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201. Rethinking the Dutch position towards the Western Balkans in the new security environment in Europe

Author:
Arlinda Rrustemi, Luka Steric, and Marko Drajic
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Belgrade Centre for Security Policy
Abstract:
The main goal of this paper is to present lessons learned, and present policy recommendations regarding the EU integration policy in Western Balkans given the recent events in 2022. In addition, a deeper understanding of the Dutch foreign and security policy is also provided, since the Netherlands has rejected plans for the EU’s further expansion. The year 2022 brought many political, legal, and security changes to Europe. Most importantly, events which had been considered unthinkable for decades have occurred. On February 24th, Russia commenced a fullscale military invasion of Ukraine, conducting attacks that have caused 7,061civilian deaths, while some sources report up 21,000 deaths only in Mariupol, indiscriminate attacks in violation of the laws of war that may amount to war crimes, and more than five million refugees. The European response was unified and timely. A clear willingness to stand by the side of Ukraine has been shown and sanctions are enforced against Russia by all EU member states (MS), while providing aid in various forms. An uptick in polarization, populism and far right sentiment can be observed in Victor Orban’s success in the Hungarian April Elections and in Marine le Pen’s persisting into the second round of the French Presidential election. Not only the right political spectrum is gaining traction but also the left. The Slovenian Prime Minister Janez Janša has been defeated by a left wing party, the Freedom Movement, founded a year ago. In addition, European governments that are key to stability and peace of the Western Balkans region are experiencing drastic political changes. The new German government that succeeded Angela Merkel’s cabinet after one and a half decade is posing new foreign and security policy questions. Macron suggested an end to the enlargement agenda as we know it, proposing the political European community as an alternative. Tensions in terms of hate and acts of violence have been reported in Bosnia and Herzegovina and Kosovo, raising further questions about the future of the Western Balkans in Europe. War in the continent posed a threat to the credibility and legitimacy of the European project. It questions European values and is an existential threat to the integration process, and European security. Ursula von der Leyen offered a speedy response to Ukraine’s bid to join the European Union, for which Ukraine applied in times of conflict. This is the first time in history that a nation during conflict applies for EU membership. The Ukrainian application and the war have resulted in many uncertainties for Europe. This raises questions surrounding the accession processes of other countries in the Western Balkans region, such as Serbia, Montenegro, Albania, North Macedonia, Bosnia and Herzegovina, and Kosovo. An analysis of the EU integration policy in the Western Balkans region is therefore crucial given the recent events. Progress towards EU integration has varied among countries in the Western Balkans region. The closest to the EU integration are Montenegro and Serbia with many chapters open. North Macedonia and Albania are waiting to start formal negotiations. Kosovo and Bosnia and Herzegovina are farthest removed due to their internally and externally driven fragilities. The main goal of the report is to question the current approach while providing a fresh perspective on the EU’s integration policy, given the recent security and political events. In addition, a deeper understanding of the Dutch foreign and security policy is also provided, since the Netherlands has rejected plans for the EU’s further expansion. The following sections outline Dutch foreign policy, followed by recent political, security and legal developments in the Western Balkans region. The final section outlines lessons learned, and present policy recommendations regarding the EU integration policy in Western Balkans given the recent events in 2022.
Topic:
Security, Diplomacy, Regional Cooperation, European Union, and Integration
Political Geography:
Europe

202. Resilience to Violent Extremism in Serbia: The Case of Sanjak

Author:
Predrag Petrovic and Marija Ignjatijevic
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Belgrade Centre for Security Policy
Abstract:
This paper presents the factors enabling the environment for extremism and the resilience factors to violent extremism in the case of Sanjak. Many experts had gloomy forecasts about violent Islamist extremism and terrorism in Serbia. Sanjak – the southwest region in Serbia populated by Muslim majority – was even dubbed Jihadist hotbed, as it was the center for further spreading ultra-conservative Salafism from the neighboring Bosnia and Herzegovina into Serbia, and a region where the recruitment of Syrian foreign fighters took place. Among the most influential militant Salafi leaders in Vienna who maintained contacts with ISIS there were individuals from Sanjak. However, despite these forecasts and the presence of both push and pull factors of violent extremism, Sanjak has proved to be very resilient to violent Islamist extremism. Compared to other countries in the Western Balkans, a relatively small number of people from Serbia (49 of them including women and children) joined militant Islamist groups in Syria. Only a few incidents involving militant Salafis and failed terrorist plots happened. People in Sanjak showed both resilience to violent extremism and to the spread of the ultra-conservative interpretation of Islam. In this paper, we first identify the cases of violent extremism and then map and analyze factors that make Sanjak enabling environment for extremism. The second part of the paper is dedicated to understanding key resilience factors to violent extremism showcased in Sanjak. Ethno-nationalism and far-right extremism are only analyzed as possible drivers of Islamist radicalization. This report is based on extensive field research in Belgrade, Novi Pazar, Sjenica, and Tutin between July and September 2021, during which a total of 25 interviews were conducted.
Topic:
Security, Violent Extremism, Violence, and Resilience
Political Geography:
Europe and Serbia

203. Post-Brexit imports, supply chains, and the effect on consumer prices

Author:
Jan David Bakker, Nikhil Datta, Josh de Lyon, Luisa Opitz, and Dilan Yang
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
UK in a Changing Europe, King's College London
Abstract:
This report documents the decrease in imports and shows how the patterns of imports vary across sectors following the UK’s departure from the Single Market and Customs Unit at the end of 2020. The authors, Jan David Bakker, Nikhil Datta, Josh De Lyon, Luisa Opitz, and Dilan Yang, focus on comparisons between imports from the EU and imports from non-EU countries. Some products, such as fats, oils, and waxes, experienced a sizeable decrease in trade volumes with EU countries compared to those of non-EU countries in January 2021. Other products, such as minerals, experienced minimal deviation in imports from the EU versus non-EU. We also document that the timing of import changes varies across products: in some cases, the deviation occurs pre-TCA, and there is some evidence of stockpiling; in other cases, the changes only occur post-TCA, and can be either short term or persistent. The fall in imports from the EU will affect the UK economy through its impact on supply chains. Two-thirds of international trade is in products used as inputs to production. We show that imports from the EU fell for products that are used as inputs to production in many industries in the UK. For some sectors such as agriculture, fishing, and car manufacturing, there is evidence that imported inputs began to be sourced from non-EU countries pre-TCA. For others, including vegetable oil, animal fats, prepared animal feeds, and pharmaceuticals, the adjustments occurred post-TCA. Evidence suggests that increased access to intermediate inputs can boost productivity, so a reversal is likely to cause a fall in productivity. Imports also provide cheaper goods to consumers, as well as a wider variety of choice. Focussing on food products, we show that the drop in imports after Brexit caused an increase in prices. Products that were more heavily reliant on imports from the EU increased in price following the election of Boris Johnson in 2019, pre-TCA and then increased further post-TCA. This report therefore shows that changes in imports of goods from the EU have affected UK firms’ supply chains. Part of this change is driven by the adjustment costs incurred as part of the new trading relationship and is likely to be short term, but another part is likely to reflect a long-term increase in the cost of inputs from the EU, which make up a sizable contribution of total imports. This could have a knock-on effect for consumers who will face higher prices, and for workers whose jobs will be affected by adjustments in the supply chain.
Topic:
European Union, Brexit, Trade, Imports, and Supply Chains
Political Geography:
United Kingdom and Europe

204. Understanding the Cost-Effectiveness of COVID-19 Vaccination in Nigeria

Author:
Helen Dempster, Jennifer Dew, Samuel Huckstep, Martina Castigliono, and Cassandra Zimmer
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The Global Compact for Safe, Orderly, and Regular Migration (GCM) calls on countries of destination to both expand regular migration pathways and take steps to increase the development impact of these pathways. Migration can have a positive impact on the economic development of migrants themselves, their families, their countries of origin, and their country of destination, if aspects such as integration, remittances, and skill transfers are prioritized. This paper, produced by the Center for Global Development (CGD) and the UK office of the International Organization for Migration (IOM), outlines lessons for the UK Government to implement if they are to increase the development potential of both their existing and new immigration pathways, particularly in the agriculture, nursing, and green technology sectors
Topic:
Development, Migration, Immigration, and Reform
Political Geography:
United Kingdom and Europe

205. Toward a New Youth Brain-drain Paradigm in the Western Balkans

Author:
Marjan Icoski
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
Youth brain drain is one of the most worrisome problems for the Western Balkan Six countries (WB6)—Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, Kosovo, and Serbia. The pace and intensity of youth brain drain, rank the WB6 among the top brain drain leaders in the world, with estimations to lose a quarter to half of its skilled and educated young citizens in the forthcoming decades. A situation that cast serious doubts on the democratic and economic progress of WB6, and their prospective membership into the EU. Youth brain drain is a historically rooted topic in the culture and tradition of the WB6, provoking huge sentiments and heated public debates. Due to its sensitivity, it is prone to politicization and misuse by the political parties that did not manage to find a compromise for its full acknowledgment as a separate policy field. Therefore, to date, the policy approach to youth brain drain is declarative and inconsistent, tackled as part of bigger policy areas such as youth employment, education, and diaspora engagement. Although formally, all WB6 countries have policies and institutional mechanisms in place, youth emigration and the desire to leave are constantly on the rise, underlining their limited scope and impact to keep youth home. This paper analyzes the conceptual shortcomings of the current policy approach. In line with the latest trends and tendencies of youth brain drain, it offers fresh policy options for utilization of the potential of the regional youth diaspora as the new WB6 development doctrine. The paper sees the youth diaspora not only as a source of remittances but also as a source of investments, know-how, skills, and connections as per the examples of several EU member states. The paper further announces the necessary paradigm change grounded in the shift of the public narrative and redesign of return and circulation policies through deepening regional cooperation and establishing a new migration deal with the EU under the framework of the WB6 accession processes.
Topic:
Foreign Policy, Migration, Brain Drain, and Youth
Political Geography:
Europe, Eastern Europe, Balkans, and Central Europe

206. How Its War on Ukraine Killed Russia’s Hydrogen Ambitions

Author:
Aliaksei Patonia
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
Hydrogen looks like the fuel that can facilitate global decarbonization because it can be used in diverse applications—such as heat and power generation, transport, and manufacturing—without any carbon emissions. But, while many countries (including in Europe) view renewables-based, zero-carbon hydrogen as the ultimate goal in transitioning to a hydrogen economy, today most hydrogen is produced from natural gas. Thus, it is unlikely that the hydrogen transition will happen without relying on this fossil fuel. Russia is the country with the world’s largest natural gas deposits, and it has been exploring ways to adjust its energy sector to the needs of the emerging global hydrogen one. In 2021, it announced the goal of capturing up to 20 percent of the world’s hydrogen market by 2030. This came after all the major importers of Russia’s energy products had developed their hydrogen strategies, and its key energy companies started to explore new opportunities. Having signed memoranda of understanding with some of the world’s major energy companies to jointly develop Russia’s hydrogen export potential, they focused on Europe as the key destination. Some of Asia’s hydrogen pioneers and most promising future importers, such as Japan and South Korea, were also included among Russia’s potential partners. These steps could have resulted in long-lasting and fruitful collaborations generating large profits for Russia, but its ambitions have been jeopardized by its invasion of Ukraine in February 2022. This has led to Russia losing key political and economic partners in Europe and also in Asia, which—in combination with being the target the toughest sanctions in its history—is likely to cripple its nascent hydrogen sector. Having planned to convert its natural-gas pipelines to transport hydrogen to future buyers in Europe, Russia is unlikely to be able to use this infrastructure for this purpose anymore. The EU will be an unlikely buyer of Russian hydrogen for the foreseeable future. Turning to Japan and South Korea would not be a success either, since they have joined the sanctions regime against Russia and, like the EU, have been officially labeled as unfriendly by Moscow. This will make the transfer of the technologies critical for the production of low- and zero-carbon hydrogen from the world leaders to a technologically backward Russia very problematic. Europe will also feel long-lasting repercussions of Russia’s war in Ukraine in the energy and hydrogen sectors. With no steady supplies of cheap Russian gas or hydrogen, Europe’s decarbonization efforts and building up its hydrogen industry will be inhibited and require a lot more effort and money. Russia will have to seek alternative markets for its energy commodities and it will seek deals with China, the only country whose energy consumption can rival that of Europe. But, as one of the world’s largest producers of electrolysers and of conventionally manufactured hydrogen, China probably will not need to import Russia’s hydrogen to build up its own hydrogen sector. Possessing critical technologies of its own, it will instead increase imports of Russian primary energy sources (such as natural gas) that it can use for producing hydrogen. The influx of huge volumes of cheap Russian feedstock will speed up China’s transformation from a country with a nascent hydrogen sector into a dominant player on the global hydrogen market. If the EU or the United States—the only two actors comparable to China in economic, technological, and geopolitical strength—do not develop similarly strong hydrogen sectors, Beijing could end up dominating the global energy landscape. To avoid the geopolitical consequences of this and for global balance to be maintained, further cooperation between the EU and the United States will be needed to speed up the creation of strong hydrogen sectors for both.
Topic:
Foreign Policy, Economics, Business, Trade, Hydrogen, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

