Political Geography: Europe / Publication Year: within 10 Years / Topic: Economics

51. EU carbon border adjustment mechanism faces many challenges

Author:: Gary Clyde Hufbauer, Jeffrey J. Schott, Megan Hogan, and Jisun Kim
Publication Date:: 10-2022
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: This Policy Brief assesses the evolving EU Emissions Trading System and EU carbon border adjustment mechanism (CBAM) and explains objections within Europe and from major trading countries likely to be affected by the proposed CBAM import levies. While EU officials have sought to ensure that the CBAM is consistent with obligations under the World Trade Organization (WTO), key aspects of the CBAM could violate WTO rules and are likely to be contested, taking years to play out. Meanwhile, several other countries will adopt new carbon-inspired border restrictions, adding to global trade frictions. Major carbon-emitting countries, therefore, need to act cooperatively instead of unilaterally to both advance the fight against climate change and update the rules-based global trading system. Two-thirds of greenhouse gas emissions result from nontraded activities, such as road transport, electricity generation, and home and office heating. Countries can curb emissions in these activities, while developing guidelines for carbon abatement in traded sectors.
Topic:: Climate Change, Economics, International Trade and Finance, World Trade Organization, European Union, and Carbon Emissions
Political Geography:: Europe

52. Is South Korea vulnerable to EU and US carbon border restrictions?

Author:: Jeffrey J. Schott and Megan Hogan
Publication Date:: 07-2022
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: South Korean exports, especially carbon-intensive products like steel, are increasingly vulnerable to both the European Union’s proposed carbon border adjustment mechanism (CBAM)—set to begin on January 1, 2023—and the proposed Clean Competition Act (CCA) before the US Congress. Schott and Hogan caution that Korean exporters should not count on Korea’s decade-old EU and US free trade agreements (FTAs), nor on the multilateral trading rules of the World Trade Organization (WTO), to protect them from new carbon-based import barriers in key foreign markets. The WTO and the FTAs have broad and loosely defined exemptions for environmental protection. Nor is Korea likely to be shielded by its own cap-and-trade emissions trading system (the K-ETS), because of extensive use of free allowances and large differences between EU and Korean carbon prices. While the threat the EU CBAM poses to Korean exports is imminent, passage of the CCA faces major legislative obstacles. But US imports of Korean steel and other carbon-intensive goods are still subject to climate-related duties at the US border under US unfair trade statutes. The US Department of Commerce has ruled that free allowances issued under the K-ETS (and EU ETS) are implicit subsidies that can be offset by countervailing duties. These charges are in addition to the harsh tariff-rate quotas on imported Korean steel applied under the “national security” authority of Section 232 of US trade law, which are more restrictive than measures imposed against European and other steel exporters. The authors suggest relaxing these US barriers, as they have been for shipments from Europe, in return for Korean participation in the nascent US-EU talks to establish a “Global Arrangement on Sustainable Steel and Aluminum.”
Topic:: Economics, International Trade and Finance, European Union, Exports, and Carbon Emissions
Political Geography:: Europe, Asia, South Korea, and United States of America

53. Will economic statecraft threaten western currency dominance? Sanctions, geopolitics, and the global monetary order

Author:: Carla Norrlof
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: Atlantic Council
Abstract:: The return of great power rivalry is stoking renewed fears of weakening Western currency dominance. Financial sanctions are becoming the preferred economic tool for accomplishing geopolitical goals. These instruments are especially popular with the United States and Europe. In response, rival great powers, notably China and Russia, are diversifying away from Western currencies and developing counterstrategies to maintain economic and foreign policy autonomy. As other countries are hit by increasingly punishing Western sanctions, the incentive to join Russia and China’s alternative international monetary order increases. New analysis, published in this report, shows early signs that some countries may be trying to diversify away from the dollar. A growing circle of countries attempting to evade the Western-centric financial and currency order may over time erode the dollar and the euro’s sizeable lead, though will likely fall well short of ending their global dominance. This report analyzes these trends and quantifies the extent of reserve diversification following Russia’s 2022 war on Ukraine. It also assesses the polarity of the international currency order since the onset of the euro in 2002. Reserve diversification out of the dollar, and into the euro, has been modest, though Chinese renminbi reserves grew after Russia’s February offensive in Ukraine. Dollar unipolarity declined acutely in 2017 as the number of countries sanctioned by the United States increased and the US President Donald J. Trump threatened to revoke alliance commitments. Using economic statecraft while retaining global economic influence will require the United States to keep its economic house in order and allies close, if the current unipolar currency order is to survive.
Topic:: Economics, Monetary Policy, Sanctions, and Geopolitics
Political Geography:: China, Europe, and Asia

