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Begin New Search Topic Governance Political Geography Europe Content Type Policy Brief Publication Year within 5 Years Publication Year within 25 Years

1. The longer-term fiscal challenges facing the European Union

Author:
Jeromin Zettelmeyer, Gregory Claeys, Zsolt Darvas, Lennard Welslau, and Stavros Zenios
Publication Date:
04-2023
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The pandemic and subsequent price shocks triggered by Russia’s invasion of Ukraine, have increased longer-term fiscal pressures in the European Union through higher debt, higher expected real interest rates and higher public investment needs. This Policy Brief makes some simple quantitative assessments of those effects and discusses policy implications, with the following results. First, long-term increases in primary fiscal balances required to offset higher debt and higher expected real interest rates are in the range of 0.5 percent to 1.5 percent of GDP for most EU countries. However, because of pre-existing differences in fiscal space, not all countries will need to undertake that adjustment, while some countries may need to adjust by substantially more. Among the 21 EU countries for which we have data to undertake this analysis, 14 will need to adjust by more than they were planning to do by 2025. Second, the required additional fiscal adjustment looks manageable, although it is substantial in some cases. To achieve medium-term debt-reducing primary balances, several EU countries will need to raise primary balances by more than 2 percent of GDP above their 2025 target, but no country will need additional fiscal adjustment of more than 3 percent of GDP. Third, market data suggests that the future path of real interest rates is very uncertain. Compared to the period immediately preceding the pandemic, longer-term expected real interest rates have increased by about 2 percentage points but remain low on average, at about 1 percent in real terms. Future developments depend on whether the structural factors that led to low interest rates in the first place persist or unwind. While interest rates might decline again, fiscal policymakers should not make plans that assume such a decline. Fourth, public spending needs for additional defence and climate spending run well above 1 percent of GDP per year. These needs do not appear to have been incorporated into current fiscal baselines, and hence will come on top of the adjustment described above. To ensure that fiscal adjustment does not defeat its purpose by slowing growth, it is essential that it is conducted gradually. In countries that require such adjustment, it should start as soon as cyclical conditions allow.
Topic:
Governance, European Union, Finance, and Fiscal Policy
Political Geography:
Europe

2. How Europe should answer the US Inflation Reduction Act

Author:
David Kleimann, Niclas Poitiers, André Sapir, Simone Tagliapietra, Nicolas Veron, Reinhilde Veugelers, and Jeromin Zettelmeyer
Publication Date:
02-2023
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The 2022 United States Inflation Reduction Act (IRA) is a significant and welcome climate law. It also includes trade-distortive subsidies, including local-content requirements prohibited under World Trade Organisation rules – the first time the US has done this and a blow to the international trading system that could trigger protectionism in other countries. The expected IRA green subsidies are of similar size to those available in the European Union, except in renewable energy production, where EU subsidies remain far larger. However, there are important qualitative differences. Some IRA subsidies discriminate against foreign producers while EU subsidies do not. IRA clean-tech subsidies are simpler and less fragmented, and they focus mainly on mass deployment of green technologies rather than innovation. The IRA will likely harm Europe through its competitiveness effect, while it will likely benefit climate transition in Europe and most of the rest of the world. However, the magnitude of both effects is very uncertain, partly because the IRA will induce substitution away from Chinese inputs. By forcing the reorganisation of supply chains, the IRA may make the EU and other economies more competitive relative to China. It may also initially slow the green transition. But in the longer run, this effect should be outweighed by the reduction in the cost of clean tech driven by the IRA. In responding to the IRA, the EU should not just seek to protect its competitiveness relative to the US but to pursue broader aims, including competitiveness in general, speedy decarbonisation and broad foreign policy and development policy goals. These aims imply that the EU should not impose local-content requirements of its own, should not loosen state-aid rules and should not mimic the IRA’s approach to manufacturing subsidies. Rather, it should focus on boosting its structural competitiveness, formulate a trade policy response that includes reform of the international subsidies regime, and develop an instrument for EU-level subsidies that focuses on early-stage development and increasing EU resilience to trade disruptions.
Topic:
Governance, European Union, Inflation, and Trade
Political Geography:
Europe