207. How the EU Can Defend Media Freedom and Pluralism in Hungary and Poland

Author:
Anna Wójcik
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
In recent years, the European Union has suffered from the erosion of media freedom and pluralism, particularly in Hungary and Poland, where this has been part of a broader decline in democratic standards that has reversed gains made from the transitioning from communism. The main problems include the lack of independence of media regulators; public media being turned into propaganda outlets for the government, characterized by reporting bias and vilifying the opposition; private media capture; the state disproportionately funding government-supporting private media, including through state-controlled companies’ advertising; and creating obstacles for private media independent of government, including through revoking licenses and threatening new taxes. In Poland, the number of strategic lawsuits against public participation against certain media that criticize the government have also greatly increased. The EU has been in the prepared to tackle the issue of breaches of media freedom and pluralism chiefly through a combination of political instruments and new legislation, which may eventually embolden the EU institutions to take legal action. However, it is important to ensure any new legislative initiative will have added value. The EU already has avenues for legal actions to protect media freedom and pluralism in member states.
Topic:
European Union, Media, Freedom of Press, and Pluralism
Political Geography:
Europe, Poland, and Hungary

208. Designing Sanctions: Lessons from EU Restrictive Measures against Belarus

Author:
Yuliya Miadzvetskaya
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
The effectiveness and impact of sanctions are predetermined by how they are designed. This paper looks at the different elements in the design of European Union sanctions on Belarus in its different stages, their main pitfalls, and their potential effects on the country and its citizens. Several key elements are important for the design of sanctions: the triggering situation, the type of sanctions, the clarity of objectives and targets, the evidence for listings, and the conditions for review. They are crucial for explaining the mismatch between the objectives of EU sanctions and their limited impact. The gravity of the situation that triggers the introduction of sanctions is closely linked to the type of restrictive measures that will be chosen by the EU. Threats to EU and regional security as well as to the territorial integrity and sovereignty of its neighbors result in more complex measures, including sectoral economic sanctions, export restrictions, and flight bans. In the case of Belarus, broader economic measures were enacted in response to growing security threats to the EU and its partners. An analysis of EU sanctions on Belarus, including their cyclical nature, suggests that they have been most effective when their objective is limited and achievable. The release of political prisoners, cosmetic reforms to the Electoral Code, and the partial solution of the migration crisis are the most obvious examples of concessions that were made by the Belarusian authorities following the imposition of sanctions. Overly ambitious sanctions objectives limit the EU’s room for maneuver and bargaining. Bringing to justice those responsible for forced disappearances and human-rights violations or holding new free and fair elections are inacceptable demands for the Belarusian regime because they endanger its survival as it relies on the law-enforcement institutions. The effects of sanctions also depend on whom can be added on sanctions lists. Listing or designation criteria define conditions under which someone can be targeted. Those for Belarus were significantly updated in 2021 and now target those responsible for violations of human rights and election falsification, entities and persons benefitting from the regime, and those responsible for the forced landing of a Ryanair plane, the instrumentalization of the migration crisis, and Belarus’s involvement in Russia’s aggression against Ukraine. The broadening of the listing criteria increases the sanctioning power of the EU and paves the way for the extension of sanctions listings. The EU enacts sanctions by providing a statement of reasons that must come under the listing criteria and be substantiated with sufficient evidence for each listing. Based on EU sanctions-related case law, sanctions are designed in a way that takes into consideration the due-process rights of targeted individuals and entities. The EU Council has deployed a degree of legal gymnastics in crafting its sanctions on Belarus to increase their traction, notably by using the broad concepts of “support” for and “benefit” from the regime’s actions. Conditions for the review of sanctions are construed as requirements addressed to the targeted state. The fulfillment of these or some variation in the behavior of the target could trigger the partial suspension or the lifting of restrictive measures. Those conditions in EU sanctions against Belarus are sometimes included in EU legal acts and sometimes in other political statements. Clear-cut conditions for reviewing sanctions would help in improving their effects. The paper concludes with suggestions regarding the EU sanctions policy toward Belarus, notably with respect to national bias and to the need for a proper prior impact assessment, realistic objectives, clear communication, and more leverage for the EU.
Topic:
Sanctions, European Union, Domestic Politics, and Society
Political Geography:
Europe, Eastern Europe, and Belarus

209. NATO’s 2022 Strategic Concept: Matching Ambition with Reality

Author:
Jonny Hall and Hugh Sandeman
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
LSE IDEAS
Abstract:
This Strategic Update is based on a discussion hosted by LSE IDEAS in July 2022 on NATO’s 2030 Strategic Concept. Participants in the discussion included: General Sir James Everard, Gordon Barrass, General Sir Richard Barrons, Lt Gen Giles Hill, ProfessorChristopher Coker, Dr Luca Tardelli, Marissa Kemp, Tom McKane, and Peter Watkins. This Strategic Update reflects points made during the discussion, but no participant is in any way committed to its specific content, and the views expressed here are attributable solely to the authors. The Strategic Concept is the first since 2010 and was redrafted throughout a fundamentally different geopolitical and security context—following the Russian annexation of Crimea in 2014 and subsequent full-scale invasion of Ukraine in 2022. This Update addresses the Concept’s recognition of necessary strategic realignment, with NATO’s widening in both its defence commitments and geographic focus on China, as well as its ambiguity in regards to practical military strategy, deterrence, and endpoint of the war in Ukraine.
Topic:
Security, NATO, Military Strategy, Geopolitics, Deterrence, and Russia-Ukraine War
Political Geography:
Russia, China, Europe, and United States of America

210. NATO’s Resilience: The first and last line of defence

Author:
Johnny Hall and Hugh Sandeman
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
LSE IDEAS
Abstract:
Ahead of NATO’s Madrid Summit in June 2022, Hugh Sandeman and Jonny Hall confront the political challenges posed by Russia’s invasion of Ukraine to the alliance’s 2021 Strengthened Resilience Commitment, especially in creating collective standards when resilience remains the responsibility of individual member states. The authors find that resilience is a psychological mindset as well as a material factor, and NATO’s ‘whole-of-society’ approach should be framed within the concept of ‘deterrence by denial’ to potential threats. This Strategic Update is based on a discussion hosted by LSE IDEAS in January 2022 on ‘How can NATO define and develop practical objectives for enhancing the resilience of member states?’ Participants in the discussion were: General Sir James Everard, Dr Tomas Ries, Susan Scholefield, Peter Watkins, Professor Gordon Barrass, General Sir Richard Barrons, Professor Christopher Coker, and Tom McKane. This Strategic Update reflects points made during the discussion, but no participant is in any way committed to its specific content, and the views expressed here are attributable solely to the authors.
Topic:
Defense Policy, NATO, Resilience, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

211. The Long Shadow of the Soviet Union: Demystifying Putin’s Rhetoric Towards Ukraine

Author:
Björn Alexander Düben
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
LSE IDEAS
Abstract:
As tensions between Russia and Ukraine reach an almost-tipping point, Björn Alexander Düben analyses the historical and geopolitical rhetoric Putin and his government have deployed against the post-Maidan Ukraine since 2014. Asking, can this be seen as another Russian assertion of dominance in the post-Soviet region, could there be reasons closer to home, or why tensions across the border seem to once again be at a breaking point? From global oil prices to regime consolidation, an analysis into the words of Russia’s elites could unveil what future Europe is steering towards.
Topic:
Geopolitics, History, Conflict, Soviet Union, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

212. Can Chancellor Scholz Save the West? The New German Government and Global Geopolitics

Author:
Maximilian Terhalle
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
LSE IDEAS
Abstract:
In the wake of Chancellor Angela Merkel’s departure from the German Chancellorship, her successor, Olaf Scholz, inherits a Germany which has been lacking in strategic vision and an acute foreign policy for a considerable amount of time. Maximilian Terhalle asks, can Chancellor Scholz provide this vision for his country, and imbue NATO and the EU with a coherent and unified foreign policy in the face of threats from China, Russia, and a divided ‘West’?
Topic:
Foreign Policy, NATO, European Union, Geopolitics, Olaf Scholz, and Russia-Ukraine War
Political Geography:
Russia, China, Europe, and Germany

213. On the Design of Effective Sanctions: The Case of Bans on Exports to Russia

Author:
Ricardo Hausmann, Ulrich Schetter, and Muhammad A. Yildirim
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
We analyze the effects of bans on exports at the level of 5’000 products and show how our results can inform economic sanctions against Russia after its invasion of Ukraine. We begin with characterizing export restrictions imposed by the EU and the US until mid May 2022. We then propose a theoretically-grounded criterion for targeting export bans at the 6-digit HS level. Our results show that the cost to Russia are highly convex in the market share of the sanctioning parties, i.e., there are large benefits from coordinating export bans among a broad coalition of countries. Applying our results to Russia, we find that sanctions imposed by the EU and the US are not systematically related to our arguments once we condition on Russia’s total imports of a product from participating countries. Quantitative evaluations of the export bans show (i) that they are very effective with the welfare loss typically ∼100 times larger for Russia than for the sanctioners. (ii) Improved coordination of the sanctions and targeting sanctions based on our criterion allows to increase the costs to Russia by about 60% with little to no extra cost to the sanctioners. (iii) There is scope for increasing the cost to Russia further by expanding the set of sanctioned products.
Topic:
Sanctions, European Union, Exports, Trade, and Russia-Ukraine War
Political Geography:
Russia, Europe, Ukraine, and Eastern Europe

214. Global Supply Chain Pressures, International Trade, and Inflation

Author:
Julian di Giovanni, Şebnem Kalemli-Özcan, Alvaro Silva, and Muhammad A. Yildirim
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
We study the impact of the Covid-19 pandemic on Euro Area inflation and how it compares to the experiences of other countries, such as the United States, over the two-year period 2020-21. Our model-based calibration exercises deliver four key results: 1) Compositional effects – the switch from services to goods consumption – are amplified through global input-output linkages, affecting both trade and inflation. 2) Inflation can be higher under sector-specific labor shortages relative to a scenario with no such supply shocks. 3) Foreign shocks and global supply chain bottlenecks played an outsized role relative to domestic aggregate demand shocks in explaining Euro Area inflation over 2020-21. 4) International trade did not respond to changes in GDP as strongly as it did during the 2008-09 crisis despite strong demand for goods. These lower trade elasticities in part reflect supply chain bottlenecks. These four results imply that policies aimed at stimulating aggregate demand would not have produced as high an inflation as the one observed in the data without the negative sectoral supply shocks.
Topic:
Economy, Inflation, COVID-19, and Supply Chains
Political Geography:
Europe and United States of America

215. What the First Week of Fighting in Ukraine Tells Us About a Potential Insurgency

Author:
Alec Worsnop
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Center for International and Security Studies at Maryland (CISSM)
Abstract:
While the Russian advance in Ukraine has been slower than expected, its overwhelming conventional superiority gives it the upper hand. Despite the valiant resistance of many Ukrainians, Russia will probably conquer all or a portion of the country. However, the first week of the conflict has provided some useful information about the prospects for an insurgent campaign in the wake of a Russian occupation.
Topic:
Defense Policy, Military Strategy, Military Intervention, and Conflict
Political Geography:
Russia, Europe, and Ukraine

216. Are the effects of terrorism short-lived?

Author:
Vincenzo Bove, Georgios Efthyvoulou, and Harry Pickard
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Numerous studies demonstrate that terrorism causes strong public reactions immediately after the attack, with important implications for democratic institutions and individual well-being. Yet, are these effects short-lived? We answer this question using a quasi-experimental design and data on three successful and three foiled terrorist attacks in the United Kingdom. We find that heightened risk perceptions and emotional reactions in the wake of successful attacks do not dissipate in the very short run but are sustained over time and up to 130 days after the attacks. We also find that, whereas large-scale attacks cause a long-lasting shift in risk assessments and emotions, the corresponding effect of smaller-scale terrorism incidents appears to subside within one month. Interestingly, foiled attacks can also affect public perceptions, which, however, quickly return to normal levels. We argue that the extent of media coverage is partly responsible for the duration of these effects.
Topic:
Terrorism, Emotions, and Risk
Political Geography:
United Kingdom and Europe

217. Prosperity and Resilience: Diverse Production and Comparative Advantage in Modern Economies

Author:
David Henig and Anna Guildea
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
A common version of trade theory suggests that countries will specialise in a limited number of products. Using the example of David Ricardo from 1817, England specialises in cloth and Portugal in producing wine – and then they trade with each other to mutual benefit. However, this is a crude version of comparative advantage that routinely leads to political concerns about trade. Today the prime concern is that Europe and other developed countries have become too dependent on China by allowing the logic of comparative advantage to work. In short, trade has made us vulnerable. The observed reality is different. Most advanced economies produce and export a broad range of goods and services. Their governments have similar aspirations to develop and support diverse manufacturing and services, including in the most traded global sectors such as pharmaceuticals, automotive, business services, and food and drink. Modern specialisation comes in countries producing various, but not all, products within global supply chains. Patterns of trade suggest such specialisation has allowed countries to both grow and become resilient to individual shocks. Knowledge and ownership of the whole supply chain is more important than producing everything.
Topic:
Globalization, Economy, Services, Resilience, WTO, and Production
Political Geography:
Europe and Global Focus

218. Strategic Autonomy and Long-term Innovation Competitiveness: On the Importance of Intellectual Property Rights for the Production of High-Value Medicines in the EU