54. The Business Case for the Sustainable Development Goals: An Empirical Analysis of 21 Danish Companies' Engagement with the SDGs

Author:: Michael W. Hansen, Henrik Gundelach, and Erik Johnson
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:: This paper explores why business engage with the SDG agenda, with a view to understanding the business case for the SDGs. Building on and extending the responsibility literature’s discussion of the business case for responsibility, the paper develops a conceptual framework for analyzing why business engage with the SDGs. This framework is employed to analyze why a sample of 21 Danish companies decided to engage with the SDG agenda. The analysis finds that most companies view the SDGs as a platform for achieving rather conventional business goals such as mitigating risk, saving costs, and differentiating products and services. However, in a few cases, companies use the SDGs as a lever for carving out uncontested positions in future markets. The paper concludes that companies overwhelmingly view the SDGs as a business opportunity rather than as a business responsibility, something that fundamentally may distinguish the SDG agenda from previous responsibility agendas. The paper fills a gap in the extant literature on business responsibility by developing and validating a classification of the business case for the SDGs based on economic value drivers, and by deepening the empirical understanding of, what precisely this business case may be.
Topic:: Development, Economics, Sustainable Development Goals, Business, and Social Responsibility
Political Geography:: Europe and Denmark

55. ‘Impactful projection’: long-range strike options for Australia

Author:: Marcus Hellyer and Andrew Nicholls
Publication Date:: 12-2022
Content Type:: Special Report
Institution:: Australian Strategic Policy Institute (ASPI)
Abstract:: The Australian Government has stated that the ADF requires greater long-range strike capability. This was first stated by the previous government in its 2020 Defence Strategic Update (DSU), which emphasised the need for ‘self-reliant deterrent effects’. The present government has endorsed that assessment: Deputy Prime Minister and Defence Minister Richard Marles has stated that ‘the ADF must augment its self-reliance to deploy and deliver combat power through impactful materiel and enhanced strike capability—including over longer distances.’ He’s coined the term ‘impactful projection’ to describe the intended effect of this capability, which is to place ‘a very large question mark in the adversary’s mind.’ The term may be new, but the concept is not. To us, it’s a restating of the concept of deterrence by denial; that is, having sufficiently robust capabilities to convince an adversary that the cost of acting militarily against us isn’t worth any gains that might be made. But the need for the ADF to have those kinds of capabilities has become much more urgent. As the 2020 DSU noted, we no longer have 10 years of warning time of conventional conflict involving Australia. Moreover, this is not just the prospect of conflict far from Australia’s shores. People’s Liberation Army (PLA) force-projection capabilities have grown dramatically in the past two decades and include long-range conventional ballistic missiles, bombers and advanced surface combatants that have already transited through Australian waters.
Topic:: Defense Policy, NATO, and Economics
Political Geography:: Russia, China, Europe, Australia, and Australia/Pacific