3. US-EU climate change industrial policy: Pulling in different directions for cooperation, competition, and compromise

Author:
Cordelia Buchanan Ponczek
Publication Date:
08-2023
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The United States and the European Union agree on prioritizing policies to address climate change, which includes securing supply chains for components essential to low-carbon technology. Despite this agreement, their policies to address climate change and low-carbon technology could foster competition. The US Inflation Reduction Act (IRA) reflects the competitive advantage of the US to draw in the best talents, capabilities, and resources from outside sources. This leads to a disconnect between the industrial policy benefits of the IRA within the US and the potential competitive impact the IRA has on US relationships with allies. The EU’s policies are shaped by the bloc’s desire to respond to external actors—including China and Russia—while protecting the common market and building up its internal capability to ensure security of supply. This is complicated by individual member-state objectives. The 2024 US presidential election could bring change: A Republican administration might not share the EU’s outlook on climate change, the need for government intervention, or even the close transatlantic relationship seen during the Biden administration.
Topic:
Climate Change, Governance, European Union, Economic Policy, and Geoeconomics
Political Geography:
Europe, Finland, and United States of America

4. The geoeconomics of the hydrogen era: Towards a new global energy architecture

Author:
Timo Behr
Publication Date:
07-2023
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Clean hydrogen is crucial for ensuring the transition to a carbon-neutral economy, and large quantities of it will be needed in the future. The transition from a hydrocarbon to a hydrogen economy will have significant geopolitical and geoeconomic consequences. Due to its unique properties, hydrogen will not become the “new oil”. While oil and gas have encouraged a concentration of power – in the hands of producer countries, major oil companies, and around strategic choke points – hydrogen will favour a dispersion of power. The transition to a hydrogen economy will see strong competition over technologies, raw materials, and regulatory standards. Hydrogen has the potential to make the world energy trading system more balanced, more democratic, and less prone to price fluctuations, but it could equally lead to fragmentation, inadvertently contributing to current geopolitical divisions. For the EU and Finland, the transition towards a hydrogen economy presents both challenges and opportunities. Concerted action and active diplomacy will be needed to prevent Europe from being overtaken by others and slipping into new dependencies.
Topic:
Climate Change, Governance, Hydrogen, Energy, and Geoeconomics
Political Geography:
Europe and Finland

5. Leveraging Predeparture Counseling to Support Returning Migrants’ Sustainable Reintegration

Author:
Lucía Salgado
Publication Date:
05-2022
Content Type:
Policy Brief
Institution:
Migration Policy Institute (MPI)
Abstract:
Across the European Union, assisted voluntary return and reintegration (AVRR) programs have proliferated over the past several decades, amid mounting pressure on policymakers to increase the return rate of migrants without a right to stay in Europe. These programs are considered more cost-effective, humane, and pragmatic from a diplomatic perspective, and ultimately aim to help migrants reintegrate successfully into their communities of origin. Much of the reintegration assistance AVRR programs offer occurs after migrants arrive in their origin countries, but there is growing awareness that kickstarting this support before the return journey can play a decisive role in reintegration outcomes. It can have the dual benefits of helping migrants develop a clearer picture of life after return, and of collecting information that origin-country service providers can use to support them effectively after they arrive. Yet, the potential of predeparture counselling may remain untapped if information gaps between actors in origin and destination countries are not addressed. This policy brief provides an overview of predeparture counseling and information-sharing challenges in European AVRR programs. It then explores strategies for improving the exchange of information and, thus, better leveraging predeparture counseling to support returnees’ sustainable reintegration.
Topic:
International Cooperation, International Organization, Governance, European Union, Borders, Integration, Deportation, and Illegal Immigration
Political Geography:
Europe