Author:
Matthias Bauer
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Europe’s political leaders have in recent months called for “European industrial autonomy”. Notions of dependency, sovereignty and resilience are now also referred to in policy proposals targeted at pharmaceutical companies, with “strategic autonomy” being the ultimate political ambition. The precise meaning of strategic autonomy in biopharmaceutical industries remains yet to be defined, although the current Pharmaceutical Strategy only refers to “open strategic autonomy” in the context of dependencies and supply chains. This is regrettable, as it does not take into account the importance of strategic research and innovation autonomy, allowing the EU to ensure a high degree of autonomy in innovative medicines and therapies. Current policy conceptions fail to account for businesses’ long-term international innovation competitiveness and Europe’s capability to attract investments in pharmaceutical research and cutting-edge production technologies. Present conceptions of strategic autonomy of Europe’s pharmaceutical industry disregard the fact that the EU is substantially lagging the USA and, increasingly, other parts of the word in pharmaceutical innovation. Clinical trials’ pipeline data shows that, in the future, EU Member States will very likely become increasingly dependent on innovative medicines that are temporarily protected by patents and market exclusivity rights held by non-EU rights holders in many therapeutic areas. This gives some urgency to Commission President von der Leyen ensuring that the European industry remains an “innovator” and “world leader” (Mission Letter by Commission President von der Leyen to Commissioner Kyriakides). The European Commission’s current understanding of sovereignty in pharmaceutical industries centres around one core theme: the reduction of dependencies from pharmaceutical suppliers outside the EU. At the same time, in an effort to achieve equitable access to affordable medicines and to foster research into unmet medical needs, it considers changes in the incentive structure for research in medicines for children and rare diseases, and new obligations for companies to achieve a more equitable access to medicines across Member States. While these objectives are generally merited, the Commission has established a narrow perspective about a concept that is aiming for ambitious long-term achievements for Europe’s pharmaceutical industry. The industry’s future innovation competitiveness and the capacity to develop and produce high value-added medicines, which should be at the core of any concept of long-term autonomy, have largely been ignored.
Topic:
Intellectual Property/Copyright, European Union, Innovation, Medicine, Strategic Autonomy, and Economic Competition
Political Geography:
Europe

219. After the DMA, the DSA and the New AI regulation: Mapping the Economic Consequences of and Responses to New Digital Regulations in Europe

Author:
Fredrik Erixon, Oscar Guinea, Erik van der Marel, and Elena Sisto
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The European Union (EU) has pursued an ambitious agenda for regulating the digital economy, and it is now planning to establish a new package of regulations, including the Digital Markets Act (DMA), the Digital Services Act (DSA), and a new regulation of Artificial Intelligence (AI). These regulations build on an already established structure of digital and business regulations in Europe that is comparatively restrictive but that varies substantially between EU member states. In this study, we take stock of the new incoming regulations and review their effect on EU member states’ economies. More precisely, the paper considers how different countries in Europe will be affected by the regulations and how they should balance these effects with policies that help the economy to prosper. The European Commission’s economic analyses and impact assessments of the new regulations are thin. In fact, they are grossly inadequate for the purpose at hand: to better understand how the economy will change because of these regulations. The Commission identifies some benefits – for instance, positive competition outcomes from reduced network effects and more trust in AI-based goods and services. There are good reasons to think that these benefits are real. However, these regulations will also lead to new costs and have broader consequences for firms and resource allocation in the economy. Remarkably, the only costs identified in the impact assessments are direct compliance and administrative costs. Obviously, for far-reaching regulations such as the DMA, the DSA and the AI regulation, the main costs will not be the direct compliance burden, but the dynamic and downstream economic effects spurred by their implementation. This is because these regulations will prompt firms and markets to change their current and future behaviour: these changes are likely to define the most important costs. Furthermore, it is important to get a better idea of the distribution of these costs. It is highly unlikely that all sectors and countries will be affected equally. Some sectors will be more affected than others just as some countries will experience economic consequences that are bigger than in other countries. The question is: what factors will lead to the expected variation in the costs and consequences of the three new regulations? In this paper, we argue that two factors are important for grasping the distributive patterns of costs from digital regulations. First, the industry structure of a country is key. In the economy, countries have different endowment structures, and the modern European economy is defined by factor endowments such as data and digital competences. These factor endowments are exploited in the economy by firms and organisations that use them to create different comparative advantages. In turn, these advantages influence how a firm and a country market, sell and trade. Second, the existing structure of a country’s business and digital regulations will influence how an economy will respond to new and additional digital regulations. In fact, the restrictiveness of regulations that we know to impact on the digital economy vary substantially in the European Union – both between countries and between sectors. This variation will have consequences for the distribution of the costs of the three new regulations that are going to be implemented. This paper maps countries and country groups in the digital economy: their endowments, advantages, and flows. Especially, it evaluates the digital performance of countries in a number of key indicators and data points, and anchors the analysis in the academic literature. The paper points to some specific consequences of the DMA, the DSA and the AI regulation, and how different regulations will affect endowments structures and advantages. One key finding is that the distributive effects of the regulations will depend on size advantages and disadvantages. In short, small economies and small firms will likely carry a disproportionate part of the cost of new digital regulations. Furthermore, countries that have used their endowments to specialise in the digital economy will be more affected than others. On this score, there is a vast difference between EU countries. For instance, countries in Europe’s North – generally small, competitive, and open economies – will be most affected by these new regulatory burdens. Countries in Central and Eastern Europe will also be negatively affected, especially through risks of market exclusion effects for small firms. It is important for European policymakers to now consider how they can avoid that these new digital regulations continuously reinforce size advantages for big economies and big firms. There are some policy strategies that should be considered. First, regulations can be changed to better fit the overwhelming evidence that young, dynamic, and innovative firms drive a substantial part of productivity growth in the economy. Second, EU and national policymakers can pursue policies that make the transition into a more size-balanced economy easier, for instance by taxing and regulating small firms differently. Smaller economies can also be helped by having corporate taxes that are lower than in big economies. Third, EU and national policymakers can reform other digital and business regulations and make them less burdensome. Fourth, the EU can help to support the build-up of digital advantages in smaller economies.
Topic:
Markets, European Union, Regulation, and Digital Economy
Political Geography:
Europe

220. The New Wave of Defensive Trade Policy Measures in the European Union: Design, Structure, and Trade Effects

Author:
Fredrik Erixon, Oscar Guinea, Philipp Lamprecht, Vanika Sharma, and Renata Zilli
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This study undertakes a comprehensive review of proposed and adopted defensive trade policy instruments in the EU, with the purpose of better understanding their design, functioning, and implications. The study covers eight policy instruments at different stages of development. These are: Anti-Coercion Instrument (ACI), International Procurement Instrument (IPI), Carbon Border Adjustment Mechanism (CBAM), Foreign Subsidy Instrument (FSI), Corporate Sustainability Due Diligence (DD), Level Playing Field Provisions in the EU-UK Trade and Cooperation Agreement (LPF), Enforcement Regulation (ER), and the Deforestation Initiative (DI). It is understandable that the EU seeks both redressive and retaliatory measures in its trade policy. However, these measures would have the total effect of Europe producing more for itself and being less dependent on imports. This is a significant policy shift, because in their totality the defensive trade policies make the EU more inward-looking. This can lead to major negative consequences. An extensive distortion of trade and markets would reduce the gains from trade and prompt a reallocation of European resources. Notably, the EU is a larger supplier of goods and services than it is a buyer, and an inward-looking policy that leads to retaliation from EU’s trading partners can harm its exports and trade surplus. There are also potential strategic consequences that could follow, and their importance has increased considerable as a result of the Russian war against Ukraine. Under these measures, the EU could introduce new trade frictions with friends and allies, and with countries that the EU seeks closer cooperation with to provide for a safer geopolitical environment. For each of these defensive measures, the study takes an extensive look at the objectives of the instruments, their legality, proportionality, and subsidiarity, the working of the instruments and the division of labour between institutions, as well as their enforceability in conjunction with existing multilateral and bilateral rules affecting the EU. It also attempts to capture the impact and potential for retaliation for the EU and its partners as a result of the implementation of the instruments. The study highlights the areas where the instruments lack clarity, particularly in the implementation of the instrument, the division of labour between the EU and EU member states, and the compliance of the instruments with WTO rules and bilateral FTA provisions. The instruments share some general characteristics. Many of the instruments have been created as retaliatory measures against coercion and unfair trade practices by partner countries. Very often, the partner countries most affected by the instruments are also the same. The United States, China, Russia, the UK, and Turkey are likely to be on the receiving end of the instruments due to the significant volumes of trade and economic interdependence with the EU, but also because they either do not follow the same trade rules as the EU, or the EU wants to maintain with them the current level of competitiveness. Most instruments also use restrictions to the EU market as the main policy lever. The objective is not just about creating an equal playing field but also ensuring that the rest of the world follows EU rules. Particularly, the EU aims at regulating non-EU companies directly and unilaterally through EU policies, which increases the risk of retaliation against the EU. At the same time, there are also important areas of departure in the specifics of each instrument, as illustrated by the varying objectives, measures, compatibility with international obligation, affected sectors, and whether the measures apply automatically or at the discretion of the EU.
Topic:
Defense Policy, Political Economy, European Union, and Trade
Political Geography:
Europe

221. Policy Paper: Considerations of condemnation and balance of Palestine’s position on the war in Ukraine

Author:
Palthink
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Pal-Think For Strategic Studies
Abstract:
In classic wars, we waited for the military result, and then we formed a political response. In new wars, there is not a final resolution; there is only the stronger party imposing its conditions. Additionally, there is also geographical control, regime projection, or behavior modification goals. Russia is seeking to maintain its national security and enhance its regional and international position. It has a deep fear that NATO will expand, bringing weapons to its border with Ukraine. Now that the first shock of the war has receded, the world realizes that the war will not exceed Ukraine’s borders. Russia has given indications that it will limit itself to the minimum that preserves its national security by preventing Ukraine from joining NATO. Global concern about the consequences of war is high. People are wondering if it will continue or stop. Additionally, sanctions have been announced. In this context, developing and poor countries are affected by conflict because they depend on foreign aid. Their positions on the war will determine where they are positioned, and how the political, economic and security consequences will affect them. Trying to show a neutral position would not endear them to the great powers. On the face of it, it may seem to be a war fought on Ukrainian lands only, but it is a world war of influence. The survival of developing nations depends on the strength of the international community and the extent to which it supports these nations in the light of political realism, not because of their strength and resources. Many places cannot survive without traditional international support.
Topic:
International Relations, Defense Policy, Military Strategy, and Conflict
Political Geography:
Europe, Ukraine, Middle East, and Palestine

222. The effect of COVID certificates on vaccine uptake, public health, and the economy

Author:
Philippe Aghion, Guntram Wolff, Philippe Martin, Lionel Guetta-Jeanrenaud, Bary Pradelski, Miquel Oliu-Barton, Nicolas Woloszko, Patrick Artus, and Arnaud Fontanet
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
In the COVID-19 pandemic, governments have, among other measures, mandated the use of COVID certificates to prove vaccination, recovery or a recent negative test, and have required individuals to show certificates to access shops, restaurants, and education or workplaces. While arguments for and against COVID certificates have focused on reducing transmission and ethical concerns, the incentive effects of COVID certificates on vaccine uptake, health outcomes and the economy has not yet been investigated. To estimate these effects, we construct counterfactuals based on innovation diffusion theory for France, Germany and Italy. We estimate that the announcement of COVID certificates during summer 2021 led to increased vaccine uptake in France of 13.0 (95% CI 9.7–14.9) percentage points (p.p.) of the total population up to the end of the year, in Germany 6.2 (2.6–6.9) p.p., and in Italy 9.7 (5.4–12.3) p.p. Further, this averted an additional 3,979 (3,453–4,298) deaths in France, 1,133 (-312–1,358) in Germany, and 1,331 (502–1,794) in Italy; and prevented gross domestic product (GDP) losses of €6.0 (5.9–6.1) billion in France, €1.4 (1.3–1.5) billion in Germany, and €2.1 (2.0–2.2) billion in Italy. Notably, the application of COVID certificates substantially reduced the pressure on intensive care units (ICUs) and, in France, prevented occupancy levels being exceeded where prior lockdowns were instated. Varying government communication efforts and restrictions associated with COVID certificates may explain country differences, such as the smaller effect in Germany. Overall, our findings are more sizeable than predicted. This analysis may help inform decisions about when and how to employ COVID certificates to increase vaccine uptake and thus avoid stringent interventions, such as closures, curfews, and lockdowns, with major social and economic consequences.
Topic:
Government, Economy, Public Health, Vaccine, and COVID-19
Political Geography:
Europe

223. Cutting Putin’s Energy Rent: ‘Smart Sanctioning’ Russian Oil and Gas

Author:
Ricardo Hausmann, Agata Łoskot-Strachota, Axel Ockenfels, Ulrich Schetter, Simone Tagliapietra, Guntram Wolff, and Georg Zachmann
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Following the Russian aggression against Ukraine, major sanctions have been imposed by Western countries, most notably with the aim of limiting Russia’s access to hard international currency. However, Russia remains the world’s first exporter of oil and gas, and at current energy prices this provides large hard currency revenues. As the war continues, European governments are under increased pressure to scale-up their energy sanctions, following measures taken by the United States, the United Kingdom, Canada and Australia. This piece argues that given the inelasticity of Russia’s oil and gas supply, for Europe the most efficient way to sanction Russian energy would not be an embargo, but the introduction of an import tariff that can be used flexibly to control the degree of economic pressure on Russia.
Topic:
Economics, Oil, Sanctions, Exports, Currency, Energy, and Russia-Ukraine War
Political Geography:
Russia, Europe, Ukraine, and North America