56. The Price Cap on Russian Oil Exports, Explained

Author:: Catherine Wolfram, Simon Johnson, and Łukasz Rachel
Publication Date:: 12-2022
Content Type:: Policy Brief
Institution:: Belfer Center for Science and International Affairs, Harvard University
Abstract:: If you’ve taken an introductory economics class, you were probably left with the strong impression that price caps are bad – they distort demand and discourage producers from supplying the market. So, why has Treasury Secretary Janet Yellen, the consummate economist, advocated so strongly for a price cap on Russian oil? The answer is that this price cap is different from the standard cap discussed in introductory economics classes. A standard price cap applies to all goods traded in a market. For example, in some countries there are price caps on bread for everyone or diesel for farmers or rent controls on housing. Such caps lead to excess demand for the good and insufficient supply, leading to shortages at the capped price. If prices are constrained, other non-price mechanisms, like first-come-first-served, are required to allocate the good. All too frequently, the result is empty bakery shelves or fuel shortages or difficulties finding housing. To understand why the cap on Russian oil is different, we first need to provide background on Russian oil trade and the proposed price cap.
Topic:: Economics, Markets, Oil, Exports, and Russia-Ukraine War
Political Geography:: Russia and Europe

57. Enclosing the English Commons: Property, Productivity and the Making of Modern Capitalism

Author:: Charlie Harris
Publication Date:: 11-2022
Content Type:: Case Study
Institution:: Oxford Centre for Global History
Abstract:: Legend has it that Alfred the Great awarded Oxford’s Port Meadow to the freemen of the city as a token of thanks for participating in the defence against Danish invaders. Historians dispute the account – but regardless, the Domesday Book indicates that the Oxford freemen have managed the meadow and used it as free pasture since the Saxon era. It still bears the evidence of thousands of years of community use, from Bronze Age burial mounds right up to regular horse racing in the 17th and 18th centuries. Port Meadow is one of Oxford’s few remaining “commons” – a parcel of land upon which local inhabitants retain their ancient common land rights. These include drawing water and fuel, rights of passage, fishing the River Thames and grazing animals. To this day, mingling amongst students and ramblers, horses and cattle roam freely. For millennia, most of England’s arable land fell under the category of “commons”; it was only a gradual process that created our modern arrangement of exclusive, unitary land ownership. This process was called enclosure. In a nutshell, enclosure was the legal mechanism which expropriated the commons (also known as common lands or waste lands) from England’s commoners, aggregated them and put them to new use. It revolutionised private property as a concept, largely introduced the concept of land as a commodity, and came to define the economic priorities of the last five hundred years. It catalysed the Industrial Revolution and English urbanisation. In terms of economic development, it was somewhat akin to the invention of the wheel, if rather more contentious.
Topic:: Economics, Capitalism, Enclosure, and Commons
Political Geography:: Europe and England

58. Germany’s Economic Security and Technology: Optimizing Export Control, Investment Screening and Market Access Instruments

Author:: Tyson Barker and David Hagebölling
Publication Date:: 11-2022
Content Type:: Special Report
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: Technological development and increasingly fraught US-China competition have geopolitical consequences for technology access. The erosion of post-Cold War multilateral dual-use technology export control regimes, such as the Wassenaar Arrangement, and investment and other control frameworks have led to na-tional, EU, and ad hoc measures, such as the restrictions on Russian semiconductor access following the invasion of Ukraine. The German government must integrate technology access and control instruments – export controls, FDI screening, critical infrastructure access, research protection, and outbound investment– in its Digital Strategy and National Security Strategy. The former currently neglects critical technology access and control; the latter must address it comprehensively. German – and EU – dual-use export and FDI screening reforms have been updated and are now in place. Capacity building and alignment with EU and NATO partners now deserves greater attention. Measures could include more robust, institutionalized information-sharing and consultations on dual-use technology export, import, investment, and research controls in a Multilateral Technology Control Committee born out of the G7 or TTC. The commit-tee should also establish the capacity to deny end-user access to German technology through its own Foreign-Direct Product Rules and Entity List.
Topic:: Security, Economics, Science and Technology, Investment, and Exports
Political Geography:: China, Europe, Asia, North America, and United States of America

59. A German Digital Grand Strategy: Integrating Digital Technology, Economic Competitiveness, and National Security in Times of Geopolitical Change