6. Embedding Reintegration Assistance for Returning Migrants in the Local Context: The Role of Referrals

Author:
Ravenna Sohst and Camille Le Coz
Publication Date:
06-2022
Content Type:
Policy Brief
Institution:
Migration Policy Institute (MPI)
Abstract:
The objectives of European reintegration programs for migrants returning to their countries of origin have expanded in recent years. Reintegration assistance, instead of being delivered as standardized support packages, is increasingly being designed to take into account the multiple dimensions of returnees’ reintegration—economic, social, and psychosocial—and the context of the communities in which they settle. As these programs become more complex, it has also become clear that no one service provider can offer all of the various services necessary to meet returnees’ diverse needs and profiles. One way to broaden the range of supports available to returning migrants and embed reintegration assistance into the local context is to refer returnees to local actors, including government agencies and civil-society organizations. Such referrals, particularly when combined with capacity-building assistance for local partners, can help connect returnees with tailored, long-term support. Yet, there is no consensus across reintegration programs as to how referral mechanisms should be organized, what types of services referral partners should deliver, the level of budget support different actors need, and how their work should be monitored. This policy brief explores the role of referrals in reintegration programming, offering a typology of approaches taken across programs to date. It also discusses common challenges, emerging good practices, and promising next steps to improve the local embeddedness of reintegration assistance.
Topic:
International Cooperation, International Organization, Migration, Governance, Integration, Deportation, Reintegration, Immigration Policy, and Illegal Immigration
Political Geography:
Europe and Global Focus

7. The Future of the European Financial Architecture for Development

Author:
Mikaela Gavas
Publication Date:
05-2022
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
In “The European Financial Architecture for Development: evolution or revolution,” Mikaela Gavas sets out the current European Development finance landscape, explaining the key players involved and highlights the challenges with the current systems, and underlines the importance of the EU and its various instruments.
Topic:
Regional Cooperation, Governance, European Union, and European Parliament
Political Geography:
Europe

8. Early warning: How Iraq can adapt to climate change

Author:
Nussaibah Younis
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
Iraq is at high risk of suffering the worst effects of the climate crisis, including soaring temperatures and acute water scarcity. As land suitable for farming shrinks and rural jobs disappear, ordinary Iraqis are moving to cities in search of work. This increases pressure on services, pushes up food prices, and exacerbates social tensions, leading to protests and even violence. Iraq’s weak internal governance prevents it from improving water management, managing inter-provincial and inter-tribal conflict, and attracting investment and expertise to create new green-economy jobs and adapt to the changing climate. Public awareness of climate risks is growing, but too few political leaders prioritise the issue. Iraq has long struggled to reach agreement on water issues with upstream states Turkey and Iran, which are building dams that affect supply to Iraq; they also believe that Iraq manages water badly. Similar issues complicate relations between Baghdad and the Kurdistan region. Iraqis and Europeans should work together to improve Iraq’s poor governance and consider measures such as establishing an ‘early warning’ system about potential conflict arising from climate effects.
Topic:
Climate Change, Economics, Politics, and Governance
Political Geography:
Iraq, Europe, and Middle East

9. Quo Vadis, Belarus?

Author:
Zoran Meter
Publication Date:
02-2022
Content Type:
Policy Brief
Institution:
Institute for Development and International Relations (IRMO)
Abstract:
Year 2021 was one of the most turbulent for Belarus since its independence after the collapse of the USSR. In the West Belarus is sometimes called the “European North the global economic crisis in 2008 without too many problems and internal turmoil. Belarus has also successfully overcome problems with its neighbor the Russian Federation caused by Korea” and its longtime president Alexander Lukashenko, whom the West no longer recognizes, is dubbed “Europe’s Last Dictator.” Although this country is still to a large extent dug in its communist past, it has overcome disputes related to the content and dynamics of the implementation of the establishment of a Federal State between Belarus and Russia to which they previously committed.
Topic:
Economics, Governance, Leadership, Dictatorship, Pandemic, and COVID-19
Political Geography:
Europe and Belarus