224. Trade Liberalization, Collective Bargaining and Workers: Wages and Working Conditions

Author:
Bastien Alvarez, Gianluca Orefice, and Farid Toubal
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
Using large scale data on Eastern European workers, we show significant and sizable deteriorations of their wages and working conditions in regions that faced large tariff liberalization and strong erosion of collective bargaining over the process of accession to the European Union. Import tariffs liberalization reduces workers' wages. The deterioration of working conditions is mostly driven by increased labor demand due to the improvement of Eastern countries' international market access. The erosion of collective bargaining worsens wages and working conditions.
Topic:
Labor Issues, Tariffs, Collective Bargaining, and Wages
Political Geography:
Europe and Eastern Europe

225. EU in Search of a WTO-Compatible Carbon Border Adjustment Mechanism

Author:
Cecilia Bellora and Lionel Fontagné
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
To meet the targets of the EU’s ”Fit for 55” package, the European Commission proposes to implement a Carbon Border Adjustment Mechanism (CBAM). The CBAM is firstly intended to avoid carbon leakages, but it also deals with the thorny issue of the compliance by European producers in carbon-intensive industries. In addition, its design, as voted by the European Council on March 15, 2022, questions the compatibility of the CBAM with World Trade Organization (WTO) rules. The CBAM puts a price on carbon contained in imported products whose production-related emissions have not been taxed (or not at the same level as in the European Union) by the exporter country, in order to offset the difference in carbon prices at the border. This paper aims to quantify the economic and environmental impacts of different CBAM design choices with the aim of complying with WTO rules. Different from the previous literature, we evaluate the various options with a dynamic general equilibrium model featuring imperfect competition, global value chains, green-house gas emissions and endogenous price of emission quotas. We show that CBAM is effective in reducing carbon leakages. But its design leads to an increase in the price of carbon quotas in the European Emission Trading System (ETS) market. Losses in competitiveness on export markets are expected, also for downstream sectors not covered by the EU ETS nor the CBAM. Eventually, offsetting the difference in carbon prices at the border comes at a cost to the enforcing jurisdiction, suggesting that the CBAM was not designed as a beggar-thy-neighbour policy.
Topic:
Energy Policy, International Trade and Finance, Regional Cooperation, European Union, Carbon Emissions, WTO, and Green Transition
Political Geography:
Europe

226. Second-generation immigrants and native attitudes toward immigrants in Europe

Author:
Oscar Barrera, Isabelle Bensidoun, and Anthony Edo
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper investigates the role played by immigrants and their children in shaping native attitudes toward immigrants in the European Union. By exploiting the 2017 Special Eurobarometer on immigrant integration, we show that countries with a relatively high share of immigrants are more likely to believe that immigrants are a burden on the welfare system and worsen crime. In contrast, native opinions on the impact of immigration on culture and the labor market are unrelated to the presence of immigrants. We also find that the effects of second-generation immigrants on pro-immigrant attitudes toward security and fiscal concerns are positive (as opposed to first-generation immigrants). Finally, we find no impact of the immigrant share on the attitudes of natives supporting far-left or left political parties, while it is the most negative among respondents affiliated with far-right parties.
Topic:
Children, European Union, Immigrants, Ideology, Welfare, and Nativism
Political Geography:
Europe

227. Regional Diffusion of Foreign Demand Shocks Through Trade and Ownership Networks

Author:
Lionel Fontagné and Gianluca Santoni
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
International demand shocks are transmitted within the trade and ownership firms' networks and impact directly or indirectly domestic firm productivity and labor misallocation. Considering manufacturing firms for Italy, Spain and France over the period 2009-2017, we quantify these transmission channels from the global economy to the domestic firms, and within the domestic economy across locations, sectors and firms. We compute in a shift share fashion international demand shock at the district-sector-year level as plausibly exogenous to individual firms. Our results confirm that global shocks are transmitted through trade networks and that this transmission is largely mediated by firms' ownership networks both across and within the borders of the three countries.
Topic:
Economics, International Trade and Finance, Demand, and Productivity
Political Geography:
Europe, France, Spain, and Italy

228. The Heterogenous Effects of Employers’ Concentration on Wages: Better Sorting or Uneven Rent Extracting?

Author:
Axelle Arquie and Julia Bertin
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
We show empirically for France that labor market concentration decreases wages heterogeneously, with the lowest earners being the most vulnerable, and increases local wage inequality within occupations. If concentration allows employers to improve worker selection, both inequality and efficiency gains could materialize. However, based on a simple formalization, we interpret the findings that employer concentration increases within-firm inequality and decreases between-firm inequality as evidence against such a sorting mechanism. We also find evidence that employer concentration does not increase positive assortative matching. The results therefore suggest that concentration increases inequality through the relatively reduced bargaining position of the lowest earners.
Topic:
Labor Issues, Inequality, Labor Market, and Wages
Political Geography:
Europe and France

229. The Usual Suspects: Offender Origin, Media Reporting and Natives’ Attitudes Towards Immigration

Author:
Sekou Keita, Thomas Renault, and Jerome Valette
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper analyses whether the systematic disclosure of criminals’ origins in the press affects natives’ attitudes towards immigration. It takes advantage of the unilateral change in reporting policy announced by the German newspaper Sächsische Zeitung in July, 2016. Combining individual-level panel data from the German Socio-Economic Panel from 2014 to 2018 with 402,819 crime-related articles in German newspapers and those newspapers’ market shares, we find that systematically mentioning the origins of criminals increases the relative salience of natives’ criminality and reduces natives’ concerns about immigration, breaking the implicit link between immigration and crime.
Topic:
Media, Immigrants, Discrimination, and Nativism
Political Geography:
Europe and Germany

230. Skilled Immigration, Task Allocation and the Innovation of Firms

Author:
Anna Maria Mayda, Gianluca Orefice, and Gianluca Santoni
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper analyses the impact of skilled migrants on the innovation (patenting) activity of French firms between 1995 and 2010, and investigates the underlying mechanism. We present district-level and firm-level estimates and address endogeneity using a modified version of the shift-share instrument. Skilled migrants increase the number of patents at both the district and firm level. Large, high-productivity and capital-intensive firms benefit the most, in terms of innovation activity, from skilled immigrant workers. Importantly, we provide evidence that one channel through which the effect works is task specialization (as in Peri and Sparber, 2009). The arrival of skilled immigrants drives French skilled workers towards language-intensive, managerial tasks while foreign skilled workers specialize in technical, research-oriented tasks. This mechanism manifests itself in the estimated increase in the share of foreign inventors in patenting teams as a consequence of skilled migration. Through this channel, greater innovation is the result of productivity gains from specialization.
Topic:
Business, Immigrants, Innovation, and Skilled Labor
Political Geography:
Europe and France

231. Current Account Balances’ Divergence in the Euro Area: an Appraisal of the Underlying Forces

Author:
Emmanuelle Faure, Carl Grekou, and Valérie Mignon
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper revisits the crucial issue of current account imbalances and focuses on the determinants of their gaps between eurozone Member States. We conduct robust estimations of the current account balances for a panel of ten founding euro area economies and construct a measure that allows us to diagnose why some countries have started to diverge from the eurozone mean in the last two decades. Our findings show evidence of remaining differences in countries’ economic development, meaning that real macroeconomic convergence has failed in the zone. Price and cost competitiveness, as well as fiscal balances, have also participated in this growing macroeconomic divergence. Overall, while the European authorities cannot influence the part of the current account gaps due to demographic factors, the role of fiscal redistribution and investment at the euro area level could help achieve macroeconomic convergence and thus reduce current accounts’ divergence in the zone.
Topic:
Economics, Regional Cooperation, European Union, Eurozone, and Regionalism
Political Geography:
Europe

232. Everything Counts: Building a Control Regime for Nonstrategic Nuclear Warheads in Europe

Author:
Miles A. Pomper, William Alberque, Marshall L. Brown Jr., William M. Moon, and Nikolai Sokov
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
James Martin Center for Nonproliferation Studies
Abstract:
Before the Russian invasion of Ukraine, the Biden administration insisted in arms control talks with Russia that a follow-on agreement to the New Strategic Arms Reduction Treaty (New START) should cover all nuclear weapons and that such an agreement should focus on the nuclear warheads themselves. This would represent a significant change from previous agreements, which focused on delivery vehicles, such as missiles. The United States has been particularly interested in potential limits on nonstrategic nuclear warheads (NSNW). Such weapons have never been subject to an arms control agreement. Because Russia possesses an advantage in the number of such weapons, the US Senate has insisted that negotiators include them in a future agreement, making their inclusion necessary if such an accord is to win Senate approval and ultimately be ratified by Washington. In the wake of Russian nuclear threats in the Ukraine conflict, such demands can only be expected to grow if and when US and Russian negotiators return to the negotiating table.
Topic:
Arms Control and Proliferation, Diplomacy, Treaties and Agreements, Military Strategy, and Nonproliferation
Political Geography:
Russia, Europe, North America, and United States of America

233. Russian-Turkish Relations and Implications for U.S. Strategy and Operations

Author:
Hanna Notte and Chen Kane
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
James Martin Center for Nonproliferation Studies
Abstract:
Russia and Turkey’s complex relationship has significant implications for U.S. and North Atlantic Treaty Organization (NATO) strategic interests. The two states cooperate, deconflict, and compete in multiple theatres within Turkey’s extended neighborhood, which straddles United States Africa Command (USAFRICOM), United States Central Command (USCENTCOM), and United States European Command (USEUCOM) areas of responsibility (AORs). 1 Their bilateral strategic trade has created mutual dependencies and vulnerabilities across multiple sectors, such as natural gas, nuclear energy, and tourism. Russia’s invasion of Ukraine in February 2022 has many implications for the Russia-Turkey relationship. While engaging actively with Russia and stoking fears that its commercial ties with Moscow could serve Russia’s evasion of Western sanctions, Turkey has also provided TB2 Bayraktar drones to Ukraine, invoked the Montreux Convention, and offered itself as a mediator on various operational issues in the Russia-Ukraine war. As a result of these steps, Turkey’s leverage over both Russia and NATO allies has increased since February 2022. From a U.S. perspective, the implications have been mixed as Turkey has translated its increased leverage into foreign policy steps that threaten to undermine U.S. interests and NATO cohesion. Turkey remains of significant importance to the United States in enabling its interests in the three aforementioned AORs, preventing third actors like China and Iran from operating in the “seams,” and generating an enhanced, unified, and credible NATO capability and capacity in response to Russian aggression. It follows that Turkey’s interplay with Russia in its extended neighborhood has far-reaching implications for the United States and NATO. This study aims to shed light on this relationship, its likely trajectory over the coming decade, its implications for U.S. strategic interests, and how the United States and NATO might shape the Russia- Turkey interplay to their advantage.
Topic:
Security, Diplomacy, International Cooperation, Bilateral Relations, and Conflict
Political Geography:
Russia, Europe, Turkey, North America, and United States of America

234. The African-France Summit and an Overview of its Recommendations Since 1973

Author:
Fabien Sundjo
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
France’s earliest profit-making involvement in Africa in the business of buying and transporting slaves started in the 17th century when the local Indian population proved unable to work in plantations in America compared to black Africans. France’s interest in Africa reached its zenith in the 19th and early 20th centuries when France acquired a gigantic African empire. Though several reasons could explain the scramble for Africa by France, we present herein the three most important. First, the defeat of France in the 1870 Prussian war in which she lost influence and a reduction in her international ego. Second, the anxiety to implement Colbert’s mercantilist philosophy emphasized that any rising industrial power required to have both the source of raw materials and market extension under her control. Third and finally, as Europeans scrambled for Africa, France feared their traditional enemies could annex a remarkable share of the territory. Hence, from the outset, it was not the financial gains that many thoughts motivated France’s involvement in Africa but politics and national ego. It will only be later that France saw Africa as a cheap source of military manpower that could help balance demographic stagnation in France. This perception will later be reinforced by her experience in the two World wars. In this light, Iliffe (2007) holds that French colonial policy was characterized by the exploitation of rich resources from Africa. In the midst of all these benefits from colonization in Africa, Charles de Gaulle‘s decision to retain influence in Africa after decolonization in 1960 was driven by the need to persist with these benefits under neo-colonization. According to Abdurrahim (2014), in Africa, France uses a realist foreign policy in which states shape their foreign policies based on their national interests. To facilitate the implementation of this realist foreign policy, France will design the Franco-African summit that will cement France’s influence in her former colonies to date. Were France’s policies put in place through the Franco-African summits shaped to benefit France solely? This paper aims to present the Franco-African Summit and carry out a stocktake of France’s commitments through recommendations from the Franco-African Summit.
Topic:
Security, Foreign Policy, Diplomacy, International Cooperation, and Regional Cooperation
Political Geography:
Africa, Europe, and France