Author:: Tyson Barker and David Hagebölling
Publication Date:: 11-2022
Content Type:: Special Report
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: This report systematically outlines the state of play in digital policy and Berlin’s current policy approach. It provides 48 recommendations for strengthening Germany’s efforts to build a confident, high-performing European digital economy embedded in an open, democratic, and rules-based digital order.
Topic:: Economics, National Security, Science and Technology, Geopolitics, Grand Strategy, and Digital Policy
Political Geography:: Europe

60. Don’t Get Caught in the Middle: A Geo-Economic Strategy for Germany to Survive US-Chinese Rivalry

Author:: Markus Jaeger
Publication Date:: 12-2022
Content Type:: Policy Brief
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: The economic fallout from the war in Ukraine has been very significant. The consequences of a war in East Asia involving the United States and China would be much worse. And even if a Sino-US military confrontation can be avoided, geo-economic conflict between the two powers is going to intensify. Washington will put increasing pressure on Germany and Europe to align their policies with Washington’s geo-economic strategy.
Topic:: Economics, Strategic Competition, Rivalry, and Geoeconomics
Political Geography:: China, Europe, Asia, Germany, North America, and United States of America

61. Different Choices, Divergent Paths: Poland and Ukraine

Author:: Thorvaldur Gylfason, Eduard Hochreiter, and Tadeusz Kowalski
Publication Date:: 12-2022
Content Type:: Special Report
Institution:: The Vienna Institute for International Economic Studies (WIIW)
Abstract:: We compare the economic growth trajectories of Poland and Ukraine since 1990 to try to understand the extent to which the observed growth differentials can be traced to increased efficiency in the use of capital and other factors (intensive growth), rather than to simple accumulation of capital (extensive growth). We stress the role of qualitative factors such as education, governance and institutions. We ask whether the EU perspective and NATO membership played a role. We discuss the closely related histories of the two countries and note the stark differences between them, including their different approaches to the EU vs Russia, full vs incomplete transition to a market economy, and democracy vs anocracy, as well as different initial conditions. We compare key determinants of growth and growth trajectories, using economic as well as social indicators, and trying to disentangle efficiency and accumulation and combine path dependence and the role and scope of creative destruction. While Poland had the shortest and mildest transformation recession among CEE countries, Ukraine has been stagnant, or in decline, since 1990. The statistics we report and the stories we tell suggest that both countries have a complex relationship with democracy and that the nearly threefold difference in per capita GDP at PPP in 2021 in Poland’s favour, with the ratio of investment to GDP similar in both countries, can most plausibly be traced to: (a) Poland’s more extensive and diversified exports, and fewer restrictions on trade, in addition to more comprehensive and quicker restructuring of the national economy inspired by the EU perspective; (b) Poland’s more extensive and better-quality education; (c) Poland’s greater democracy and longer experience of democracy, lower levels of corruption, better governance, and freer press; (d) Poland’s smaller agricultural sector and greater emphasis on manufacturing; and (e) Poland’s lower inflation and higher level of financial development. Furthermore, Poland built market-friendly institutions to EU specifications and joined NATO. Against all this, Ukraine had more economic equality and lower unemployment as well as, from the early 1990s, a lower initial level of income per person, but was hampered by political divisions, path-dependent corruption and poor governance. During the global Covid-19 pandemic, Ukraine apparently suffered fewer deaths than Poland, despite fewer vaccinations.
Topic:: Economics, Education, Governance, Reform, European Union, Economic Growth, Inflation, Exports, Transition, and Labor Market
Political Geography:: Europe, Ukraine, and Poland

