned about not only meeting high academic standards but also addressing issues that have high policy relevance. Our paper not only assesses the effect of tax policy on incorporation but also derives the repercussions of corporate tax competition on corporate tax collection and on income shifting between the personal and corporate income tax base. Was this policy relevance that inspired you?

Yes. It is a long-standing puzzle that corporate tax rates have been declining for at least 25 years while corporate tax revenues are still buoyant. Many authors think that base-widening policies alone cannot explain the entire phenomenon. So when DG ECFIN invited Ruud de Mooij for a seminar I suggested to him that we could try to use Eurostat's dataset on business creation to assess whether taxes affect entrepreneurship and incorporation. Ruud was enthusiastic and under the Visiting Fellow Programme, with the help of Heikki Oksanen and the support of Declan Costello and Jan Schmidt, we organised a one-month visit during which Ruud and I did the econometric work and wrote a first draft. The nice surprise was that the regressions behaved exactly as we expected: differentials between personal and

corporate tax rates explain incorporation patterns and hence partly elucidate why corporate tax revenues remain relatively unaffected. This was a success story for the Visiting Fellows Programme! What were the most important factors contributing to your success?

Firstly, full support from the hierarchy and the research directorate, especially in terms of time; secondly, approaching the issue from both an economic and a policy perspective; and last but not least, a good topic and an excellent co-author. What more can we expect from you in the future?

As far as research is concerned, I have many papers on my agenda as academia shifts its focus from tax competition to the effects of profit-shifting and company relocation. Ideas are never a problem; it is time that’s the scarce factor (laughs). In terms of work, I have started as head of a new sector that deals with the economics of capital, corporate and consumption taxes, which involves coordinating and setting directions for internal research in those areas. Do you have any tips for other aspiring researchers?

Research is energy- and time-consuming, and I would firstly encourage the management to give the Commission’s many talented researchers the time and resources to do research, and then to promote the output internally and explain why it is important for better policy making. In my experience, there is no better way to get expertise in a field than to research it. It forces you to think hard about the issues, to understand potential data limitations and to grasp the economic literature. This investment ultimately reinforces the quality of the Commission's proposals. To researchers, I would say: first think about what the relevant policy issues are. Secondly, whip the data until you understand exactly what is going on. Third, seek good academic cooperation as this is a quick and effective way to learn. Fourth, seek refereed publications and do not hesitate to present your papers at conferences. Many researchers stop once they have produced a working paper, but it is just the starting point. Discussants and referees are a great source of advice. Finally and most importantly, be passionate about research and have fun. In life, there is absolutely no point doing things you don't like (smiles).

Interview by Kristine Vlagsma

Interview with Gaëtan Nicodème: Winner of the 2007 Peggy and Richard Musgrave Prize

of 16 Recent publications

European Economy Research Letter

Journal articles Boone, L. and P. van den Noord (2007), Wealth effects on money demand in the euro area, Empirical Economics. Deroose, S., D. Hodson and J. Kuhlmann (2007), The legitimation of EMU: Lessons from the early years of the

euro, Review of International Political Economy, Vol. 14, N° 5, pp. 800-819. García-Martinez, P. and M.Á. Malo (2007), The strategic use of dismissal legislation: an empirical analysis using

Spanish data, European Journal of Law and Economics, Vol. 23, N° 2, pp. 151-167. McMorrow K. and W. Roeger (2007), An analysis of EU growth trends, with a particular focus on Germany,

France, Italy and the UK, National Institute Economic Review, N° 199, pp. 82-98. Nicodème, G. (2007), Comparing effective corporate tax rates, Frontiers in Finance and Economics, Vol. 4, N° 2. Planas C., W. Roeger and A. Rossi (2007), How much has labour taxation contributed to European structural

unemployment?, Journal of Economic Dynamics and Control, Vol. 31, N° 4, pp. 1359-1975. Roeger, W. (2007), Growth, employment and taxation with distortions in the goods and labour market, German

Economic Review, Vol. 8, N° 1, pp. 1-27.