235. Taking the road away from Europe – how far could Georgia go (and can it be reversed)?

Author:
Ghia Nodia
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Earlier this year, as a result of the Russian invasion of Ukraine, Moldova and Ukraine were granted official EU candidate status… but not Georgia. Instead, Georgia has been left behind on the waiting list, with its application due to be reevaluated by the EU sometime in 2023. Yet Georgia has an extremely pro-European society highly in favour of their country continuing its journey towards closer integration with the EU. So what happened? This CEPS Explainer argues that the ruling Georgian Dream party’s anti-Western rhetoric and democratic backsliding has actually diverted Georgia down a road away from its key Western allies. Until this is rectified, Georgia may be stuck on the waiting list for some time yet. But all hope is not lost – regardless of the government’s current actions and contradictory statements, Georgia’s highly active and pro-European civil society may hold the key in getting their country back on track towards its European future.
Topic:
European Union, Regional Politics, Democratic Backsliding, and Russia-Ukraine War
Political Geography:
Europe, Eurasia, and Georgia

236. Understanding Russia’s perception of international agency in the context of the war against Ukraine

Author:
Andrey Makarychev
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Russia’s invasion of Ukraine has dominated international politics in 2022 and this looks likely to continue for the foreseeable future. But how did we get to this point in the first place? The core argument presented here is that Russian foreign policy agency – the intention and the ability to act as transgressor and challenger to the liberal international order, defined as the space for norms-based multilateralism – played the key role in the full-fledged restart of the war in Ukraine in February 2022. Taking a critical look at the five pillars of Russian agency, this inaugural CEPS Explainer concludes that the current model of Russia’s international agency is a precarious and vulnerable construct that is unlikely to survive the regime currently sat in the Kremlin.
Topic:
Foreign Policy, Multilateralism, International Order, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

237. Europe’s Area of Maritime Interest in Northeast Asia

Author:
Philip Shetler-Jones
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Participation in the monitoring of UN sanctions on North Korea is Europe’s most prominent operational contribution to Indo-Pacific security, but is also characterised by a fragmented, bilateral approach that contradicts the trajectory of recent European policies that strive for a more meaningful and coordinated investment in this area. A coordinated European presence in the region built around the sanctions monitoring task is within reach, and steps taken to achieve it would dramatically enhance the policy coherence and impact of European action on Northeast Asian security.
Topic:
Security, Foreign Policy, Military Affairs, European Union, and Maritime
Political Geography:
Europe, Asia, and North Korea

238. Putin vs Monnet: European Resilience, Energy and the Ukraine War

Author:
Nathalie Tocci
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
As the Ukraine war escalates with no end in sight, Europe’s resilience is put to test. Nowhere is this clearer than in the energy sphere, where the crisis first created the perfect timing for Russia’s invasion and then became weaponised against Europe in the broader confrontation with the West. In this confrontation, two interpretations of resilience come to the fore: Vladimir Putin and Jean Monnet’s, with the former emphasising pain endurance and the latter transformation through crisis. The jury is out on whether Putin or Monnet will win the day, and whether and how the European Union will prove and strengthen its resilience. But at the height of this crisis, my bet today is squarely on Jean Monnet.
Topic:
Climate Change, Politics, European Union, Institutions, Energy, and Russia-Ukraine War
Political Geography:
Russia and Europe

239. The Russian Economy Is Muddling Through the Sanctions War

Author:
Oleg Buklemishev
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The transatlantic campaign of sanctions against Russia after its aggression of Ukraine is unprecedented in scale and scope, involving not only dozens of democratic states but also many non-state actors. It imposes considerable barriers and additional cost to the functioning of the Russian economy, which is bound to undertake deep restructuring with far-reaching consequences for production and consumption processes. The current appreciation of the rouble and inflationary slowdown are not signs of improvement but rather the direct effects of the stabilisation measures undertaken and, in fact, bode ill for further economic development. Numerous problems have started to surface this summer and optimistic assessments on the basis of initial resilience of the Russian economy look premature. Russia currently lacks a strategic plan of economic restructuring under the new environment. The future course of events will depend on whether the private sector leads this restructuring with minimal losses or the government imposes its normative prospective, tilting the result farther from economic equilibrium.
Topic:
Sanctions, European Union, Economy, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

240. The Geopolitics of Clean Hydrogen – Opportunities and Challenges for Italy

Author:
Marco Giuli
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The emergence of clean hydrogen as an energy carrier promises to shape the future geography of the energy trade. Under growing contestation of interdependence, such a geography should be read through political lenses alongside commercial and technological ones. Generally, hydrogen is likely to reduce the geopolitical sensitivity of energy trade with respect to a fossil-fuel-based energy order by increasing the share of energy produced domestically, shifting geostrategic competition from a focus on grabbing resources to a focus on mastering technology and setting standards, and offering petrostates opportunities for economic diversification. Italy can exploit the opportunities offered by a hydrogen economy for enhancing its energy security and positioning in the regional energy trade. However, it should be careful with monitoring how geopolitical barriers such as regional instability may affect its hydrogen ambitions.
Topic:
Geopolitics, Trade, Hydrogen, Pipeline, and Energy
Political Geography:
Europe and Italy

241. A Scramble for Gas: Qatari LNG and EU Diversification Plans

Author:
Pier Paolo Raimondi
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Amidst a worsening geopolitical and energy crisis in Europe, the EU is scrambling to increase liquefied natural gas (LNG) imports as one component of its larger objective to reduce its overdependence on Russian gas. In 2021, the EU imported 155 billion cubic metres (bcm) of natural gas from Russia (140 bcm via pipeline and 15 bcm of LNG). Under its REPowerEU initiative, the European Commission aims to increase LNG imports to replace 50 bcm of Russian gas by the end of 2022.
Topic:
European Union, Geopolitics, Gas, Diversification, and Energy
Political Geography:
Europe and Qatar

242. The Implications of the Ukraine War for Israel

Author:
Efraim Inbar
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Jerusalem Institute for Strategy and Security (JISS)
Abstract:
For Israel, this is evidence that its self-reliance doctrine must be nourished with no illusions about foreign support in times of crisis. Moreover, Turkey probably sees NATO more positively since it borders Russia, pushing Ankara toward the West.
Topic:
Defense Policy, NATO, Diplomacy, Military Strategy, and Russia-Ukraine War
Political Geography:
Russia, Europe, Turkey, Ukraine, Middle East, and Israel

243. The “New Uzbekistan”: Turkey’s New Partner in the Pan-Turkist Organization of Turkic States

Author:
Hay Eytan Cohan Yanaroack
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Jerusalem Institute for Strategy and Security (JISS)
Abstract:
Tashkent’s increasingly critical approach toward Russia and its deepening role in the Organization of Turkic States has positioned the country as Ankara’s most important bridgehead in Central Asia.
Topic:
Security, Diplomacy, Military Strategy, and Conflict
Political Geography:
Russia, Europe, Central Asia, and Turkey

244. The differences between Western and non-Western US allies in the Ukraine war

Author:
Jonathan Spyer
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Jerusalem Institute for Strategy and Security (JISS)
Abstract:
For mid-level regional powers, avoiding non-essential friction with a major power like Russia is seen as an imperative, particularly in a situation where consistent support from their US patron is by no means a given.
Topic:
International Relations, Security, Diplomacy, and Russia-Ukraine War
Political Geography:
Russia, Europe, Ukraine, North America, and United States of America

245. Japan and the War in Ukraine

Author:
Eyal Ben-Ari
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Jerusalem Institute for Strategy and Security (JISS)
Abstract:
Two weeks after the war began, Japan announced that its new National Security Strategy scheduled to be published this year would recategorize Russia from “partner” to “security challenge,” thus placing it alongside China and North Korea.
Topic:
Security, Defense Policy, Military Strategy, and Conflict
Political Geography:
Russia, Japan, China, Europe, and Asia

246. What is the agenda for the Eastern Mediterranean?

Author:
Efraim Inbar
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Jerusalem Institute for Strategy and Security (JISS)
Abstract:
A more coherent common foreign policy agenda is needed to enhance the strategic significance of the Athens-Jerusalem-Nicosia partnership.
Topic:
Security, Foreign Policy, Diplomacy, International Cooperation, and Peace
Political Geography:
Europe, Middle East, Israel, Greece, Cyprus, and Mediterranean

247. British Pugwash Note on the Absence of Sole Purpose in NATO’s 2022 Strategic Concept

Author:
Pugwash Conferences on Science and World Affairs
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Pugwash Conferences on Science and World Affairs
Abstract:
In June 2022 NATO members adopted an updated Strategic Concept (the preceding Concept having been adopted in 2010). There was reason to hope that in the updated Concept NATO members would envisage using nuclear weapons only in response to their first use by a nuclear-armed adversary. That reason lay in remarks made by President Biden when he was Barack Obama’s Vice-President. Notably in January 2017 he said: “Given our non-nuclear capacities and the nature of today´s threats, it is hard to envision a plausible scenario in which the first use of nuclear weapons by the United States would be necessary or would make sense; deterring, and, if necessary, retaliating against a nuclear attack should be the sole purpose of the US nuclear arsenal”. The adoption of Sole Purpose would be a useful nuclear risk reduction measure. Leaving open the option of using nuclear weapons in response to a non-nuclear attack on NATO entails the risk of nuclear escalation if the attacker is nuclear armed; and nuclear escalation entails the risk of global nuclear annihilation.
Topic:
Security, Defense Policy, NATO, Regional Cooperation, and Military Strategy
Political Geography:
Europe and North America

248. Russia’s threat against the Jewish Agency is a Bargaining Measure

Author:
Daniel Rakov
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Jerusalem Institute for Strategy and Security (JISS)
Abstract:
Israel should prepare for a prolonged crisis. The Russians might want to delay or accelerate the legal process to exploit the elections period. The verdict will not constitute the final word. The government is advised to navigate the crisis behind the scenes: publicity might accelerate escalation.
Topic:
Security, Defense Policy, Military Strategy, Conflict, and Russia-Ukraine War
Political Geography:
Russia, Europe, Israel, and North America

249. Ukraine War Distracts US from China, Legitimizes Nuclear Bombs

Author:
Efraim Inbar
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Jerusalem Institute for Strategy and Security (JISS)
Abstract:
Russia’s invasion of Ukraine is distracting the US from the Chinese threat and erodes the nuclear taboo.
Topic:
Security, Defense Policy, Conflict, Rivalry, and Russia-Ukraine War
Political Geography:
Russia, China, Europe, Ukraine, Asia, North America, and United States of America

250. The Libyan EEZ Challenge: Israel Should Reject Turkey’s Claims in the Eastern Mediterranean

Author:
Eran Lerman
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Jerusalem Institute for Strategy and Security (JISS)
Abstract:
The delineation of the Libyan and Turkish Exclusive Economic Zones was and remains essential not only for Israel and Egypt but also for others in the region who seek to curtail Erdogan’s ambitions and shore up Egypt’s economic and political stability.
Topic:
Security, Diplomacy, Territorial Disputes, and Conflict
Political Geography:
Europe, Turkey, Middle East, Israel, and Mediterranean

251. It is in America’s Interest to End the War in Ukraine

Author:
Efraim Inbar
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Jerusalem Institute for Strategy and Security (JISS)
Abstract:
Continuing the war harms the West and endangers its battle to attain other critical strategic objectives.
Topic:
Defense Policy, Military Strategy, Hegemony, and Strategic Interests
Political Geography:
Russia, Europe, Ukraine, North America, and United States of America

252. Measuring the intangible economy to address policy challenges

Author:
Marie Le Mouel
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
European economies exhibit the so-called ‘productivity puzzle, whereby investments’ in digital technologies and intangible assets have not delivered the hoped-for productivity gains. Explanations for this puzzle lie in the unequal ability of companies to make use of these technologies, and resulting patterns of market concentration, productivity divergence and dampened business dynamism. Access to firm-level data is essential to properly understand these rich dynamics. The purpose of the first work package of the MICROPROD project was to improve the firm-level data infrastructure, expand the measurement of intangible assets and enable cross-country analyses of these productivity trends. The MICROPROD researchers developed the Micro Data Infrastructure (MDI), a centralised platform that harmonises access to the firm-level data gathered by national statistical institutes. The data infrastructure developed through this work package offers valuable insights into the evolution of productivity across the European Union and into the effects of digitalisation and globalisation. It can thus generate important evidence for designing policies to support the European Commission’s policy objectives, especially for achieving the digital and green transitions. In addition, the research enabled by this data infrastructure and carried out within the context of MICROPROD can provide valuable lessons about the response of European economies to the COVID-19 pandemic and its aftermath.
Topic:
Infrastructure, European Union, Digital Economy, Economy, and COVID-19
Political Geography:
Europe and Global Focus

253. The low productivity of European firms: how can policies enhance the allocation of resources?

Author:
Gregory Claeys, Giovanni Sgaravatti, and Marie Le Mouel
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
This paper summarises the most important policy lessons from the research undertaken in the MICROPROD project, work package 4, related to the allocation of the factors of production, with a special focus on the weak dynamism of European small and medium-sized enterprises (SMEs). In particular, MICROPROD work package 4 investigated the impact of labour market institutions and skill shortages on firm dynamism, and which types of (foreign) competition are conducive for total factor productivity (TFP) maximizing factor allocation. The papers of this work package also explored the side effects of unconventional monetary policy and of forbearance in bank restructuring for the survival of ‘zombie’ firms, and for employment growth and the TFP of new SMEs.
Topic:
Monetary Policy, Business, Productivity, and Resource Allocation
Political Geography:
Europe