62. EU-Azerbaijan Economic Relations: New Perspectives and Targets

Author:: CESD Research Team
Publication Date:: 12-2022
Content Type:: Working Paper
Institution:: Center for Economic and Social Development (CESD)
Abstract:: The study is an example of the series on issues analyzing the EU-Azerbaijan economic relations which can be considered a step forward to empower economic approach in the policy-making process aiming to provide an alternative view in addressing current challenges and developments in Azerbaijan. The European Union’s relations with Azerbaijan have been formulated based on the EU-Azerbaijan Partnership and Cooperation Agreement which entered into force since 1999. In February 2017, the EU and Azerbaijan began negotiations on a new framework agreement designed to enhance the political dialogue, trade and mutually beneficial cooperation covering a wide range of economic aspects. One of the most important strategies of EU in the energy policy is to ensure energy security through diversification of energy routes. Azerbaijan is a strategically important energy partner for the EU and plays a significant role in bringing Caspian energy resources to the EU market. In 2018, the EU and Azerbaijan endorsed joint Partnership Priorities, along the four Eastern Partnership priorities that accompany the political dialogue and economic cooperation….
Topic:: International Relations, Economics, European Union, and Partnerships
Political Geography:: Europe, Caucasus, and Azerbaijan

63. German Economy Winter 2022: Inching through the energy crisis

Author:: Jens Boysen-Hogrefe, Dominik Groll, Nils Sonnenberg, Nils Jannsen, Stefan Kooths, Vincent Stamer, and Timo Hoffmann
Publication Date:: 12-2022
Content Type:: Working Paper
Institution:: Kiel Institute for the World Economy (IfW)
Abstract:: Wholesale prices for gas and electricity have fallen significantly in recent months - even though they are still at a high level. In addition, the burdens on private households and companies caused by high energy costs are to be cushioned by so-called price brakes. Overall, inflation in 2023 will be much lower at 5.4 percent than we had expected in our autumn forecast (8.7 percent). Although real disposable income and, as a result, private consumption are likely to decrease next year, the decline will be much smaller than had been expected a few months ago. As a result, we now expect a slight increase in GDP of 0.3 percent for 2023 (autumn: -0.7 percent). In 2024, GDP is expected to grow somewhat more strongly again at 1.3 percent (autumn: 1.7 percent). The labour market is robust despite the economic slowdown, partly because companies are still desperately seeking skilled workers. The public fiscal balance is likely to deteriorate significantly in 2023 due to the aid packages in response to the energy crisis and displays a deficit of around 4 percent relative to GDP. With the expiry of the aid packages, the deficit will decrease again in 2024.
Topic:: Economics, Monetary Policy, Budget, Business, Labor Market, Energy Crisis, Emerging Economies, and Advanced Economies
Political Geography:: Europe and Germany

64. The Automotive Industry: The Achilles’ Heel of German Economy?

Author:: Marie Krpata
Publication Date:: 03-2021
Content Type:: Special Report
Institution:: Institut français des relations internationales (IFRI)
Abstract:: The global car market has been shrinking since 2018. This is a key economic sector for Germany whose producers belong to the Top 15 carmakers worldwide. Yet they are running the risk of being outclassed and eventually replaced, given emerging actors in the USA and China. These new competitors benefit from the growing digitization of the mobility sector, disruptive economic models and the obsolescence of vehicles with an internal combustion engine. This form of propulsion is progressively being replaced by less-polluting alternatives, which are being endorsed by public authorities. The Chinese-American rivalry is also impacting German carmakers, whose strategy greatly relies on the globalization of production chains. This has led to major successes in the past, but the threat of a technological decoupling between the USA and China limits German carmakers’ activities in terms of production and exports. Access to the Chinese market, which accounts for nearly 20% of the global population, is indispensable for the German brands that intend to benefit from China’s catch-up effects. European industrial and political actors plan to invest in promising sectors whilst seeking to respect environmental and social objectives. Also, the European Union (EU), led by a German powerhouse, intends to prevent market distortions such as hurdles to market access, while supporting the emergence of technologies and the compliance with production standards. However, developments in the automotive sector are challenging the EU’s capacity to act in a unified fashion, even if the EU is not seeking to impose its vision on the industry’s private sector, in a top-down manner.
Topic:: Climate Change, Economics, Energy Policy, Industrial Policy, European Union, Social Policy, Mobility, Industrialization, Green Deal, and Automotive Industry
Political Geography:: Europe and Germany