Papers in academic volumes and other series Albers, R. (2007), Comments on 'The portfolio of econometric models for inflation forecasts', in: Bank of Albania,

Inflation Targeting 2, Tirana, pp. 131-144. Albers, R. (2007), Comments on 'Legal issues for the implementation of inflation targeting in Albania', in: Bank of

Albania, Inflation Targeting 2, Tirana, pp. 343-348. Dierx A. and F. Ilzkovitz (2007), The 'new' Lisbon strategy - Promoting innovation and growth in Europe, in: Walter

Leal Filho and Marzenna Weresa, editors, Achieving Competitiveness through Innovations - A Challenge for Poland and Other New EU Member States, pp. 9-39.

Dierx A., F. llzkovitz and J. H. Schmidt (2007), Competition, regulatory cost and economic growth, in: Abel M. Mateus and Teresa Moreira, editors, Competition Law and Economics: Advances in Competition Policy and Antitrust Enforcement, pp. 163-189.

Jonung, L. and J. Vlachos (2007), The euro - what's in it for me? An economic analysis of the Swedish euro referendum 2003, Report 2007:2, Swedish Institute for European Policy Studies, Stockholm.

Pichelmann, K. and W. Roeger (2007), Employment and labour productivity in the EU, Reconsidering a potential trade-off in the Lisbon strategy, in: Barry Eichengreen, Dieter Stiefel and Michael Landesmann, editors, The European Economy in an American Mirror, Routledge, pp. 133-147.

European Economy Economic Papers No. 291: The track record of the Commission's forecasts - an update, by A. Melander, G. Sismanidis and D.

Grenouilleau (ECFIN), October 2007. No. 290: An overview of the EU KLEMS Growth and Productivity Accounts, by D. Koszerek, K. Havik, K. Mc

Morrow, W. Röger and F. Schönborn (ECFIN), October 2007. No. 289: Pension Systems, Ageing and the Stability and Growth Pact, by R. Beetsma (University of Amsterdam,

CEPR, CESifo) and H. Oksanen (ECFIN), October 2007. No. 288: Towards inflation targeting in Egypt: Fiscal and institutional reforms to support disinflation efforts, by

Hoda Abdel-Ghaffar Yousse (former ECFIN trainee), October 2007. No. 287: A fresh look at business cycle synchronisation in the euro area, by Christian Gayer (ECFIN), October

2007. No. 286: The economic analysis of state aid: Some open questions, by C. Buelens, G. Garnier, Roderick

Meiklejohn (ECFIN) and M. Johnson (U.K. Office of Fair Trading), September 2007.

List of recent external academic publications by DG ECFIN staff

Recent Economic and Occasional Papers

Volume 1, Issue 3

Scheduled Events of 16


No. 285: Testing the EU fiscal surveillance: How sensitive is it to variations in output gap estimates?, by S. Langedijk and M. Larch (ECFIN), August 2007.

No. 284: What drives inflation perceptions? A dynamic panel data analysis, by B. Döhring and A. Mordonu (ECFIN), July 2007.

No. 283: The potential impact of the fiscal transfers under the EU Cohesion Policy Programme, by J. in 't Veld (ECFIN), June 2007.

No. 282: Quantitative assessment of structural reforms: Modelling the Lisbon Strategy, by A. Arpaia, W. Roeger, J. Varga, J. in 't Veld and A. Hobza (ECFIN), and I. Grilo and P. Wobst (ENTR), June 2007.

No. 281: Nominal and real wage flexibility in EMU, by A. Arpaia and K. Pichelmann (ECFIN), June 2007.

No. 280: Tax revenues in the European Union: Recent trends and challenges ahead, by G. Carone, J.H. Schmidt and G. Nicodème (ECFIN), May 2007.

No. 279: Provisions of the welfare state: employment protection versus unemployment insurance, by M. Neugart (Wissenschaftszentrum Berlin für Sozialforschung - WZB), May 2007.

European Economy Occasional Papers No. 34: Guiding principles for product market and sector monitoring, by ECFIN, June 2007. No. 33: Main results of the 2007 fiscal notifications presented by the candidate countries, by ECFIN, June 2007. No. 32: 2006 Economic and Fiscal Programmes of potential candidate countries, by ECFIN, June 2007 *********************************************************************************************************************

New ECFIN website The website of DG ECFIN has been comprehensively updated. Top level pages, which target the general public, will initially be available in English, French, Greek, German and Spanish, and will then

be progressively rolled out in all the official languages of the EU. It should be much easier for the non-specialist public to find the information they need - especially since the site is much more logically organised and graphical.

