www.bruegel.org

Annual Report2011

Bruegel’s members

State members

AustriaBelgiumCyprusDenmarkFinlandFranceGermanyGreeceHungaryIrelandItalyLithuaniaLuxembourgNetherlandsPolandSloveniaSwedenSpainUnited Kingdom

Corporate members

ArevaDeutsche BankDeutsche TelekomEDFErnst & YoungErste Bank GroupGDF SuezGEGoldman SachsGoogleMicrosoftNovartisNYSE EuronextPfizerQualcommRenaultSamsung ElectronicsSolvaySyngenta

Institutional members

Banque de FranceCaisse des DépôtsDanmarks NationalbankEuropean Bank for Reconstruction and

DevelopmentEuropean Investment BankNational Bank of Poland

Members as of March 2012. For further information about Bruegel’s governance and its relationship with itsmembers, see page 14.

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BRU EGE L’ S M I S S I ON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

C H A I R M A N ’ S M E S S A GE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

D I R EC TOR ’ S I N T RODUC T I ON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

BRU EGE L’ S R E S E A R C H I N FO C U S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

M E D I A A N D COM M U N I C AT I ON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

F U N DE D R E S E A R C H P ROJ EC T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0

T E A M DE V E LOP M E N T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3

GO V E R N A NC E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4

F I N A NC I A L S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6

A U D I TOR ’ S R E P OR T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 0

BRU EGE L’ S P EOP LE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1

Contents

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Bruegel’s missionBRU EGE L A I MS TO CON T R I BU T E TO T H E QU A L I T Y OF ECONOM I C

P OL I C Y M A K I NG I N EU ROP E T H ROU GH OP E N, FA C T- B A S E D

A N D P OL I C Y- R E LE VA N T R E S E A R C H , A N A LY S I S A N D D I S C U S S I ON.

Bruegel is defined by five key features:

Outward-oriented focus. Bruegel aims to con-tribute to a better understanding of the eco-nomic challenges and responsibilities facingEurope in the context of globalisation.

Evidence-based policy recommendations.Bruegel does not stand for any particularpolicy doctrine. Its research draws on state-of-the-art analysis to assess economic transfor-mations, discuss policy options and proposerecommendations – while always keeping aneye on their practical feasibility.

Demand-driven questions, independentanswers. Bruegel’s Research Programme is setby the Board, which represents the diversity ofBruegel’s stakeholders. Decisions on newresearch projects follow extensive discussionswith Bruegel’s members. Once a research topicis chosen, however, research and publications

are fully independent. All publications arereleased under the signature of theirauthor(s), and Bruegel itself abstains fromtaking any policy positions.

Linking government, research, business andcivil society. Bruegel provides a forum forinformed policy discussions between individu-als from diverse backgrounds. Bruegel alsoaims to cooperate with leading European andinternational research institutions on specificresearch projects.

European reach. Bruegel addresses topics forwhich policy responsibility rests with individ-ual states, the European Union, orinternational organisations. It is developing itspresence in national debates across Europe,as well as Brussels and international discus-sion forums.

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Chairman’s message

If there was ever a time forfrank appraisals, analyticallysound evaluations, and out-of-the box ideas, it was 2011.Had Bruegel not been in exis-tence, it would have beenopportune to create it to help

contribute to the quest for solutions to theEuropean crisis. Fortunately it was already upand running and was able to take part in thepolicy discussion.

Bruegel has not been short of proposals, eval-uations and comments. Some of them elicitedinterest, some of them controversy, and someboth interest and controversy – it is the role ofthink tanks to question the consensus andindicate alternatives. Bruegel has also servedas a venue for the type of in-depth discussionsbetween experts, policymakers and practition-ers that help clarify issues and outline solu-tions. I am very happy that Bruegel was ableto fulfil its role in these particularly momen-tous times, for the benefit of its members, thepolicy community and the wider public.

These achievements are increasingly recog-nised beyond the borders of Europe. In 2011,Bruegel was placed third in the global rankingof international economic policy think tanksby the authoritative Think Tank and CivilSociety Program of the University ofPennsylvania, just behind the PetersonInstitute for International Economics (PIIE)and the Brookings Institution. I am proud thatwe are now seen as being in the same leagueas these two famous Washington-based insti-tutions, which served as models in the earlydays of Bruegel and with whom we maintainclose cooperation. Bruegel and PIIE have

already organised several joint conferencesand published four joint books – most recentlyan account of the simulation game we organ-ised jointly in summer 2011 to map how theeuro-area crisis might develop, which yieldedsignificant insights. Bruegel also regularlycontributes to exchanges between think tanksfrom G20 countries within the framework ofBrookings’ Global Economy programme.

Over the years Bruegel has also developedstrong links with partners in Asia. The Asia-Europe Economic Forum (AEEF) it co-createdin 2006 with Chinese, Japanese and Koreanpartners, has since held seven conferences inBeijing (twice), Brussels, Kiel, Paris, Seoul andTokyo. The AEEF has helped to stress the rele-vance of the neglected side of the NorthAmerica-Europe-Asia triangle and to fostersubstantial exchanges on issues of majorimportance such as, recently, the potentialimpact of the euro-area crisis on the rest ofthe world. Furthermore, Bruegel has developedinitiatives on global matters, which resultedinter alia in two G20 conferences in Delhi andthe creation of a dedicated G20 online forum.