10. How have sanctions impacted Russia?

Author:
Maria Demertzis, Benjamin Hilgenstock, Ben McWilliams, Elina Ribakova, and Simone Tagliapietra
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Russia’s invasion of Ukraine has triggered a series of sanctions imposed by the European Union, the United States and others. Sanctions included restrictions on Russia’s financial industry, its central bank and its coal and oil exporters, in addition to general export controls. Meanwhile, foreign companies have withdrawn voluntarily from the Russian market as a result of a ‘self-sanctioning’ trend. We assess the impact these sanctions have had on Russia’s economy in the immediate aftermath of the invasion and more structurally. Russian fiscal revenues have not suffered from sanctions sufficiently to reduce the length of this war. Effective management by the Bank of Russia has prevented financial instability and has therefore also protected the real economy. However, this picture of economic containment is coming to an end. Russia’s fiscal revenues are now beginning to take a hit; given the breadth of sanctions, the economy will suffer in the medium to long term. The voluntary departure of a large number of western firms, eventual energy decoupling by the EU and Russia’s inability to find equal alternatives will damage the Russian economy severely. As the Russian economy closes in on itself, it will become harder to find reliable data to evaluate the extent of the hit. Still greater sanctions coordination across the globe is needed to isolate the Russian economy, limit the flow of income into Russian coffers and therefore help stop the war.
Topic:
Governance, Sanctions, Economy, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

11. Will Ukraine’s refugees go home?

Author:
Uri Dadush and Pauline Weil
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
About 15 percent of the population has fled Ukraine since the start of the Russian aggression in February 2022. Nearly 4 million Ukrainians have already registered in European Union countries. Based in part on evidence that few refugees return voluntarily to poor countries once they settle in rich countries, even once security is re-established at home, it can be expected that large numbers of Ukrainian refugees are likely to remain in European host countries, and will likely be joined by others, including many men that remained to fight when the conflict is over. Ukraine already has a long history of emigration. Its shattered economy, the likelihood of a protracted conflict and significant uncertainty with regard to its final status reinforce the argument that most refugees will not return and many more will join them. EU nations must prepare for. There will be large short-term costs and long-term economic gains from Ukrainian immigration in Europe. The best way to help Ukraine, and to moderate the likely outflow of its people, will be to assist in the country’s reconstruction, and not to place artificial impediments to the immigration of individuals who have already suffered greatly.
Topic:
Migration, Governance, Reconstruction, Refugees, Economy, Trade, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

12. Enlarging and deepening: giving substance to the European Political Community

Author:
Franz Mayer, Jean Pisani-Ferry, Daniela Schwarzer, and Shahin Vallée
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
France’s President Emmanuel Macron and Germany’s Chancellor Olaf Scholz have stressed the geopolitical emergency of re-designing the European Union’s relationship with its neighbourhood. Both acknowledge that EU enlargement is necessary, but also emphasise that profound EU institutional reform is required beforehand, though deepening and widening the EU are complex processes that veto players could block. The geopolitical challenges mean it is in the critical interest of the EU to bring stability to its neighbourhood by ensuring geopolitical alignment with the EU, limiting the blackmailing power of external, authoritarian states, supporting more resilient democracies and strengthening the rule of law. Meanwhile, the EU’s neighbours are seeking a political space in which challenges to collective security and stability can be addressed and concrete policies decided. Given the urgency, it is not enough to rely on lengthy EU accession processes. A ‘European Political Community’ (EPC), which will have its first summit on 6 October 2022, could act both as a bridge to an eventual larger EU and as a framework for continental-scale partnership. Leaders should use the summit to start the building of a platform that can combine political dialogue with policy delivery in a quick and flexible way, and will thus structure more impactfully the relationship between the EU and its neighbourhood. The EPC could start as a soft law agreement between states and the EU. It would work with existing institutions as far as possible, while aiming at more effective decision-making than currently in the EU. For instance it could function without vetoes and could work in geopolitically relevant areas that are not yet EU competences. An ambitious EPC would provide financial resources for deeper cooperation on energy and climate, security and defence, and economic and social convergence. The EPC would not be, and should not be, regarded as a substitute for EU accession, but should be designed in such a way that it can work as an accelerator. For countries not seeking to join the EU, it would provide an ongoing framework that sustains structured cooperation with the EU.
Topic:
Security, Politics, Governance, and European Union
Political Geography:
Europe