65. Biden and Belarus: A strategy for the new administration

Author:: Anders Åslund, Melinda Haring, John Herbst, and Alexander Vershbow
Publication Date:: 01-2021
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: United States President Joseph R. Biden Jr. has an historic opportunity to bring Europe together and reverse the tide of dictatorship by building an international coalition to support democracy in Belarus. In 2020, Belarusians unexpectedly called Alyaksandr Lukashenka’s legitimacy into question in the country’s August presidential election. Lukashenka brazenly rigged the results, claiming that he took 80 percent of the vote, but neither the United States nor the European Union (EU) recognizes his victory. A months-long protest movement has coalesced that demands new elections under the supervision of the international community. Recent years have seen no better chance for US leadership to facilitate lasting positive change in Europe than the crisis in Belarus. But how to secure democratic change in Belarus is not simple given internal resistance and Moscow’s determination to prevent another “color revolution.” Lukashenka is likely finished, unable to restore any authority or legitimacy. But he is seeking to hang on despite Moscow’s efforts to arrange a pliable replacement who would preserve Minsk’s pro-Russian orientation. Managing Moscow’s efforts to prevent an aroused citizenry from choosing their own leader is no easy task. Russia remains the key geopolitical player in Belarus, often plays the long game, and may be willing to countenance military options that the United States cannot. Perhaps the key fact is that Belarusians have made it amply clear that they want accountable leaders that they can choose and dismiss for themselves. More than thirty thousand peaceful protesters have been detained since August, more than three hundred and fifty police officers have defected, and ordinary Belarusians are no longer afraid to voice their opposition to the regime. Kremlin support for the ongoing repression risks turning the Belarusian people—historically friendly toward Russia—in a pro-European direction. These changes in Belarus are something that Moscow cannot ignore, and the United States and its allies must nourish and strengthen them in consistent ways that avoid and deter a Kremlin overreaction. Biden, with his long experience promoting US values and interests and his determination to strengthen transatlantic relations, is ideally situated to promote clear support for the people of Belarus that does not directly challenge Moscow’s security interests.
Topic:: Economics, Human Rights, Sanctions, and Democracy
Political Geography:: Europe, Belarus, and United States of America

66. Georgia After the Second Karabakh War

Author:: Mamuka Tsereteli
Publication Date:: 08-2021
Content Type:: Journal Article
Journal:: Baku Dialogues
Institution:: ADA University
Abstract:: The outcome of the Second Karabakh War between Azerbaijan and Armenia significantly transformed the geopolitical reality in the South Caucasus, with implications for the wider Black Sea‑Caspian region. The unsettled political geography of the South Caucasus and the ethno‑political separatism fueled by external actors since the early 1990s left bleeding wounds on the bodies of the newly re‑emerged sovereign states of Armenia, Azerbaijan, and Georgia. These conflicts have determined the trajectory of the geopolitical developments of the region for the last 30 years, including on the foreign policy orientations of these new states. The conflicts in the South Caucasus were the primary challenge for transforming the strategic assets of this region into greater political and economic success. Three major conflict areas in the South Caucasus were former autonomous regions, created in the early Soviet period: Nagorno‑Karabakh, Abkhazia, and the Tskhinvali region, what was called South Ossetia. (Briefly: the latter term was introduced by the Soviets in the 1920s as a name for the newly created autonomous area in Georgia, populated by Ossetians alongside ethnic Georgians. The historic homeland of Ossetians is located to the north of the Greater Caucasus mountains. Following the Soviet tradition of planting ethno‑political time bombs, Ossetia proper—located in the Russian Federation—was named North Ossetia, while the Tskhinvali region of Georgia—with the Ossetian population at the time concentrated in the border areas with Russia—was named South Ossetia.) As of today, all three of these areas are self‑proclaimed independent states, are formally ruled by de facto governments, and saw fierce military confrontation in the early 1990s. In 2008, the Tskhinvali region became the battleground between Russian and Georgian forces. In 2020, Azerbaijan regained through a combination of military action and diplomatic brinksmanship all seven regions outside of Nagorno‑ Karabakh that had been occupied by Armenia, as well as one‑third of the former Nagorno‑Karabakh region. In the case of Abkhazia and the Tskhinvali region/South Ossetia, as of mid‑2021, these territories remain, in reality, governed by Russian occupational forces. The Russian military influence was inserted into Karabakh after the war that ended on November 10th, 2020, with Russian peacekeepers playing an increasing role in the governance of the region. In terms of geopolitical orientation, Armenia willingly allowed Russian troops onto its territory, seeing them as a security guarantee and deterrent against Azerbaijan. Georgia aligned itself with the Western powers, determined to join NATO and the EU. The conflicts on Georgian territory are seen as punishment from Russia for Georgia’s pro‑Western focus. As a result, there has been a heavy Russian military presence in the separatist areas of Georgia since the Russian invasion to Georgia in 2008.
Topic:: Security, Economics, Military Strategy, Conflict, and Peace
Political Geography:: Europe, Asia, Armenia, Azerbaijan, and Georgia