Much remains to be done, however. Bruegel’sglobal outlook is in its DNA, and this dimensionis more germane to Bruegel’s activity thanever. Europe is involved in a struggle to rescueand redefine itself, but despite this, or indeedbecause of it, it cannot afford to becomeimmersed in its own travails and overlook themomentous transformations in the worldeconomy. It is central to Bruegel’s mission tohelp counter the closing of minds on our conti-nent and Europe’s slide into global irrelevance.

Leszek Balcerowicz

‘ BRU EGE L’ S GLOB A L OU T LO OK I S I N I T S DN A , A N D T H I S D I M E NS I ON I S

MOR E GE R M A N E TO BRU EGE L’ S A C T I V I T Y T H A N E V E R ’ .

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Director’s introduction‘ T H I S H A S BE E N A N ECONOM I S T ’ S MOM E N T – BU T A L S O A

MOM E N T FOR R E S P ONS I B I L I T Y ’ .

Most of those who drive onthe roads do not have adetailed grasp of themechanics of their car; theydo not have to know muchabout it as long as the vehi-cle works as it should. But

once they find themselves broken down by theside of the road and open the bonnet, theymust try to remember what all the engine’svarious components are for, and they mustfind out which of them is in need of repair. Thisis the situation European policymakers had toface in 2011 when the crisis, which started inthe European periphery, moved to the core andthreatened the very integrity of the euro area.Like the puzzled driver, they had to answerfrightening questions about what had goneseriously wrong and what types of repair theyhad to give priority to1.

This has been an economist’s moment – oneof those rare instances when even the mostpractically oriented people pause to ask them-selves what underpins the policy system theyare used to and what they should start doingdifferently. The acuteness of the crisis calledfor lucid assessments, thorough analyses andinnovative proposals. Our scholars andBruegel as a team have endeavoured to pro-vide all three. Some of the resulting outputwas hotly debated: this was the case for theassessment of Greek debt sustainability wepublished in February 2011, or for the BlueBond proposal which, though published inspring 2010, elicited much discussion andcomment in 2011.

This has also been a moment for responsibil-ity. Beyond the indispensable ‘ruthless truth-

telling’ the role of a think tank is to help mapout risks and outline options in a way whichpolicymakers struggling with overwhelmingcurrents can find useful for taking action.Academics have the duty and the privilege ofaiming at the advancement of knowledgewhatever it may imply, but think tankers arehere to build bridges between different worlds.Again, we have done our utmost to play thisrole by providing a venue for exchange and thequest for solutions. At the request of theInternational Monetary Fund, we also had theopportunity to conduct an evaluation of IMFsurveillance of the euro area in the run up to,and the early moments of, the euro crisis.

In the end, the fate of the euro and the futureof Europe are likely to be decided on the eco-nomic front. No treaty and no firewall will beable to ensure the stability of the euro, letalone its success, if southern Europe does notregain competitiveness, if public financesremain on an unsustainable course, if growthdoes not return and if unemployment does notabate. Bruegel should therefore not lose sightof the slow-moving undercurrents that deter-mine economic performance.Rather, it shoulddevote more effort to determining how innova-tion, competition and regulation may help tobuild sustained recovery, it should assess thecontribution of energy and climate policies tosustainable growth, and it should proposeavenues for the rebalancing of the Europeaneconomy. This agenda has only gained inimportance with recent events.

Jean Pisani-Ferry

1. Credit to Xavier Musca for this comparison.

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Bruegel’s research in focus

BRUEGEL RESEARCH OUTPUT INCREASEDMARKEDLY IN 2011 and exceeds any previousyear’s output. The table below provides anoverview of the number of publications byresearch area and year. The table does nottake account of publications in non-Bruegeljournals or books by Bruegel fellows. In 2011,Bruegel research output amounted to 43 publi-cations (Blueprints, Policy Briefs, PolicyContributions or Working Papers).

In terms of research areas, the largest numberof publications was in the area of EuropeanMacroeconomics. This is followed by GlobalEconomics, then by Competition, Innovationand Sustainable Growth and finally by Financeand Financial Regulation.

For European Macroeconomics, 2011 was abusy year. The frequency of shocks and thedeepening of the crisis led Bruegel fellows toadapt their research plans to the most press-ing issues. In addition, the trade-off betweenshort-term commentary and more long-termresearch has been particularly daunting. Oneof the most successful papers of the year was

A comprehensive approach to the euro areadebt crisis by André Sapir, Jean Pisani-Ferryand Zsolt Darvas (Policy Brief, February 2011)– it was downloaded more than 20,000 times.

A major and innovative simulation game andconference was organised, that helped to gainimportant insights into the euro-area crisis.The simulation game also helped to signifi-cantly raise Bruegel’s profile in a number ofimportant stakeholder circles. Bruegel alsopublished an evaluation study of InternationalMonetary Fund surveillance of the euro area.The preparation of the study, which was doneat the request of the IMF, involved discussionswith senior policymakers and the study waspresented in The Hague, Madrid, London,Brussels and Berlin. Finally, Bruegel led thedebate on the issue of a fiscal union with aPolicy Brief What kind of fiscal union?, byBenedicta Marzinotto, André Sapir andGuntram B. Wolff (November 2011), in which atax revenue authority at a federal level wasproposed in order to backstop the financialsystem and help countries in need.

Bruegel: publications by research area

2007 2008 2009 2010 2011

European macroeconomics 4 7 15 9 16

Global economics 3 10 7 2 11

Finance and financial regulation 4 2 7 7 6

Competition, innovation and sustainable growth 3 4 7 7 10

Firms and competitiveness 2 3 3 3 n/a*

Total by year 16 26 39 28 43

* This research area was merged with ‘competition, innovation and sustainable growth’.In the case where a publication falls between two research areas, it is only counted in one of the two, even thoughsome papers cut across two research areas.