13. Strict and Uniform: Improving EU Sanctions Enforcement

Author:
Kim B. Olsen and Simon Fasterkjær Kjeldsen
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
For as long as the EU has been using sanctions as a foreign policy instrument, countering violations has been a challenge. With the EU rapidly expanding the breadth and depth of its sanctions, its ­institutions and member states must find ways to ensure stricter and more uniform enforcement to deter violations, enhance efficiency, and ensure a more level playing field for economic actors. The stakes are high: the success of the EU’s response to Russia’s military aggression hinges largely on effective sanctions, and the long-term legitimacy of the tool itself depends on its enforcement.
Topic:
Foreign Policy, Governance, Sanctions, European Union, International Order, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Eastern Europe

14. Rethinking EU economic governance: Social investment

Author:
Laura Rayner
Publication Date:
12-2021
Content Type:
Policy Brief
Institution:
European Policy Centre (EPC)
Abstract:
COVID-19 has led to more inequality and poverty in Europe. Together with the accelerating climate crisis and ageing population, massive additional investments in education, healthcare and social infrastructure will be needed to maintain Europe's social protection systems, ease the negative impact of the digital and green transitions, and protect the Union's future prosperity. Unfortunately, the EU's current economic governance model does not leave much room for member states to make these kinds of investments in human capital - also called 'social investment'. This third Policy Brief in a series on reforming EU economic governance sets out five proposals to promote the role of social investment: Alter the pace of fiscal consolidation to be in line with economic growth; Reassess the accounting procedure for public investments, which can, in the long run, split up government investment from government spending and improve the quality of public finances overall; Establish a Future Investment Fund, whereby public investment would be excluded from the calculations of both headline and structural deficits; Reform the European Semester in a way that incorporates the lessons of austerity and prioritises social outcomes alongside fiscal and public administration reforms; Prioritise what matters to citizens - even if it challenges the existing economic orthodoxy.
Topic:
Poverty, Governance, European Union, COVID-19, and Social Investment
Political Geography:
Europe

15. Transatlantic Paralysis: The US-EU Trade Policy Stalemate and the European Union’s Democratic Deficit

Author:
Thomas J. Duesterberg
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
What is often labeled the democratic deficit in governance of the European Union (EU) is not a a flaw or bug in its architecture, it is a design feature. From its earliest days in the Second World War’s chaotic aftermath, European integration “was essentially an elite project, pursued at a distance from the daily concerns of the national populations in Western Europe.” Also formed as a response to the economic disintegration following the Depression and World War Two, the General Agreement on Tariffs and Trade (GATT) was similarly removed from national or populist politics. It too was an elite, top-down initiative designed to embed nations in a system of international rules largely articulated by technical experts, enforced by a form of international courts, and far removed from national and populist politics. Many of the intellectual proponents of both supranational institutions, from the Austrian School of economics, the ordoliberals emerging in early-20th century Germany, to the London School of Economics indeed shared a distrust of American-style democracy, let alone the various parliamentary democracies whose failure led to the disasters of the 1930s and 1940s. Over the last fifty years, the institutions put in place after World War II have been perfected and have, to a certain extent, ossified. Many of the difficulties in achieving greater US-EU economic coordination in the 21st century have their origins in the institutional design and the subsequent early implementation of early European Community rules during the post-war period. A brief overview of the history of European integration, and the political thinking behind it, helps explain the current paralysis in contemporary transatlantic cooperation, including in a joint approach to the challenge of Chinese mercantilism and its growing international reach.
Topic:
Economics, Governance, Democracy, Trade, and Transatlantic Relations
Political Geography:
Europe, North America, and United States of America