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

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

68. Nudging for Recovery: Behavioral Economics and the implementation of the National Recovery and Resilience Plan

Author:: Demosthenes Kollias
Publication Date:: 10-2021
Content Type:: Working Paper
Institution:: Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:: With the National Recovery and Resilience Plan, Greece is presented with yet another opportunity to catch up with global trends. At the same time, behavioral economics are being established worldwide as a valuable asset in the policy maker’s toolkit. The paper -mainly focusing on taxation, labor market policy, and climate change- aims to examine the behavioral conundrum that creates frictions and inefficiency in the domains outlined above and to offer concrete and quantifiable policy proposals, in accordance with the goals of Greece 2.0. Regarding tax evasion, for example, one can estimate at least €1 billion in additional tax revenue if the proposals are implemented.
Topic:: Climate Change, Economics, Tax Systems, Labor Market, and Economic Recovery
Political Geography:: Europe and Greece

69. EU-Turkey Economic Relations and the Customs Union: a rules-based approach

Author:: Dimitris Tsarouhas
Publication Date:: 05-2021
Content Type:: Working Paper
Institution:: Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:: Trade and economic relations remain the cornerstone of EU-Turkey relations. The Customs Union (CU) is the sole institutionalized instrument that remains important for both sides. Launching negotiations on how to update its content offers a set of fresh opportunities for the EU to reintroduce political as well as economic conditionality in its relations with Turkey. A step-by-step approach based on monitoring and benchmarking can enhance EU leverage vis á vis Turkey and allow the EU to escape a cycle of ineffective policy interventions on Turkey’s political trajectory. The CU can also become a vehicle to assist the democratic segments of Turkey’s civil society as well as those EU member states who have found themselves searching for an alternative to Turkey’s failed Europeanization.
Topic:: Foreign Policy, Economics, Migration, and European Union
Political Geography:: Europe and Turkey