In the Global Economics research area, outputwas relevant and timely with a number of con-tributions on the international monetarysystem (Global currencies for tomorrow: aEuropean perspective, Bruegel Blueprint 13, areport prepared jointly with CEPII, Paris, at therequest of the European Commission) and theG20, and assessments of the transatlanticdebates on the right policy responses. Anumber of conferences were also held withinthis research area, bringing together key poli-cymakers and academics to discuss transat-lantic economic challenges as well asAsian-European issues.

In the area of Finance and FinancialRegulation, a number of papers were pub-lished, including on rating agencies and globalaccounting standards. The EU crisis, with afocus on bank crisis management and resolu-tion, was the subject of testimony by Bruegelfellow Nicolas Véron to the US Senate.Moreover, research on a longer-term project fora book on financial regulation, supervision andresolution of global financial firms has begun.A further study by Guntram Wolff investigatedthe impact of sovereign bond holdings onbanking performance. Some projects in thisresearch area have been delayed, partly due tothe appointment of one visiting fellow to

become acting president of the EuropeanSchool of Management and Technology (JörgRocholl). Research and commentary was pre-sented in numerous international conferences.Bruegel also organised and hosted confer-ences and workshops in this research area.

Finally, in the Competition, Innovation andSustainable Growth, several papers on energyand environmental issues by Georg Zachmannwere published. There was also one paper inthe area of science and innovation policy anda number of papers on competition and inno-vation authored by Reinhilde Veugelers. Anumber of workshops, in particular on energy,were held at Bruegel.

2011 was also the year in which criticalinsights from the EFIGE project on the interna-tionalisation of European firms started to bereleased. The EFIGE team published tworeports, respectively on the global operationsof European firms, and on their behaviourduring the crisis. In addition, several researchpapers were published giving insights into thefirm-level determinants of competitiveness.

Overall, Bruegel fulfilled its research plans for2011.

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MEDIA AND COMMUNICATION

Media impact

2011 was another good year of media out-reach for Bruegel. Our media presence grew by89 percent to 3584 mentions across morethan 80 countries. Of these mentions, almosthalf were published in Bruegel’s target media:selected outlets with a higher concentration ofBruegel audiences, and therefore a more effec-tive channel to reach them.

Looking at the geographical spread Bruegelmade good progress in all national capitalswhere the number of mentions increased sub-stantially, especially in the EU7 biggest coun-tries. Bruegel has prominent presence ininternational media (ie media with readershipin more than one region), where the number ofmentions increased by 90 percent to 469 in2011, compared to 248 mentions the previousyear.

Similarly, Bruegel remains strong in the keyinternational media (Financial Times, NewYork Times, International Herald Tribune, WallStreet Journal, The Economist and Time),where the number of mentions grew by 40percent to 178 mentions in the twelve monthsto 31 December 2011.

More importantly, the quality of the mediamentions has improved, not just in terms oftarget audience outreach, but in terms of thetype of the mentions: more than 40 percent ofthe mentions in target media were either com-ment pieces, substantial mentions or inter-views. The number of comment pieces byBruegel scholars published in target mediaincreased by 87 percent to 247 in 2011,which contributes to a better promotion ofBruegel’s ideas.

In terms of the format of media mentions, weobserved a great increase in the number pub-

lished online, where the mentions have grownby a considerable amount. This shows thatthere is a good opportunity to developBruegel’s presence online and to engage infurther online activities such as blogs andonline videos, which we are developing.Additionally Bruegel has continued improvingits presence in the broadcast media with morethan 324 interviews produced for TV and radio.

Website

Bruegel’s website is the backbone of its dis-semination strategy as it serves as a reposi-tory of all Bruegel publications, published andarchived online. During 2011 we worked toimprove several website functionalities andfocused on linking back all our activities to thewebsite, which saw a 40 percent increase inunique visitors in 2011.

During 2011 we launched and developed ourpresence on Twitter, where the number of fol-lowers reach 1500 by the end of 2011, and weare currently observing a 3 percent monthlygrowth. This has helped not only to drive trafficto the website but also to spread our audiencebase.

Looking at geographical spread, most visits tothe website came from Europe and the UnitedStates. However, the website recorded hitsfrom more than 120 countries, reflecting therelevance of Bruegel’s research beyond Europeand the US. More importantly, the 2011 figuresshow a much more diverse spread than in2010, when visits were clearly more concen-trated in fewer countries.

It is interesting to note that visits to the web-site peaked in November due to the highinterest generated by the launch of severalcomment pieces on the European crisis andmore specifically on the Greek situation, whichshows the ability of Bruegel to react to break-ing issues.

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FUNDED RESEARCH PROJECTS

Bruegel benefits from a number of fundedresearch projects, with funds coming frominternational or European institutions and pri-vate entities (such as foundations). Thesefunding sources typically cover activities suchas research, project management and dissem-ination. They are chosen primarily on their fitwith Bruegel’s research programme. This typeof funding represented about 23 percent ofBruegel’s funding in 2011.

For the financial contribution of each project,please see the Financials section of thisAnnual Report, and the projects and grantsannex which lists all the projects and theirfinancial contribution to Bruegel’s 2011revenue.