254. Is the workforce ready for the jobs of the future? Data-informed skills and training foresight

Author:
Fabian Stephany and Rosemary Luckin
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
For many newly emerging jobs, labour-market mismatches prevail as workers and firms are unable to apply precise occupation taxonomies and training lags behind workforce needs. We report on how data can enable useful foresight about skill requirements and training needs, even when that data has not been collected for this express purpose. First, we show how online generated freelance data can help monitor labour-market developments in the short run. Second, in the long run, we illustrate how data can shed light on development of workplace-ready aptitudes among students, even when these are not the direct focus of instruction. This combination of data-intensive activities can inform the immediate and long-term needs for education and training in order to help individuals develop the ability to learn, train and retrain as often and as much as needed.
Topic:
Business, Training, Data, Labor Market, Workforce, and Skills
Political Geography:
Europe and Global Focus

255. Raising EU productivity through innovation

Author:
Reinhilde Veugelers and Frederic Warzynski
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Research and development is seen as a key contributor to growth because it generates knowledge, leading to new or improved products through product innovation, and makes firms more efficient at producing goods through process innovation. Firm level studies generally find evidence of strong positive productivity effects for firms that invest in R&D. In this context, digital systems could be an important driver of productivity growth, particularly in combination with investments in R&D. But there has been little hard evidence of a significant productivity boost from digital technologies. How the relationship between productivity growth, innovation and digital technology adoption plays out is particularly important for the European Union, where productivity growth has long been weak. Researchers from the MICROPROD project have assessed the effect of technology investment on productivity and performance. Combining recent unique firm-level data and state-of-the art research methodologies, MICROPROD research provides a better overview of which firms are most likely to adopt digital technologies and to innovate, and to turn these investments into productivity growth.
Topic:
European Union, Investment, Innovation, and Productivity
Political Geography:
Europe

256. Measuring macroeconomic uncertainty during the euro’s lifetime

Author:
Monika Grzegorczyk and Francesco Papadia
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
It is a cliché in official economic institutions’ publications and their leaders’ speeches to lament exceptional uncertainty. The complaint does, however, ring true currently. A solid empirical basis should be given to this view by properly measuring macroeconomic uncertainty. To measure macroeconomic uncertainty, we start from observable forecasts of macroeconomic variables, which are transformations of underlying economic conditions. By observing how forecasts change over time, we measure the flow of macroeconomic surprises. The more intense the flow of surprises, the greater uncertainty can be said to be. Greater differences among forecasts are also evidence of uncertainty. We draw out four indicators of macroeconomic uncertainty, measured over the lifetime of the euro: How the macroeconomic forecasts of a given institution for the same time period change over time; How the macroeconomic forecasts of a given institution deviate from realised outcomes; How the macroeconomic forecasts of different institutions deviate from one other; How dispersed the forecasts of different professionals are. We also measure whether the ‘stag-‘ or the ‘-flationary’ component is stronger in the overall stagflationary shock caused by the Russian invasion of Ukraine.
Topic:
Economy, Institutions, Macroeconomics, Uncertainty, and Euro
Political Geography:
Europe and Global Focus

257. What If the EU Did Not Share Data to Protect Its Critical Infrastructure?

Author:
Päivi Mattila-Wiro and Isto Mattila
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
This scenario shows what could happen if the EU fails to establish an information exchange environment among its critical infrastructure (CI) entities. In 2030, only a few services related to the EU’s CI remain local and confined to a single domain. Most are heavily interconnected – and thus increasingly subject to hybrid attacks. Because the EU still provides no common guidelines to record and share information about such attacks, CI operators cannot analyze threats, recognize EU-wide patterns, or identify adversaries. Two EU directives from the early 2020s recognized this gap but did not provide the tools to address it.
Topic:
Science and Technology, Infrastructure, European Union, and Data
Political Geography:
Europe

258. War or Peace? Turkish Moves in Syria

Author:
Gallia Lindenstrauss and Carmit Valensi
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
Recent increased attacks on Kurdish targets in northern Syria by Turkey and the Syrian rebel groups its supports raise the question whether Turkey’s President Recep Tayyip Erdogan intends to carry out his threat of May 2022 to begin another major ground operation against the Kurds. On the other hand, conciliatory statements regarding the Assad regime have been sounded recently in Turkey, and there has been discussion of the possibility of normalizing relations between the two countries after over a decade of hostility and competition. These two processes appear to be contradictory, given that the Syrian regime opposes existing Turkish control of Syrian territories, and does not wish to see this control broadened. On the other hand, this may be a calculated Turkish move that aims to show the Turkish public a concerted multi-faceted effort to confront both the Kurdish underground and the issue of Syrian refugees in Turkey. Discussion of events in northern Syria and the web of Syrian and Turkish interests can be used to assess the question, which trend will prevail in Turkish-Syrian relations: normalization or escalation?
Topic:
War, Military Strategy, Homeland Security, Peace, and Strategic Interests
Political Geography:
Europe, Turkey, Middle East, and Syria

259. Normalization between Turkey and Israel: Will it Last?

Author:
Gallia Lindenstrauss and Remi Daniel
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
The decision by Turkey and Israel to normalize their relations stems from several processes that brought the Turkish side to push for normalization and the Israeli side to respond affirmatively. Yet alongside the serious motivations of the two sides to continue this process, there are issues that could become obstacles. Among them are the developments between Israel and the Palestinians, Turkey-US relations, the dynamics of Turkey's integration in processes related to the Abraham Accords, and the nature of future Israeli plans regarding gas exports. Nonetheless, coping with challenges related to these issues will be easier with senior diplomatic representation present in both countries.
Topic:
Diplomacy, Bilateral Relations, Normalization, and Strategic Interests
Political Geography:
Europe, Turkey, Middle East, Israel, and Asia

260. Putin and Erdogan Meet in Sochi: Another Challenge to the Western Bloc

Author:
Bat Chen Druyan Feldman, Gallia Lindenstrauss, and Arkady Mil-Man
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
The Presidents of Russia and Turkey held a four-hour meeting recently in Sochi, along the shores of the Black Sea, and discussed a range of subjects, from trade and energy to involvement in different combat arenas. What are the two leaders’ respective interests in their dialogue – and what should Israel conclude from the deepening cooperation between Ankara and Moscow?
Topic:
Diplomacy, Bilateral Relations, Hegemony, Conflict, and Strategic Interests
Political Geography:
Russia, Europe, and Turkey

261. The Iranian-Russian-Turkish Summit in Tehran

Author:
Raz Zimmt, Gallia Lindenstrauss, Bat Chen Druyan Feldman, and Arkady Mil-Man
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
The three-way summit between Presidents Raisi, Putin, and Erdogan intended to present a unified front against the Western axis, which imposes various levels of sanctions on the three states. But despite the cordial photos and warm handshakes, there are serious disputes between Tehran, Moscow, and Ankara. They are rivals no less than they are partners, and it is doubtful whether their meeting will lead to any substantive gains
Topic:
Diplomacy, International Cooperation, Hegemony, and Strategic Interests
Political Geography:
Russia, Europe, Iran, Turkey, and Middle East

262. Macron Put Down, France in Crisis: Implications for Israel

Author:
Remi Daniel
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
As a result of the recent elections in France, President Macron no longer enjoys a majority in parliament, and it remains unclear how he will be able to continue to lead his country. This unusual situation points to a severe political crisis that will require the various actors to adopt or devise new political methods. Beyond the internal significance for France, what are the implications for Israel?
Topic:
Foreign Policy, Elections, Leadership, and Foreign Interference
Political Geography:
Europe, Middle East, Israel, and France

263. Between Erdogan, Mitsotakis, and Biden: The Evolving Ankara-Athens-Washington Triangle

Author:
Gallia Lindenstrauss, Christoph Becker, and Remi Daniel
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
“The Prime Minister of Greece no longer exists for me,” declared Turkey’s President, reflecting a break in the rapprochement seen over the past year between Ankara and Athens. What lies behind this change of approach, and how does this affect Israel’s relations with Eastern Mediterranean states?
Topic:
Diplomacy, International Cooperation, Regional Cooperation, and Leadership
Political Geography:
Europe, Turkey, Greece, North America, United States of America, and Mediterranean

264. The War in Ukraine: More Western Aid and Fear of Escalation

Author:
Eldad Shavit and Shimon Stein
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
The United States and other NATO countries have thus far not deviated from their policy regarding the war in Eastern Europe – military and economic assistance, with no boots on the ground. Yet the more the war continues, and while there is a chance of significant escalation, does this policy stand to change?
Topic:
Military Strategy, Conflict, Escalation, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

265. The Gulf Countries and Turkey: (Re-)Drawing the Map of Alliances in the Middle East

Author:
Yoel Guzansky and Gallia Lindenstrauss
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
After a decade of hostility, and against the background of Turkey’s weak economic situation and Iran’s expanded regional presence, there is a significant improvement in the relations between Ankara and Abu Dhabi and Riyadh. What opportunities might this change bring for the region, and how might this affect Israel’s relations with Turkey and with the Gulf countries?
Topic:
International Cooperation, Alliance, Strategic Interests, and Regional Power
Political Geography:
Europe, Turkey, Middle East, and Gulf Nations

266. The Russia-Ukraine War: Where Do We Go from Here?

Author:
Zvi Magen and Sophie Kobzantsev
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
Two months after the start of Russia’s invasion of Ukraine, the goal of a short campaign has clearly not been achieved. Russia now seeks to achieve gains while suspending the negotiations with Kyiv – both to improve its position in advance of future negotiations, and to deliver the message to the West that “you cannot stop us.”
Topic:
Military Strategy, Hegemony, Conflict, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

267. Investigation of Russia's Crimes in Ukraine: A Turning Point for the International Criminal Court?

Author:
Ori Beeri and Pnina Sharvit Baruch
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
The Chief Prosecutor at The Hague has already begun to investigate actions taken by Russia in the Ukrainian arena, while accelerating judicial proceedings and bureaucracy. This reflects a change of approach, which includes the prioritization of recent events, as part of an effort to strengthen the status of the Court. How will this affect the investigation of the war in Eastern Europe – and the investigation concerning Israel?
Topic:
Military Strategy, Conflict, International Crime, and Russia-Ukraine War
Political Geography:
Russia, Europe, Ukraine, and Global Focus

268. Walking a Fine Line: Turkey’s Mediation between Russia and Ukraine, and Relations with the West

Author:
Remi Daniel and Gallia Lindenstrauss
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
Turkey’s reaction to the Russian aggression in Ukraine was among the more moderate responses heard from NATO members. With an eye to the post-war situation, Ankara is trying to walk a tightrope and not overly provoke either side. What lies behind this Turkish policy, and is it viable?
Topic:
Security, Diplomacy, Conflict, and Mediation
Political Geography:
Russia, Europe, Turkey, and Ukraine

269. The Ukrainian Civil Front – An Interim Assessment

Author:
Meir Elran, Uri Bar-Yosef, and Zvi Magen
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
Most of Ukraine’s civilian population demonstrates a high degree of steadfastness during the war, rallying around the flag – and around the president. Nonetheless, the challenge to Ukrainian national resilience remains high, given the huge waves of migration, the losses in the hinterland, and the severe damage to national infrastructure and the local economy – which could have decisive effects on Ukraine’s ability to recover from the war
Topic:
Defense Policy, War, Military Strategy, and Conflict
Political Geography:
Russia, Europe, and Ukraine

270. After the Russian “Ruse,” China Looks for New Friends

Author:
Galia Lavi
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
With the Russian invasion of Ukraine, it would seem that Beijing and Moscow should be a united front against the West. But in actuality, China has been surprised by the scale of the Russian aggression and is now rethinking its position in the geopolitical arena. How will this affect the Middle East?
Topic:
Foreign Policy, Military Strategy, Conflict, and Strategic Interests
Political Geography:
Russia, China, Europe, and Asia

271. MF Dollars for Dictators? The Allocation of SDR to Moderate and Isolated Countries

Author:
Haggy Etkes
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
“The International Monetary Fund assisted radical regimes, including the Russian government and the Taliban in Afghanistan”: This claim was made given the allocation of Special Drawing Rights (SDR) by the IMF to states in the region. Is there truth to this charge?
Topic:
Economics, International Cooperation, Finance, and IMF
Political Geography:
Afghanistan, Russia, Europe, and Middle East

272. Intelligence and the War in Ukraine: The Limited Power of Public Disclosure

Author:
Ofek Reimer
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
Months before the Russian invasion of Ukraine, the West began to disclose intelligence material on Putin’s plans – thereby using a policy tool that brings with it both advantages and risks. What did the intelligence disclosures achieve, and what might Israel learn from this experience?
Topic:
Defense Policy, Intelligence, Military Strategy, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

273. Will Russia Use Nuclear Weapons in Ukraine?

Author:
Helit Barel
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
One month into the war in Ukraine, the nuclear threat remains. Will Russia’s President decide to use nuclear weapons on the battlefield, and thereby shatter the 77 years of nuclear deterrence? From a rational perspective, there is little likelihood of this occurring, but thus far Putin has not succeeded in realizing his goals in the Ukrainian theater – and Russia has a large arsenal of tactical nuclear weapons
Topic:
Arms Control and Proliferation, Nuclear Weapons, Military Strategy, and Strategic Interests
Political Geography:
Russia, Europe, and Ukraine