16. Rethinking EU economic governance: The Stability and Growth Pact

Author:
Francesco De Angelis and Frederico Mollet
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
European Policy Centre (EPC)
Abstract:
It is time to reimagine the EU’s economic governance. In early 2021, the EPC set out to do just that in its Rethinking EU Economic Governance Task Force. Drawing on insights from participating experts, academics and policymakers, this first Policy Brief in a series of EPC publications outlines how the debate on the Stability and Growth Pact (SGP), the EU’s framework for fiscal and macroeconomic surveillance, has evolved and the reform options that have surfaced. There is broad dissatisfaction with the SGP and how it has fared in an environment of prolonged low-interest rates, missed inflation targets and low growth. In February 2020, the European Commission launched a review of the SGP in an attempt to address its shortcomings, but it was quickly put on hold by COVID-19, when the fiscal rules were suspended. Half a year later, the Commission is finishing what it started. We are in a drastically different world since the European Commission launched the review. Not only has government debt increased significantly, but regional, economic and social divides have worsened, policymakers face inflationary pressures for the first time in decades, and the Recovery and Resilience Facility and accompanying EU-level bond issuance fundamentally changed the EU’s economic architecture. In parallel, there is a widespread acknowledgement that averting, as well as adapting to, the climate crisis requires a steep increase in public investment. Thanks to the EPC Task Force’s ongoing work, Francesco De Angelis and Frederico Mollet can pinpoint the SGP’s major flaws, post-COVID-19 challenges, and five broad categories of reform options: Interpretative flexibility to smooth fiscal adjustment paths and potentially place less emphasis on problematic indicators. Moderate non-treaty reforms to reduce complexity and procyclicality and increase enforceability. The ‘golden rule’ to exempt some public investments from the fiscal rules. Central fiscal capacity for macroeconomic stabilisation. Off-balance-sheet investments to increase public investment.
Topic:
Political Economy, Governance, European Union, Economic Growth, COVID-19, Economic Stability, and European Commission
Political Geography:
Europe

17. Rethinking EU economic governance: The European Semester

Author:
Frederico Mollet
Publication Date:
12-2021
Content Type:
Policy Brief
Institution:
European Policy Centre (EPC)
Abstract:
In the debates over the future of the EU’s economic governance, the reform of the Stability and Growth Pact (SGP) usually takes centre stage. But the European Semester – the framework governing economic policy coordination and country surveillance – is also critical. Reforming and strengthening it is vital given the multiple challenges the EU faces, from the twin green and digital transitions to implementing the Recovery and Resilience Facility (RRF) and tackling the macroeconomic and structural scars left by COVID-19. This Policy Brief, the second in a series of EPC papers that reassess the EU's economic governance policies, sets out proposals for reforming the European Semester across three strands: (i) integrating the RRF into the Semester; (ii) drawing on the positive lessons of the RRF process; and (iii) improving the effectiveness of cross-cutting policy coordination and the Macroeconomic Imbalances Procedure (MIP).
Topic:
Governance, European Union, Economy, COVID-19, and Economic Recovery
Political Geography:
Europe

18. The RRF as administrative subsidiarity

Author:
Adriaan Schout
Publication Date:
10-2021
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
When the corona crisis broke out, it was clear that eurozone economies were ill prepared for new setbacks. Put differently, the SGP had failed to produce convergence. The RRF offers an opportunity to reconsider the effectiveness of economic governance and to strengthen national ownership for sound economic policies. Despite its potential merits, the RRF was not designed to reinforce national institutions to monitor and correct their own economic policies. Creating the required ownership for sound economic policies would have demanded empowering the independent National Productivity Boards (NPBs) and Independent Fiscal Institutions (IFIs), and integrating them in a redesigned independent network-based European Fiscal Board (EFB). The failure in 2020 to include the NPBs, IFIs and the EFB also implies a major break with the Fiscal Compact, Two Pack and Six Pack that aimed at empowering national institutions. The RRF concerns a major financial commitment and could thus have been used as bargaining chip to strengthen the long-term reform measures by insisting on a subsidiarity-based European monitoring and enforcement system, including mutual inspections, and build around the nascent macroeconomic independent national and EU agencies. Such decentralized systems have proved their worth in successful European policy areas such as in monitoring the state of the environment in member states. This will have consequences for the organization of the EU Commission. Using the lessons from the RRF to (forget to) strengthen national institutions is also relevant for redesigning the SGP. Firstly, redesigning the NPBs, IFIs and EFB will offer a suitable model for monitoring national policies as a replacement of the current centralized control under the SGP by the Commission. Secondly, the future development of the RRF and NGEU can be used as bargaining chip in the negotiations on the SGP. The review of the SGP will involve adaptation of rules, reinstituting the ESM, and deciding on new emergency funds. The negotiations ahead offer opportunities and leverage for steering towards a pro-active and constructive role for the Netherlands in the elaboration of subsidiarity-based economic governance.
Topic:
Governance, Economy, Fiscal Policy, and COVID-19
Political Geography:
Europe