Grants awarded to Bruegel in 2011:

Project name: SIMPATIC ‘Social IMpact PolicyAnalysis of Technological InnovationChallenges’.Project in partnership with: KU-Leuven, UNI-MAAS-MERIT, SEURECO, ICCS, UCM, FPB,Imperial, IER.Description: The objective of SIMPATIC is to pro-vide policy makers with a comprehensive andoperational tool box allowing for a betterassessment of the impact of research andinnovation policies in Europe. Project duration: 3 yearsFunding organisation: European Commission,Directorate General for Research

Project name: S-GAME ‘Simulation Game’Project in partnership with: The PetersonInstitute for International Economics (PIIE) Description: The Peterson Institute forInternational Economics (PIIE) organised aconference and performed a simulation gamewith former senior policy makers (no currentlysitting officials), bankers, rating agencies andpolitical analysts of Greece, Ireland, Portugal,Spain, France and Germany. The aim of thesimulation exercise was to gain insights intohow future developments of the euro-area

crisis could look like and what could be thedynamics of decision-making.Project duration: 3 monthsFunding organisation: PIIE.

Project name: Development of New Energy andTransport Infrastructure to match Europe 2050Energy Agenda.Project in partnership with: ESMTDescription: Policy recommendation on thepublic support for deployment of new energyand transport infrastructure needed to meetthe 2050 Energy Agenda.Project duration: August 2011 - October 2011Funding organisation: Fuel Cells and HydrogenJoint Undertaking.

Project name: Public Diplomacy, PolicyResearch and Outreach devoted to the EU andEU-Korea relations.Project in partnership with: Korean Institute ofFinance (KIF).Description: Analysis of the crisis response ofEU and Korea in terms of fiscal, monetary andfinancial policies; Assessment of possible EU– Korean cooperation on the specific policyissues.Project duration: August 2011 - December2012.Funding organisation: European Commission,Directorate General for Service for ForeignPolicy Instruments.

Project name: Determinants of productivitygrowth in Europe.Description: Better understanding of the longterm determinants of economic growth, and inparticular the contribution of R&D expendi-tures on growth.Project duration: May 2011 - December 2011.Funding organisation: European InvestmentBank (EIB).

Project name: Provision of expertise in globalfinancial reform after the crisis.Description: Contribution to KIEP volumeChanges in the international economic ordersince the financial crisis. Project duration: May 2011 - October 2011.

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Funding organisation: Korea Institute forInternational Economic Policy (KIEP).

Project name: The Role of the EuropeanParliament in the European Semester.Description: Assessment of the principlesbehind the European semester and its work inpractice and analysis of the role of theEuropean Parliament in the European semes-ter, along with national parliaments, and howto better design the role of the EuropeanParliament.Project duration: March 2011 - June 2012.Funding organisation:: European Parliament’sCommittee on Economic and Monetary Affairs.

Project name: Evaluation of IMF Euro area sur-veillance.Description: Analysis of a set of explicit issues(country, euro-area wide, surveillance processissues), and focus on country cases, relevantfor addressing these issues.Project duration: March 2011 - June 2011.Funding organisation: International MonetaryFund.

Project name: Further lessons from ICT innova-tive industries (FLY).Description: Analysis of recent IPTS micro-levelstudies on emergent innovative ICT technolo-gies and assessment on the capacity of theEuropean industry to stay competitive in therelated markets.Project duration: January 2011 - November2011.Funding organisation: European Commission,Joint Research Centre, Institute forProspective Technological Studies (IPTS).

Projects conducted during 2011 with grantsawarded in 2010

Project name: Study on reform options for theglobal reserve system and their implicationsfor the EU economy.Project in partnership with: Centre d'EtudesProspectives et d'Informations Internationales(CEPII).Description: Develop, analyse and evaluatedifferent options for reform and/or scenariosfor plausible market-driven developments ofthe global reserve currency system.Project duration: September 2010 - September2011.Funding organisation: European Commission,Directorate General for Economic and FinancialAffairs.

Project name: Development of the Asia EuropeEconomic Forum.Project in partnership with: Centre d'EtudesProspectives et d'Informations Internationales(CEPII), Center for Economic Policy Research(CEPR), Asian Development Bank Institute(ADBI).Description: Following the success of the AEEFin 2006-2009, DG ECFIN agreed to grant fund-ing to strengthen the partnership by settingup a formal network which would support theorganisation of a 2010 and two 2011 confer-ences and the setting up of disseminationactivities. Funding has also been given to theAEEF partners: CEPR through their FP7 PEGGEDproject; ADBI; French Ministry of Finance andKorean Embassy.Project duration: January 2010 - December2011Funding organisation: European Commission,Directorate General for Economic and FinancialAffairs; European Commission, DG Research(FP7 PEGGED project); Asian DevelopmentBank.

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Projects conducted during 2011 with grantsawarded in 2009

Project name: Assessing the FinancialLandscape and Formulating Milestones forMonetary and Financial Integration in ASEAN(Association of Southeast Asian Nations)Phase 2.Description: Analysis of the European experi-ence of financial integration, principally in thearea of banking services, and identification ofthe relevant lessons for ASEAN financial andeconomic integration.Project duration: January 2011 - August 2011.Funding organisation: Asian DevelopmentBank (ADB).

Project name: The Transatlantic Relationship inan Era of Growing Economic Multipolarity.Project in partnership with: the PetersonInstitute for International Economics (PIIE).Description: Identify and analyse the dynam-ics of the economic and political subject areasthat will in the coming years dominate thepolicy agenda of both the external EU-U.S.engagement with major emerging economies,as well as bilaterally across the Atlantic.Project duration: January 2010 - December2011.Funding organisation: European Commission,Directorate General for External Relations.