274. Underreporting of Russian Investments Abroad: Are the Sanctions Undermined?

Author:
Haggy Etkes
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
There are indications of underreporting to Western authorities of Russian investments worth about 90 billion dollars, when Russian reports of investments abroad are compared with Western data. If correct, this undermines the effectiveness of the asset freezing that is part of the sanctions imposed by the West following Russia’s invasion of Ukraine
Topic:
Foreign Policy, International Cooperation, Sanctions, and Conflict
Political Geography:
Russia and Europe

275. The War in Ukraine: The Challenge of Shaping an Endgame

Author:
Udi Dekel
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
Although nearly three weeks have passed since Putin invaded Ukraine, there is no framework for an endgame on the horizon. While the United States and the West would like to bring Putin to his knees as he sinks deeper in the Ukrainian mud, Washington must recognize that the longer the war continues, the chances increase for escalation to new levels that neither side wants. Therefore, before the situation is completely out of control, there must be a dialogue with Russia that can lead to an end to the war.
Topic:
Diplomacy, Military Strategy, Conflict, Peace, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

276. Is Ukraine Poised to Join NATO and the European Union?

Author:
Oden Eran and Shimon Stein
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
Following the Russian invasion of Ukraine, there are more and more voices in the West calling for Kiev’s acceptance into NATO and the European Union. However, this is not the time for rapid measures. Now that Putin has backed himself int a corner, the United States and Europe, in parallel with the harsh sanctions imposed on Russia and the assistance to Ukraine, must leave Moscow a way out
Topic:
Defense Policy, NATO, International Cooperation, and European Union
Political Geography:
Europe, Ukraine, and North America

277. Putin’s Dilemma

Author:
Ofer Shelah
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
After more than two weeks of war in Ukraine, initial conclusions can already be drawn. Chief among these is the realization that force application in complicated conditions can confront a decision maker with a serious dilemma, in which precisely a military achievement may destroy any possibility of scoring a political achievement
Topic:
Military Strategy, Leadership, Conflict, and Russia-Ukraine War
Political Geography:
Russia and Europe

278. Germany and the Ukraine Crisis: End of the Age of Illusions

Author:
Shimon Stein
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
Russia’s invasion of Ukraine has sent shockwaves through Germany’s political-security approach of the last decades, and recent speeches in the Bundestag reflect the government’s intention to make system-wide changes in security orientation. Germany must also understand how it missed warning signs from Russia over the years, and formulate a clear policy that addresses the emerging worrisome trends
Topic:
Security, Conflict, Strategic Interests, and Russia-Ukraine War
Political Geography:
Europe, Ukraine, and Germany

279. The Russian Invasion of Ukraine: Legal Aspects

Author:
Pnina Sharvit Baruch and Ori Beeri
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
Since Russia invaded Ukraine, it has been the object of significant legal pressure. While the various legal measures have no power to stop the bloody war, they deliver a powerful, unequivocal message: any state that flagrantly violates international world and undermines the world order will suffer isolation, condemnation, sanction, and criminal investigations. Israel, which has seemed to lean to sitting on the fence, must join the international efforts against Russia, Otherwise it is liable to find itself on the wrong side of history
Topic:
Military Strategy, Law, Conflict, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

280. The Ukraine Crisis: An Interim Analysis

Author:
Eldad Shavit, Zvi Magen, and Shimon Stein
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
Although Russia’s invasion of Ukraine began only days ago, it is already clear that with this belligerence Putin has upset the world order that has existed since the Second World War. The Western bloc has already begun to realign and is presenting a unified and forceful stance vis-à-vis Moscow. Israel can no longer avoid taking a clear stand and siding fully with the countries opposing Russia
Topic:
Military Strategy, Conflict, Strategic Interests, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

281. FDI Spillover Effects on Innovation Activities of Knowledge-using and Knowledge-creating Firms: Evidence from an Emerging Economy

Author:
Iraj Hashi, Mehtap Hisarciklilar, Slavo Radošević, Nebojša Stojčić, and Nina Vujanović
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
The beneficial effects of innovation for firms’ performance and competitiveness are well documented, but it has been suggested in recent years that innovation regimes differ between advanced and emerging economies. While advanced economies rely on knowledge generation, their emerging counterparts follow mainly a knowledge-use regime through the application of existing knowledge and technology. Climbing up the technological ladder can be helped through spillovers from foreign investors to local firms. We investigate whether FDI spillovers influence different phases of the innovation process (from decision to innovate to productivity) among knowledge-using and knowledge-creating firms in an emerging European economy. The results show that the innovation process in emerging economies is closer to the imitation than the creation of novel products. Local firms benefit from foreign counterparts in the early phase of the innovation process. Stronger FDI effects are found among firms that undertake innovation through knowledge use rather than through knowledge generation.
Topic:
Emerging Markets, International Trade and Finance, Foreign Direct Investment, Economy, Investment, and Knowledge Systems
Political Geography:
Europe

282. Industrial Robots, and Information and Communication Technology: The Employment Effects in EU Labour Markets

Author:
Stefan Jestl
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper explores the effects of industrial robots and information and communication technology (ICT) on regional employment in EU countries. The empirical analysis relies on a harmonised comprehensive regional dataset, which combines business statistics and national and regional accounts data. This rich dataset enables us to provide detailed insights into the employment effects of automation and computerisation in EU regions for the period 2001-2016. The results suggest relatively weak effects on regional total employment dynamics. However, employment effects differ between manufacturing and non-manufacturing industries. Industrial robots show negative employment effects in local manufacturing industries, but positive employment effects in local non-manufacturing industries. While the negative effect is concentrated in particular local manufacturing industries, the positive effect operates in local service industries. IT investments show positive employment effects only in local manufacturing industries, while CT investments are shown to be irrelevant for employment dynamics. In contrast, software and database investments have had a predominantly negative impact on local employment in both local manufacturing and non-manufacturing industries.
Topic:
Labor Issues, European Union, Employment, Industry, Robotics, and Labor Market
Political Geography:
Europe

283. Does my Computer Protect me from Burnout? Cross-country Evidence on the Impact of ICT use within the Job Demands-Resources Model

Author:
Sandra Leitner and Roman Stöllinger
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper uses a large sample of employees from 35 European countries to study the direct and indirect effects of ICT use on burnout and work engagement as two opposite poles of employee psychological health, where the former comprises the three dimensions of exhaustion, cynicism and professional efficacy. It applies the Job Demands-Resources (JD-R) model and analyses the mediating role of three job demands (work extensity, work intensity, social demands) and four job resources (social support from management or colleagues, job control, rewards) on workers’ psychological health. It accounts for the importance of the place of work for the effect of ICT use on workers’ psychological health by differentiating between four types of workers: home-based workers, highly mobile workers, occasionally mobile workers, and workers who always work at the employer’s premises. The results show that ICT use is associated with lower levels of exhaustion but is unrelated to work engagement. Furthermore, work intensity, work extensity, social demands and rewards mediate the effect of ICT use on exhaustion, while job control and rewards mediate the effect of ICT use on work engagement. Our multi-group analysis attributes the negative effect of ICT use on exhaustion mainly to occasionally mobile workers and to workers who always work at the employer’s premises and highlights that the factors that mediate the effect of ICT use on workers’ psychological health differ across the four types of workers. Home-based workers stand out in two important respects: first, ICT use per se is unrelated to burnout; second, only one factor – work intensity – mediates the effect of ICT use on burnout, but its effect is especially strong.
Topic:
Labor Issues, Work Culture, Engagement, Computers, and Burnout
Political Geography:
Europe

284. Comparative Advantages in the Digital Era – A Heckscher-Ohlin-Vanek Approach

Author:
Dario Guarascio and Roman Stöllinger
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper revisits the Heckscher-Ohlin-Vanek (HOV) theorem and investigates its fit for digital tasks and ICT capital, which both represent endowment factors that are expected to shape the digital transformation. We use a theory-consistent methodology for calculating the measured net factor content of trade (Trefler and Zhu, 2010) and apply it to a unique dataset on digital and non-digital tasks performed in detailed occupations, as well as recent data on ICT capital stocks. Equipped with these data we provide new evidence on the factor-based trade patterns for 25 EU countries and use it to test the HOV theorem. Overall, the performance of the sign test and the rank test is good if not impressive. In 83% of the cases countries are net exporters of those factors with which they are abundantly endowed, with a higher score achieved for digital tasks than for ICT capital. We conclude that the fit of the HOV theorem for highly relevant endowments of the digital era is as good as that of traditional endowment factors.
Topic:
European Union, Business, Trade, and Digital Transition
Political Geography:
Europe

285. The Impact of ICT and Intangible Capital Accumulation on Labour Demand Growth and Functional Income Shares

Author:
Robert Stehrer
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper investigates whether the diffusion of tangible IT and CT capital and intangible capital asset types has an impact on labour demand growth and the share of labour income in total income at the industry and country level. The econometric analysis is derived from a Cobb-Douglas production function taking empirical stylized facts into account. The effects of technical progress embodied in the various forms of capital impact along inter-industry and intercountry production linkages, which are considered by using global value chain indicators. The analysis is broken down to examine the influence on different types of labour, including the dimensions of gender, age, and educational attainment. Accumulation of ICT assets have generally insignificant and in some cases small positive effects on labour demand and income shares, though patterns differ across types of labour. Intangible assets show a positive relation with respect to labour demand growth.
Topic:
Labor Issues, European Union, Capital, Income, and Capital Accumulation
Political Geography:
Europe

286. Salmonella Program in the European Union and the Trade Dispute with Brazil at the World Trade Organisation: A Partial Equilibrium Framework

Author:
Mahdi Ghodsi
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This contribution provides a cost-benefit analysis in a partial equilibrium framework to investigate the welfare consequences of a prohibitive regulatory non-tariff measure (NTM) in the form of a sanitary and phytosanitary (SPS) measure aimed at a foreign product with perceived negative characteristics. Two groups of consumers are distinguished: one that is indifferent to the foreign product’s negative attributes, and another that is concerned about them. Different scenarios concerning the welfare gains from the introduction of an NTM are explored. The results depend on consumer awareness and information policies pursued by the government of the importing country or group of countries. The theoretical model is illustrated with data on the production and importation of prepared poultry in the EU. This paper focusses on the recent Dispute Settlement (DS) case 607 at the World Trade Organization (WTO) that was initiated by Brazil in November 2021 to consult with the EU on restrictive measures imposed on the importation of prepared and preserved poultry. These restrictions are in line with the comprehensive and restrictive programme legislated by the EU to combat salmonella spp. The findings suggest that the consumer surplus may be reduced after the imposition of prohibitive SPS measures because the market structure changes from a duopoly to a monopoly. However, when the perceived harm of the bad product increases and the portion of the concerned population in society regarding the bad product increases, the change in the consumer surplus also increases.
Topic:
World Trade Organization, European Union, Welfare, Trade Policy, and Disputes
Political Geography:
Europe, Brazil, and South America

287. The Cyclical Behaviour of Fiscal Policy During the Covid-19 Crisis

Author:
Philipp Heimberger
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper analyses the cyclicality of fiscal policy (discretionary versus automatic) for 28 advanced economies over 1995-2021 by paying special attention to the Covid-19 crisis. We find evidence that discretionary fiscal policy during the Covid-19 crisis (2020-2021) was significantly more countercyclical than before – in particular in the Eurozone. We do not find comparable evidence for more counter-cyclicality during the financial crisis or Euro crisis, which lends support to the argument that discretionary fiscal policy responded especially forceful to stabilise the economy during the Covid-19 crisis. Furthermore, automatic fiscal stabilisers contributed significantly to counter-cyclical stabilisation, although their performance over 2020-2021 was more in line with the past than for discretionary fiscal policy. Overall, fiscal policy in non-Eurozone advanced countries is more countercyclical than in the Eurozone. However, the cyclicality varies markedly across countries. Our findings shed light on how the cyclical behaviour of fiscal policy varies across countries and time.
Topic:
Financial Crisis, European Union, Fiscal Policy, and COVID-19
Political Geography:
Europe

288. German Economy Summer 2022: Slowly progressing recovery

Author:
Jens Boysen-Hogrefe, Nils Jannsen, Saskia Meuchelbock, Dominik Groll, Stefan Kooths, and Nils Sonnenberg
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
The German economy navigates troubled waters. The catch-up process in the contact-intensive service industries is continuing at a fast pace and companies in the manufacturing sector are sitting on well-filled order books. However, high inflation is reducing the purchasing power of disposable incomes and thus dampening the recovery in consumption. In addition, supply bottlenecks have recently worsened again due to the war in Ukraine. As a result, the recovery will regain strength only in the second half of the year, when prices will no longer rise as rapidly and supply bottlenecks will begin to ease. Overall, we expect GDP to increase by 2.1 percent this year, as in our spring forecast. In 2023, GDP will grow by 3.3 percent (spring forecast: 3.5 percent). At 7.4 percent, inflation in the current year will be higher than ever before in reunified Germany. Next year, inflation will probably remain high with 4.2 percent. The recovery in employment continues. Effective earnings will rise strongly, also because labor shortages have reached an all-time high. In the current year, however, the increase of about 5 percent will lag behind the rate of inflation. Public budget deficits will decline as revenues increase strongly and pandemic-related expenditures are reduced. In 2023, public debt in relation to GDP is expected to be slightly above 60 percent.
Topic:
Economics, GDP, Inflation, and Russia-Ukraine War
Political Geography:
Europe and Germany