The old site posed problems for researchers; the standard Europa search engines are more intended to find HTML pages than PDF documents. Now the site offers a new, specially developed PDF search tool enabling all reports and publications on the site to be found quickly by using themes and keywords; there is also a dedicated version of the search tool for the section covering the various documents and

procedures under the Stability and Growth Pact. The address of the new home page remains the same as in the past: http://ec.europa.eu/economy_finance/index_en.htm

*********************************************************************************************************************

Visiting Fellows and Economic Seminar Programme Under its Visiting Fellows Programme (VFP) and Economic Seminar Programme (ESP), DG ECFIN seeks to attract leading economists in academia, international organisations, governments and top research institutions to work with its own staff and give a seminar.

Visting Fellows in the last four months of 2007:

Oct.-Nov.

Jean-Marie Viaene Erasmus University Rotterdam

On the extent of economic integration: A comparison between EU countries and US states

26/11-4/12

Benedicta Marzinotto University of Udine Wage moderation in EMU: the role of country size

Information about the two programmes can be found on DG ECFIN’s website at: http://ec.europa.eu/economy_finance/eco_research/index_en.htm

Recent publications

Scheduled Events of 16


WORKSHOPS 29 November 2007 Germany: from the sick man to the powerhouse of Europe? Is the present economic upturn only a transitory cyclical high or has Germany definitively overcome the distortions related to reunification? Can Germany be expected to resume its role as a driver of strong and sustained growth in Europe? What will happen to the German reform agenda? How should the identified obstacles to hiring and job search, to capital formation, innovation and qualification be addressed? These issues will be discussed by economists in a half-day seminar, hosted by DG ECFIN.

17 January 2008 Achieving and safeguarding sound fiscal positions The workshop aims at improving the understanding of the determinants and tools of two inter-related aspects of fiscal policy: achieving and safeguarding sound fiscal positions. The topic is relevant for the effective implementation of the preventive arm of the Stability and Growth Pact which requires Member States to achieve and maintain medium-term budgetary objectives that pursue a triple aim: (i) make rapid progress towards long-term sustainability of public finances; (ii) safeguard against the risk of breaching the 3% of GDP threshold of the Treaty; (iii) create room for manoeuvre for automatic stabilisers to play over the cycle. If you are interested in attending, please fill out the application form and return it to the mailbox ECFIN [email protected] before 10 December 2007.

23 January 2008 Poland at a crossroads: how can the economy benefit more from EU accession?

Poland is currently enjoying a strong cyclical upswing but compared to some new Member States progress with real convergence is slow and the income gap with the wealthier EU countries remains wide. In a seminar hosted by DG ECFIN, experts will examine against the background of a new government taking office in Poland, to what extent there have been missed opportunities, how Poland can benefit more from EU membership, the role of public finances, and which lessons can be drawn for other catching-up countries from the Polish experience.

24-25 January 2008 Characteristics of business cycles: Have they changed? The call for papers for this INFER Workshop hosted by DG ECFIN is open until 30 November 2007. Please find information at www.infer-research.net or contact [email protected]. Researchers are invited to submit theoretical and applied papers e.g. on the following questions: • Has the business cycle in Europe become more synchronised due to EMU? What are experiences

in other monetary unions? What are the main reasons for remaining asymmetries in the euro area? • Have business cycles become more dampened? What are the driving forces behind business cycle

volatility? Has the duration of cycles changed? • Does the sectoral business cycle pattern differ between the euro area and the US? • Have business cycle mechanisms changed e.g. due to globalisation? • Which role does technological progress play? *********************************************************************************************************************

Further, more general information about DG ECFIN’s work can be found in its quarterly magazine European Economy News, which appears both in print and online. Subscription is free of charge. The online version can be found at: http://www/ec.europa.eu/economy_finance/een/

Chief Editor Coordinator Acting Editor Layout Editorial Board

Marco Buti, Deputy Director-General, Economic and Financial Affairs Kristine Vlagsma Oliver Dieckmann George Alexakis R. Albers, G. Alexakis, S. Bland, M. Buti, O. Dieckmann, V. Gaspar (BEPA), M. Hallet, H. Jansen, L. Jonung, J. Kontulainen, I. Szekely, M. Thiel, L. Vinhas de Souza, K. Vlagsma, M. Watson

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