Project name: Provision of external expertisein monetary and economic policies.Description: Provision of briefing notes whichgive a critical and independent analysis of themonetary policy of the European Central Bankas well as evaluate general issues in connec-tion with monetary, economic and fiscal poli-cies in the EU.Project duration: September 2009 - August2014.Funding organisation: European Parliament –Economic and Scientific Policy Department.

Project name: Strategic Partnership agreementwith the German Marshall Fund.Description: The strategic partnership is toleverage Bruegel’s intellectual expertise, GMF’sconvening capabilities and networks inWashington and across Europe, and GMF’sgrowing in-house expertise across possibleprogramme areas: Financial Crisis; Central andEastern European (CEE) economies and eco-nomic relations with the CEE countries; cli-mate change policies and competitiveness.Another topic may be added.Project duration: January 2009 - December2011.Funding organisation: German Marshall Fund.

Projects conducted during 2011 with grantsawarded in 2008

Project name: EFIGE, European Firms in aGlobal Economy: internal policies for externalcompetitiveness.Project in partnership with: Universidad CarlosIII (Madrid); Centre for Economic PolicyResearch (London); The Institute for AppliedEconomic Research (Tubingen); Centro StudiLuca d’Agliano (Milan); UniCredit (Milan);Centre d’Etudes Prospectives et d’InformationInternationales (Paris); The Institute ofEconomics of Hungarian Academy of Sciences(Budapest).Associate partners: Bank of France; Bank ofItaly; Bank of Spain; Bundesbank; NationalBank of Belgium; OECD.Description: Assessment of the internationali-sation patterns of European firms through thecreation of a pilot dataset, based on survey offirm-level data in seven countries (AT, FR, DE,HU, IT, ES, UK).Project duration: September 2008 - September2012.Funding organisation: European Commission,Directorate General for Research.

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Team Development

The following individuals joined Bruegel during2011:

Dana Andreicut, Research Assistant, joinedBruegel in September. She holds an MSc inEconomics and Philosophy from the LondonSchool of Economics. Her research interestsare European macroeconomics and economicphilosophy.

Chiara Angeloni, Research Assistant, joinedBruegel in October. She has a Masters inEconomics and Social Sciences from BocconiUniversity. Her research interests include inter-national Economics and macro economics.

Anna Grabowska, Research PartnershipsOfficer, joined Bruegel in April after working asan intern. She holds a Masters Degree inManagement, Finance and Accountancy fromthe University of Warsaw. Her experienceincludes the National Bank of Poland, SiemensA.G. and the Permanent Representation ofPoland to the EU.

Ioana Leu, Communications Officer, joinedBruegel in November, after working as anintern. She holds a Masters in MultilingualCommunication Applied in InternationalRelations from the Université Libre deBruxelles.

Hendrik Meder, Research Assistant, joinedBruegel in September. He is studying for aDoctorate in Economics at KU Leuven, and hasa Masters from the University of Antwerp withKU Leuven. His research interests are competi-tion policy, industrial organisation and microe-conometrics.

Silvia Merler, Research Assistant, joinedBruegel in May. She holds a Masters Degree inEconomics and Social Sciences from theBocconi University. Her research interests liein macro economics, especially European eco-nomic policy.

Marco Ricorda, Communications Officer, joinedBruegel in March, after an internship with theCommunications team. He holds a Masters inEuropean Studies from the University ofMaastricht.

Mimi Tam, Research Assistant, joined Bruegelin September. She has an MSc in Economicsfrom the Barcelona Graduate School ofEconomics. Her research interests includegame theory, decision theory, industrial orga-nisation, competition and energy policy.

Guntram B. Wolff, Deputy Director, joinedBruegel in March. He holds a PhD from theUniversity of Bonn and also studied economicsin Toulouse, Pittsburgh and Passau. Before joi-ning Bruegel he worked for the InternationalMonetary Fund, the European Commission andthe Deutsche Bundesbank. As well as manage-rial responsibilities, his research focuses onthe euro-area economy and governance, onfiscal policy, global finance and Germany.

Bruegel is also grateful to all those who com-pleted internships during 2011: Milena Mathé,Anna Pfitzer, Dmytro Naumenko, and RickardHammarberg.

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GovernanceBRU EGE L’ S GO V E R N A NC E F R A M E W OR K I S DE S I GN E D TO E NS U R E BOT H

T H E I N DE P E N DE NC E OF I T S R E S E A R C H A N D I T S R E LE VA NC E TO D I V E R S E

S TA K EHOLDE R S .

Bruegel is a Belgian international non-profitassociation (Association Internationale SansBut Lucratif), under the number 0867636096,with its registered office at Rue de la Charité33, B-1210 Brussels. The basis for its gover-nance is formed by its statute and bylaws,both of which can be downloaded fromBruegel’s website.

In 2011, the association had three categoriesof member. State Members are governments ofmember states of the European Union whichhave chosen to join Bruegel; CorporateMembers are international firms whoserequest for membership has been approved byBruegel’s Board; and Institutional Memberscurrently include Banque de France, Caissedes Dépôts, Danmarks Nationalbank, theEuropean Bank for Reconstruction andDevelopment, the European Investment Bankand Narodowy Bank Polski (National Bank ofPoland).

Each member appoints a Senior ContactPerson and an Alternate, who represent themember in Bruegel’s governance bodies. Thedetails of members’ financial contributions aregiven in the ‘Financials’ section of this report.