289. German Economy Spring 2022: Recovery at risk – Soaring Inflation

Author:
Jens Boysen-Hogrefe, Nils Jannsen, Saskia Meuchelbock, Jan Reents, Dominik Groll, Stefan Kooths, Martin Ademmer, and Nils Sonnenberg
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
The German economy is once again facing strong headwinds. The war in Ukraine is leading to rising commodity prices, new supply bottlenecks and dwindling sales opportunities. These factors will affect the German economy in different ways. Higher commodity prices reduce the purchasing power of disposable incomes and thus dampen private consumption. Moreover, new supply bottlenecks will dampen industrial production in the coming months. Finally, sales opportunities will deteriorate at least temporarily due to the sanctions and the increased uncertainty caused by the war. All this is hitting the economy in a phase in which the dampening effects of the pandemic are fading out and a strong recovery has begun to emerge. The dampening factors are cushioned because private households have accumulated large amounts of extra savings since the beginning of the pandemic, so that high inflation does not fully impact private consumption. In addition, industrial firms have an unusually high stock of orders, which will cushion the temporarily lower sales opportunities. As a result, the recovery is likely to continue this year, albeit at a noticeably slower pace than expected in winter. Overall, we now expect GDP to rise by 2.1 percent in this year (winter forecast: 4 percent) and by 3.5 percent in 2023 (winter forecast: 3.3 percent). With 5.8 percent inflation is likely to be higher this year than ever before in reunified Germany. Even if commodity prices stop rising and supply bottlenecks gradually ease, inflation is still likely to be unusually high at 3.4 percent next year, also because recent producer price increases are only gradually being passed through to consumers. The labor market is expected to remain robust. Public spending will rise in response to the war and its economic consequences, so that budget deficits will remain at elevated levels for a longer period.
Topic:
Economics, GDP, Inflation, and Purchasing Power
Political Geography:
Europe and Germany

290. Russia-Ukraine: Dangerous Stalemate

Author:
European Institute of Peace
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
European Institute of Peace (EIP)
Abstract:
Seven years have passed this month since the Package of Measures for implementation of the Minsk agreements called for an “immediate and comprehensive ceasefire in certain areas of the Donetsk and Luhansk regions of Ukraine and its strict implementation…”. Despite endorsement by the UN Security Council Resolution 2202 (February 2015), little or no progress was made in implementing the Minsk agreements, with continued conflict and violations of the ceasefire reported by the OSCE Special Monitoring Mission to Ukraine (SMM) on an almost daily basis. Almost 14.000 Ukrainians lost their lives, thousands more were injured, and millions displaced. With no effective ceasefire in place, this is not a “frozen conflict,” and violent escalation may happen by intent, misunderstanding or miscalculation. Today an even more dangerous stalemate has emerged. Deep international concerns have been raised about the reported Russian military build-up along the country’s borders with Ukraine. Further raising the stakes, broader security issues have re-surfaced with Moscow demanding inter alia guarantees from the US and NATO to refrain from any further enlargement of the alliance, including the accession of Ukraine and other states. Despite intensive and on-going international consultations at all levels, there are no signs yet of de-escalation of the crisis. This report has been prepared in consultation with a group of Ukrainian and Russian experts who have been conducting quiet discussions during the past two years on the Minsk peace process and, more broadly, relations between the Russian Federation and Ukraine. These talks are held under the auspices of the European Institute of Peace.[1] Out of deep concern with present developments, it was decided to share more widely the broad consensus among the participants about the urgent need for a sustainable and durable ceasefire as a prerequisite for implementing the Minsk agreements. In a recent encouraging development, the advisers to the Normandy Four (N4) heads of state and government have supported in a joint statement after their meeting in Paris “unconditional observance of the ceasefire of 22 July 2020 regardless of differences on other issues of the implementation of the Minsk agreements.”[2] Reportedly, a follow-up meeting in Berlin on 10 February 2022 yielded no tangible results yet. Even if the Minsk peace process has come to a ground halt at present, it should be realized that the same political and security issues will have to be addressed in any renewed peace efforts in whatever format to restore peace in east Ukraine. This report highlights that any attempt to overcome the current political stalemate needs to be supported by concrete steps to establish a sustainable ceasefire at the ground-level of the conflict. The report analyses the major reasons for why a sustainable ceasefire was not implemented thus far, and offers a ceasefire management tool referred to as a “Coordination and Verification Mechanism” (CVM).
Topic:
Military Strategy, Violence, Peace, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

291. Cutting through the Value Chain: The Long-Run Effects of Decoupling the East from the West

Author:
Gabriel Felbermayr, Alexander Sandkamp, and Hendrik Mahlkow
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
With ever-increasing political tensions between China and Russia on one side and the EU and the US on the other, it only seems a matter of time until protectionist policies cause a decoupling of global value chains. This paper uses a computable general equilibrium trade model calibrated with the latest version of the GTAP database to simulate the effect of doubling non-tariff barriers - both unilateral and reciprocal - between the two blocks on trade and welfare. Imposing trade barriers almost completely eliminates bilateral imports. In addition, changes in price levels lead to higher imports and lower exports of the imposing country group from and to the rest of the world. The targeted country group increases exports to the rest of the world and reduces imports. Welfare falls in all countries involved, suggesting that governments should strive to cooperate rather than turning away from each other. By imposing a trade war on Russia, the political West could inflict severe damage on the Russian economy because of the latter’s smaller relative size.
Topic:
International Cooperation, International Trade and Finance, European Union, Conflict, Trade Wars, Protectionism, and Rivalry
Political Geography:
Russia, China, Europe, Asia, North America, and United States of America

292. Exchanging Money for Love? A Regional Analysis of EU Cohesion Policy on Euroscepticism

Author:
Michael Bayerlein and Matthias Diermeier
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
In the past, the European Union seems to have been able to tame Euroscepticism through regional 'convergence' funding. After the Eastern enlargement of the Union, however, this relationship needs to be put to the test. Not only have the new member states become the main recipients of EU funding, Eastern Europe has also changed from once being the most integration-friendly region to displaying the most integration-hostile attitudes in the EU. Motivated by this empirical puzzle, we revisit the relationship between structural 'convergence' funding and Euroscepticism and ask where - if at all - is the EU's convergence spending still able to tame Euroscepticism. Most surprisingly, correlation analyses reveal that between 2006 and 2018 larger regional subsidies go along with increasing opposition to EU integration. We can rebut this counterintuitive finding by a Diff-in-Diff approach that reveals an increasing Euroscepticism in Eastern European regions between 2006 and 2014. Nevertheless, also these more advanced models fail to establish a positive relationship between regional funding eligibility and pro-integrationist attitudes. Finally, fuzzy RDD models exploit the funding assignment rule and corroborate that the EU is no longer able to pacify integration-critical regions by their simply increasing 'convergence' funding. Nevertheless, the EU has won support in Eastern Europe where EU investments are perceived (positively). In designing a strategy to win back support for EU integration, Brussels does not need more fiscal capacity but rather has to design 'convergence' funding that is visible as well as clearly attributable to its donor.
Topic:
Economics, Regional Cooperation, Foreign Aid, European Union, and Eurocentrism
Political Geography:
Europe

293. A Primer on the 2022 National Security Strategy

Author:
Peter Juul and Heba Malik
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Center for American Progress - CAP
Abstract:
The 2022 National Security Strategy introduces new ideas on navigating strategic competition with China and Russia, investing at home, and a renewed focus on the fight against climate change.
Topic:
Security, Climate Change, National Security, Rivalry, and Strategic Interests
Political Geography:
Russia, China, Europe, Asia, North America, and United States of America

294. Will Viktor Orbán Bring His Racist Rhetoric to the United States this Week?

Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Center for American Progress - CAP
Abstract:
Hungarian Prime Minister Viktor Orbán's embrace of far-right racism should prompt American conservatives to cut ties with the autocratic Hungarian leader.
Topic:
Foreign Policy, Leadership, Discrimination, and Far Right
Political Geography:
Europe, Hungary, North America, and United States of America

295. Turkey's ‘Precious Loneliness’ vs. Greece's Multilateralism

Author:
Hay Eytan Cohen Yanaraocak
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Moshe Dayan Center for Middle Eastern and African Studies
Abstract:
In our latest issue of Turkeyscope, Dr. Hay Eytan Cohen Yanarocak discusses the latest tension in the Eastern Mediterranean between Turkey and Greece. By analyzing the foreign policy strategies of both countries the essay reveals Turkey's shrinking leverage on the West and its ramifications for the Turkish national security.
Topic:
Foreign Policy, National Security, Bilateral Relations, and Multilateralism
Political Geography:
Europe, Turkey, Middle East, and Greece

296. Eighth sanctions package: Which side will be the economic loser?

Author:
Nigar Islamli
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Center for Economic and Social Development (CESD)
Abstract:
Since February 24, 2022, Russia's invasion policy towards Ukraine has been tried to be prevented by several series of sanctions by the European Union. These sanctions include trade, travel, asset freezes, oil, transport, and SWIFT bans. Since the start of the war, 7 sanctions packages have been presented and many of them are being implemented. In response to Russia's invasion policy against Ukraine, the European Commission presented the eighth package of sanctions covering visa issues and asset freezes.
Topic:
Economics, Sanctions, European Union, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

297. Potential Expansion of the Southern Gas Corridor (SGC): New Realities and Opportunities

Author:
Nigar Islamli
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Center for Economic and Social Development (CESD)
Abstract:
The article clarifies the directions in which the Southern Gas Corridor (SGC) can be expanded and gas can be transported to how many countries. For the expansion of the SGC, countries such as Bulgaria, Poland, Hungary, the Czech Republic, and Romania are studied in this paper. The issue of reducing Europe's 40% dependence on Russian gas and Europe's search for alternative energy sources and the expansion of the Southern Gas Corridor, one of the largest gas export projects to Europe, are on the agenda. In addition, the threat of several European countries - Poland, Bulgaria, Finland, the Netherlands, and Denmark - refused to pay for Russian gas in rubles, and as a result, the supply of gas is cut off.
Topic:
Gas, Exports, and Energy Dependence
Political Geography:
Russia, Europe, Poland, Bulgaria, Romania, Hungary, and Czech Republic

298. The Implications of the Third Trilateral Meeting in Brussels

Author:
Emin Mammadov
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Center for Economic and Social Development (CESD)
Abstract:
In a way towards a productive peace-building process, discussing the situation in South Caucasus and deepening economic cooperation between the EU and both countries, on May 23 President of the European Council Charles Michel hosted the President of Azerbaijan: Ilham Aliyev and Prime Minister of Armenia: Nikol Pashinyan. Following the 6 April meeting, which is called by the President Ilham Aliyev as a starting point in the normalization of relations between Armenia and Azerbaijan, the content of the recent meeting is once more characterized by its promising and necessary provisions that will serve the interests of Azerbaijan and development of the region more broadly.
Topic:
International Relations, Diplomacy, and European Union
Political Geography:
Europe, Caucasus, Armenia, Azerbaijan, and Brussels

299. Azerbaijani Gas Export to Europe: What Advantages Are There?

Author:
CESD Research Team
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Center for Economic and Social Development (CESD)
Abstract:
Following Russia's decision to restrict natural gas exports to Poland and Bulgaria, energy security has become a priority in the European Union. Although the ancient continent is trying to increase gas imports from alternative sources, Gazprom is still trying to maintain its dominance in Europe for some time. Meanwhile, Azerbaijan continues to increase natural gas production. In the first quarter of this year, Azerbaijan produced 11.8 billion cubic meters of natural gas. 3.5 billion cubic meters of gas were produced from ACG, 6.4 billion cubic meters from Shah Deniz, and 1.9 billion cubic meters from SOCAR. During that period, gas exports amounted to 5.9 billion cubic meters. 2.2 billion cubic meters of gas were exported to Turkey, 2.6 billion cubic meters to Europe, and 1.1 billion cubic meters to Georgia. More than 4 billion cubic meters of gas were transported to Turkey via TANAP during this period.
Topic:
European Union, Gas, Exports, Russia-Ukraine War, and Energy Sector
Political Geography:
Russia, Europe, Poland, Azerbaijan, and Bulgaria

300. How Will Coal Sanctions Impact on Russian Economy?

Author:
CESD Research Team
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Center for Economic and Social Development (CESD)
Abstract:
The Western Alliance has approved a new package of sanctions against Russia. The most notable of the sanctions is the suspension of coal exports from Russia. What does this mean for Russia, and how can the European Union compensate for this ban? Yesterday, the European Commission posted a decision on sanctions on its website, which means that the ban will come into force. This means that from today, European companies will not be able to conclude contracts to buy coal from Russia. The contracts signed in the previous period must be completed by August.
Topic:
Sanctions, European Union, Economy, Exports, Coal, and Russia-Ukraine War
Political Geography:
Russia and Europe