19. The Era of German Chancellor Angela Merkel: What Was and What Remains?

Author:
Thomas Brey
Publication Date:
08-2021
Content Type:
Policy Brief
Institution:
Institute for Development and International Relations (IRMO)
Abstract:
After the general election in Germany at the end of September, Angela Merkel will step down as Chancellor at the age of 67. She held this most important political office in Germany for almost exactly 16 years (2005-2021). She will thus equal the record of her former political mentor and Chancellor Helmut Kohl (1982- 1998). In 2021, she was named “Most PowerfulForbes for the tenth time in a row. In 2015, the US magazine Time named her “Person of the Year” on its cover. Merkel has received the highest state honors from Italy to Peru, from Portugal to Israel. In 2011, she was awarded the Presidential Medal of Freedom - one of the two highest state decorations in the USA. The world’s honorary doctorates are legion. Merkel had a picture-perfect professional career, although by today’s standards she became politically active for the first time relatively late, at the age of 35. In the final phase of the GDR, she became involved in the opposition. As “Kohl’s girl” (“Kohls Mädchen”) she became Minister for Women’s Affairs as early as 1989, then Minister for the Environment (1994-1998), CDU General Secretary (1998-2000) and finally Party Chair (until 2018). She completed her studies in East Germany with a highly praised dissertation. When she became Chancellor in 2005, she was the first woman to hold the office and the first Chancellor from East Germany.
Topic:
Security, Governance, Hegemony, and Leadership
Political Geography:
Europe and Germany

20. The great COVID-19 divergence: managing a sustainable and equitable recovery in the European Union

Author:
Gregory Claeys, Zsolt Darvas, Maria Demertzis, and Guntram B. Wolff
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The COVID-19 pandemic has led to the biggest global recession since the Second World War. Forecasts show the European Union underperforming economically relative to the United States and China during 2019-2023. Southern European countries have been particularly strongly affected. While the ICT sector has benefitted from the COVID-19 crisis, tourism, travel and services have suffered. Business insolvencies have, paradoxically, fallen. While total employment has almost recovered, the young and those with low-level qualifications have suffered employment losses. Inequality could rise. The pandemic may lead to medium to long-term changes in the economy, with more teleworking, possibly higher productivity growth and changed consumer behaviour. Policymakers must act to prevent lasting divergence within the EU and to prevent scarring from the fallout from the pandemic. The first priority is tackling the global health emergency. Second, we warn against premature fiscal tightening and recommend instead additional short-term support from national budgets. Over the medium term, fiscal policymakers will need to gradually move away from supporting companies through subsidies, towards tax incentives for corporate investment. A review of the European fiscal framework is needed to achieve the EU’s green goals more rapidly. The quality of public finances, how policymakers spend resources and the associated reforms are of central importance to prevent scarring. Improving the efficiency of insolvency procedures will be crucial for speedy and effective recovery. Targeted labour market policies for the young and less-qualified are needed. As teleworking becomes a more permanent feature of the EU’s labour markets, it will be crucial to adapt social security and taxation systems in the context of the single market for labour. The EU should resist protectionist calls in the wake of the pandemic. Rigorous competition policy enforcement and an integrated EU market have been beneficial for European convergence and growth. Capital markets have an important role to play in a speedy recovery.
Topic:
Governance, European Union, Inequality, and COVID-19
Political Geography:
Europe