The General Assembly is Bruegel’s highest gov-erning body, which consists of all members.The General Assembly is complemented by‘Groups’, which are formed, respectively, byBruegel’s state and corporate members.

The General Administration Body (organe d’ad-ministration générale under Belgian law) isthe Board, which is entrusted with broaddecision-making powers, including senior

recruitments and the research programme.

The Board has no responsibility for publica-tions and policy positions. In 2011, theGeneral Assembly met on 22 June for its statu-tory annual meeting and again on 7 Decemberto agree subscription levels for 2012 andapprove the budget. The Group of States andGroup of Corporate Members also met on thesame days.

Bruegel’s Board met three times in 2011, on28 April, 22 June and 23 November. It has twoestablished sub-committees, the AuditCommittee chaired by Helen Wallace and theCompensation Committee chaired by LeszekBalcerowicz.

The Scientific Council consists of eight interna-tionally recognised economists, appointed bythe Board for a three-year mandate. It advisesBruegel’s Board, Director and Deputy Directorand assesses the scientific quality ofBruegel’s output. The Scientific Council’s chairis Giuseppe Bertola.

Bruegel’s Research Programme is currentlyprepared annually. Based on extensive consul-tation with Bruegel’s members, including atleast one plenary meeting of members’ SeniorEconomists (in December), a draft programmeis prepared by Bruegel’s staff, sent to mem-bers for consultation, and proposed to theBoard together with the members’ feedback.

The Board then adopts a research programme.All of Bruegel’s research programmes since2006 can be obtained from Bruegel’s website.

P A G E 1 4 B R U E G E L’ S A N N U A L R E P O R T 2 0 1 1

Transparency and integrity

Bruegel’s public Statement on ResearchIntegrity, adopted by the Board in May 2006,is also available on Bruegel’s website. Thestatement sets rules for the avoidance ofpolitical, national or commercial conflicts of

Further information:

For links to Bruegel’s statutes, previous annual reports and research programme, see:http://www.bruegel.org/about/governance-and-funding and http://www.bruegel.org/research

interest which could harm the integrity ofBruegel’s research. Bruegel’s researchers,including visiting fellows and senior staff, prom-ise to abide by this statement when they signcontracts with Bruegel. They also make anannual declaration of interests to avoid any con-flict of interest in the areas in which they work.

B R U E G E L’ S A N N U A L R E P O R T 2 0 1 1 P A G E 1 5

ASSETS

FIXED ASSETS

Furniture and office equipmentIT development

CURRENT ASSETS

Trades receivablesOther debtorsFunded project receivables

CASH AND FINANCIAL ASSETS

DEFERRALS AND ACCRUALS

Deferred rentDeferred insuranceOther deferrals

TOTAL ASSETS

LIABILITIES

CURRENT LIABILITIES

Trade payablesVAT payablePrepaid incomeRemuneration and social security payablesFunded project creditorsAccrued charges

NET ASSETS

NET ASSETS

ReservesSurplus/loss for the yearAccumulated reserves

TOTAL LIABILITIES AND NET ASSETS

B A L A N C E S H E E T 2 0 1 1 - 2 0 1 0

185,502.5050,500.44

414,810.26200,679.79176,931.36

10,374.22

177,070.7662,591.34

100,000.00170,686.03

18,493.920.00

230,566.472,041,162.57

236,002.94

792,439.41

1,761,754.52

10,374.22

2,800,571.09

528,842.05

2,271,729.04

2,800,571.09

Financial statements

2 0 1 0

283,704.9438,202.03

244,850.1112,600.00

45,963.69

11,761.28

190,445.35408,834.30162,500.00176,207.03415,703.88

7,500.00

-487,940.152,529,102.72

321,906.97

257,450.11

2,765,271.08

57,724.97

3,402,353.13

1,361,190.56

2,041,162.57

3,402,353.13

2 0 1 1

P A G E 1 6 B R U E G E L’ S A N N U A L R E P O R T 2 0 1 1

REVENUE

Subscriptions – State members (Annex 1)Subscriptions – Corporate members (Annex 1)Subscriptions – Institutional members (Annex 1)

Other revenueHonorariaProject-based funding (Annex 2)Foundation grants (Annex 2)Sales of publicationsFinancial income (gross)Other income

TOTAL REVENUE

EXPENSES

Wages and Compensation

Project-related data collection costs (1)

Other operating expensesStaff travel costsExternal research costsDocumentation costsOutreach-related costsOffice rent and running costsExternal professional servicesFinancial charges

Depreciation charges

TOTAL EXPENSESSurplus/deficit before extraordinary chargesWrite-offs and provisions (2)Surplus/deficit after extraordinary charges

2 0 1 0

I N C O M E S T A T E M E N T 2 0 1 1 - 2 0 1 0

69,490.24577,076.31196,178.08

193.729,186.13

56,142.10

-112,125.07-87,649.22-44,171.72

-228,568.88-360,424.58-112,936.65

-4,130.79

2,056,156.00879,167.00112,500.00

900,466.58

3,948,289.58

-2,628,840.23

0.00

-950,006.91

-138,875.97

-3,717,723.11230,566.47-96,296.00

134,270.47

2 0 1 1

18,888.141,399,941.00

175,859.00419.18

8,736.7677,116.53

-136,308.00-43,906.00-37,007.00

-255,646.00-368,286.00-154,701.00

-6,968.00

2,085,864.00889,166.67

87,500.00

1,680,960.61

4,743,491.28

-2,642,776.00

-1,307,090.40

-1,002,822.00

-128,742.00

-5,081,430.40-337,939.12-150,000.00-487,939.12

Notes:(1) Direct costs for the EFIGE survey, outsourced to a third party.(2) Write off: one unpaid corporate subscription 2010. Provision: potential adjustment to the claim for the first reporting period

of the EFIGE project.

B R U E G E L’ S A N N U A L R E P O R T 2 0 1 1 P A G E 1 7

ANNEX 1: CORE FUNDING2011 2010 Notes

Subscriptions – State MembersCategory 1 126,416.00 126,416.00Cyprus 31,604.00 31,604.00Lithuania 31,604.00 31,604.00Luxembourg 31,604.00 31,604.00Slovenia 31,604.00 31,604.00

Category 2 63,208.00 63,208.00Ireland 63,208.00 63,208.00

Category 3 539,164.00 568,872.00Austria 94,812.00 94,812.00Czech Republic 94,812.00 Left at end 2010Denmark 94,812.00 94,812.00Finland 94,812.00 94,812.00Greece 65,104.00 New member in 2011Hungary 94,812.00 94,812.00Sweden 94,812.00 94,812.00

Category 4 379,248.00 379,248.00Belgium 126,416.00 126,416.00Netherlands 126,416.00 126,416.00Poland 126,416.00 126,416.00

Category 5 948,120.00 948,120.00France 189,624.00 189,624.00Germany 189,624.00 189,624.00Italy 189,624.00 189,624.00Spain 189,624.00 189,624.00United Kingdom 189,624.00 189,624.00

Subscriptions – Corporate Members 879167.00 889166.67Areva 50,000.00 50,000.00BNP Paribas Fortis 50,000.00 Left 2010BP 50,000.00 Left 2010Deutsche Bank 50,000.00 50,000.00Deutsche Telekom 50,000.00 50,000.00EDF 50,000.00 50,000.00Ernst & Young 50,000.00 35,000.00 Joined 2010Erste Bank 50,000.00 41,666.67 Joined 2010France Telecom 50,000.00 Left 2010GDF Suez 50,000.00 50,000.00Goldman Sachs 50,000.00 50,000.00Google 50,000.00 25,000.00 Joined 2010Microsoft 50,000.00 8,333.33 Joined 2010Novartis 50,000.00 50,000.00NYSE Euronext 12,500.00 Joined 2011Pfizer 50,000.00 50,000.00Qualcomm 50,000.00 29,166.67 Joined 2010Renault 50,000.00 50,000.00Samsung 50,000.00 50,000.00Solvay 16,667.00 Joined 2011Syngenta 50,000.00 50,000.00Unicredit 50,000.00 50,000.00

Subscriptions – Institutional Members 112,500.00 87,500.00Banque de France 12,500.00 Joined 2011European Investment Bank 50,000.00 50,000.00European Bank for Reconstructionand Development

50,000.00 37,500.00 Joined 2010

P A G E 1 8 B R U E G E L’ S A N N U A L R E P O R T 2 0 1 1

B R U E G E L’ S A N N U A L R E P O R T 2 0 1 1 P A G E 1 9

ANNEX 2: PROJECTS AND GRANTS2011 2010 Notes

Income for research activities from public organisations577,076.31

EFIGE project (1) 217,699.89European Parliament ECON Committee 12,500.00TRAREL project (2) 52,934.27IPTS project (2) 49,700.00IMS project (3) 36,019.61International Monetary Fund 40,961.94European Parliament 40,240.00European Investment Bank 15,000.00EU-Korea project (2) 29,126.60FCH project (4) 60,444.00ASEAN project (Asian Development Bank) 22,450.00The European Commission also directly funded €60,000 worth of travel costs to the Asia Europe Economic Forum, Seoul, 9 December 2011

Income for research activities from private organisations196,178.08

German Marshall Fund Strategic Partnership 111,284.22Euro simulation game project (5) 47,160.74FCH project (4) 60,444.00

Notes:(1) European Commission, Seventh Framework Programme for Research & Development.(2) Funded by DG RELEX, European Commission.(3) Funded by DG ECFIN, European Commission.(4) 50 percent funded by the European Commission, 50 percent by private consortium.(5) Funded through the Peterson Institute.

Auditor’s reportMarie-Chantal DEBROUX-LEDDETRéviseur d’entreprisesAvenue Jean-François Debecker, 114, 1200 Brussels, BelgiumTel. 00 32 2 775 88 20 • Email: leddet.mc@debroux.be

AISBL International AssociationBRUEGEL, Rue de la charité, 33 - 1210 Brussels - Belgium

STATUTORY AUDITOR’S REPORT FOR THE YEAR ENDED DECEMBER 31, 2011to the General Assembly of the International Association to be held in March 2012

In accordance with the legal and statutory requirements, we report to you on the performance of the mandate of statutory audi-tor, which has been entrusted to us. This report contains our opinion on the true and fair view of the financial statements as wellas the required additional statements and information.

Unqualified audit opinion on the financial statements

We have audited the financial statements for the year ended 31 December 2011, prepared in accordance with the financial report-ing framework applicable in Belgium, which show a balance sheet total of €2,800,571.09 and a surplus for the year of€230,566.47.

Management is responsible for the preparation and the fair presentation of these financial statements. This responsibilityincludes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financialstatements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate account-ing policies; and making accounting estimates that are reasonable in the circumstances.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accor-dance with the legal requirements and the Auditing Standards applicable in Belgium, as issued by the Institute of RegisteredAuditors. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial state-ments are free from material misstatement, whether due to fraud or error.

In accordance with the above-mentioned auditing standards, we considered the association’s accounting system, as well as itsinternal control procedures. We have obtained from management and from the association's officials the explanations and infor-mation necessary for executing our audit procedures. We have examined, on a test basis, the evidence supporting the amountsincluded in the financial statements. We have assessed the appropriateness of accounting policies and the reasonableness of thesignificant accounting estimates made by the association as well as the overall financial statement presentation. We believe thatthese procedures provide a reasonable basis for our opinion.

In our opinion, the financial statements for the year ended December 31, 2011 give a true and fair view of the association’s assetsand liabilities, its financial position and the results of its operations in accordance with the financial reporting framework applica-ble in Belgium.

Additional statements and information

The compliance by the international association with the Law of 27 June 1921 related to non profit associations, international not-for-profit associations and foundations is the responsibility of management.

Our responsibility is to supplement our report with the following additional statements (and information), which do not modify ouraudit opinion on the financial statements:

• Without prejudice to formal aspects of minor importance, the accounting records were maintained in accordance with the legaland regulatory requirements applicable in Belgium.

• There are no transactions undertaken or decisions taken in violation of the association's statutes or the Law of 27 June 1921related to not-for-profit associations, international non profit associations and foundations that we have to report to you.

Brussels, 15 March 2012

Marie-Chantal DEBROUX-LEDDETCertified Auditor

P A G E 2 0 B R U E G E L’ S A N N U A L R E P O R T 2 0 1 1

BOARD

Leszek Balcerowicz, Chairman of Bruegel,Professor of Economics, Warsaw School ofEconomicsJosé Manuel Campa, Professor of FinancialManagement, IESE Business School, University ofNavarraAnna Ekström, General Manager, Skolverket,Swedish National Agency for EducationJan Fischer, Vice President, European Bank forReconstruction and Development (EBRD) Vittorio Grilli, Vice-minister for economy andfinance, ItalyWolfgang Kopf, Senior Vice President for Public andRegulatory Affairs, Deutsche TelekomRainer Münz, Head of Research & Development,Erste Group; Senior Fellow, Hamburg Institute ofInternational Economics (HWWI)Jim O‘Neill, Chairman, Goldman Sachs AssetManagement (GSAM)Lars-Hendrik Röller, Director General, Economic andFinance Policy, Federal Chancellery, GermanyDariusz Rosati, Professor, Warsaw School ofEconomics; Professor, Ryszard Lazarski Universityof Commerce and Law, WarsawHelen Wallace, Centennial Professor, EuropeanInstitute, London School of Economics and PoliticalScience

SCIENTIFIC COUNCIL

Giuseppe Bertola, Chairman of the ScientificCouncil, Professor of Economics, EDHEC BusinessSchool, FranceSergei Guriev, Morgan Stanley Professor ofEconomics and Rector, New Economic School inMoscowPeter Neary, Professor of Economics, OxfordUniversityLucrezia Reichlin, Professor of Economics, LondonBusiness SchoolDani Rodrik, Professor of International PoliticalEconomy, John F. Kennedy School of Government atHarvard UniversityPaul Seabright, Professor of Economics, ToulouseSchool of EconomicsJaume Ventura, Professor, Universitat PompeuFabra, SpainLuigi Zingales, Robert C. McCormack Professor ofEntrepreneurship and Finance, University ofChicago Graduate School of Business

Bruegel’s people

B R U E G E L’ S A N N U A L R E P O R T 2 0 1 1 P A G E 2 1

STAFF (as at 5 March 2012)

DirectorJean Pisani-Ferry

Deputy DirectorGuntram B. Wolff

Research: Resident ScholarsZsolt DarvasBenedicta Marzinotto André Sapir Reinhilde Veugelers Nicolas Véron Georg Zachmann

Research: Non Resident ScholarsPhilippe Aghion, HarvardAlan Ahearne, GalwayJürgen von Hagen, BonnHenrik Horn, StockholmDalia Marin, MunichGianmarco Ottaviano, LondonBruno van Pottelsberghe, BrusselsJakob von Weizsäcker, Erfurt

Research: Visiting ScholarsCarlo Altomonte Ignazio Angeloni Michiel Bijlsma Michał GrajekMark Huberty Elliot Posner Jörg Rocholl Shahin Vallée

Research AssistantsDana AndreicutChiara Angeloni Lucia Granelli Hendrik Meder Silvia Merler Mimi Tam

Development, communications, operations, partner-ships management (in alphabetical order):

Director for DevelopmentAndrew Fielding

Matt Dann, Secretary GeneralStephen Gardner, EditorAnna Grabowska, Research Partnerships OfficerIoana Leu, Communications OfficerNaiara Martinez Cabrera, Head of Communicationsand EventsMilena Mathé, Research Partnerships OfficerDelphine Michel, Research Partnerships ManagerSona Patel Amin, Accounting and HR OfficerMarco Ricorda, Communications OfficerSarah Roblain, Administrative and ExecutiveAssistantMatilda Sevón, Events CoordinatorAnn Van Gyseghem, Executive Assistant

P A G E 2 2 B R U E G E L’ S A N N U A L R E P O R T 2 0 1 1

Rue de la Charité 33,B-1210 Brussels, BelgiumTel +32 2 227 4210info@bruegel.orgwww.bruegel.org