70. Snakes, rats and drug addicts used to dwell here – analysis of the narrative utilised to capture the state

Author:: Luka Steric
Publication Date:: 03-2021
Content Type:: Commentary and Analysis
Institution:: Belgrade Centre for Security Policy
Abstract:: Foreign direct investments are the cornerstone of the current government’s economic policy. In their statements, the officials call them drivers of development, saying that they have enabled the revival of the economy and turned Serbia into the “economic tiger of Southeast Europe.”1 The fact that the value of the investments Serbia has managed to attract is greater “than what was achieved by all the countries of the Western Balkans put together” 2 is often mentioned as the key measure of success. However, the story of brilliant success quickly loses its lustre when one considers the long-term effects and all-encompassing consequences of this policy. Due to the way they are contracted and implemented, foreign direct investments represent one of the key mechanisms for capturing the state. Hiding behind the stories of a better future and new jobs, the government is breaking down the system of legal regulations and statutory procedures, promoting private interest to the detriment of the public one, and using foreign investments as propaganda ammunition to legitimise unlimited power. The results of such policy are a number of negative consequences for the state and the citizens, such as the increase of public debt, dramatic violation of workers’ rights and alarming problems with environmental pollution. In order to mask the negative consequences and legitimise the policy of attracting foreign investors based on the above described pattern, a complex narrative has been developed presenting foreign investments as a successful, and the only possible, model for state development. This meta-narrative about progress, which media are building up every day, is based on four basic component narratives: on the economic revival, on the efficiency of personal rule, on transparent contracts and on the opponents of Serbia’s development who ‘unfoundedly’ criticise the government’s economic success. In the analysis of the narrative we will focus on the statements of officials made since 2012, which is when the regime led by the Serbian Progressive Party came to power. Many of the described mechanisms, such as non-transparent, harmful contracts and unjustifiably high subsidies, also existed during the previous government.3 However, the capture of the state, carried out - among other things - with the help of foreign direct investments, has reached completely new dimensions under the current regime, while the narratives that accompany it have been significantly ‘improved’.
Topic:: Development, Economics, Foreign Direct Investment, and Drugs
Political Geography:: Europe and Serbia

71. The EU–China Comprehensive Agreement on Investment: Lessons Learnt for Indonesia

Author:: Yan Lili Ing and Junianto James Losarili
Publication Date:: 08-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: The European Union (EU) and China have recently reached an agreement: the EU–China Comprehensive Agreement on Investment (CAI). As one of the most recent investment agreements concluded by the EU, the paper aims to assess specific concessions made in the agreement, and provides lessons learnt for Indonesia on the ongoing negotiations of the Indonesia–EU free trade agreement, the Comprehensive Economic Partnership Agreement (IEU CEPA). The paper will present an overview of the main areas covered under the CAI, assess the potential impacts of the CAI on EU investment into Indonesia, and set out lessons that can be learnt from the CAI.
Topic:: Economics, International Cooperation, International Trade and Finance, European Union, and Investment
Political Geography:: China, Europe, Indonesia, and Asia

72. UK Economic Diplomacy in the 21st Century: The LSE Economic Diplomacy Commission Final Report

Author:: LSE Economic Diplomacy Commission
Publication Date:: 02-2021
Content Type:: Special Report
Institution:: LSE IDEAS
Abstract:: The LSE Economic Diplomacy Commission was convened in 2019 to establish a strategic direction for a new age of foreign economic policy, to understand the domestic ramifications of changes to the UK’s trade agenda, and to present recommendations that may best advance the UK’s priorities at home and abroad. The aim of the Report is to position the UK optimally in a changed 21st century global economy while maintaining the UK’s support for an open, multilateral trade and rules-based international system. The Report proposes a refined economic diplomacy framework that seeks to balance commercial openness with strategic domestic and foreign policy aims, broadly defined.
Topic:: Foreign Policy, Diplomacy, Economics, and Trade
Political Geography:: United Kingdom and Europe

73. A Generation of Italian Economists

Author:: Enrico Nano, Ugo Panizza, and Martina Viarengo
Publication Date:: 05-2021
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: We examine the role of financial aid in shaping the formation of human capital in economics. Specifically, we study the impact of a large merit-based scholarship for graduate studies in affecting individuals’ occupational choices, career trajectories, and labor market outcomes of a generation of Italian economists with special focus on gender gaps and the role of social mobility. We construct a unique dataset that combines archival sources and includes microdata for the universe of applicants to the scholarship program and follow these individuals over their professional life. Our unique sample that focuses on the high end of the talent and ability distribution also allows us to analyze the characteristics of top graduates, a group which tends to be under-sampled in most surveys. We discuss five main results. First, women are less likely to be shortlisted for a scholarship as they tend to receive lower scores in the most subjective criteria used in the initial screening of candidates. Second, scholarship winners are much more likely to choose a research career and this effect is larger for women. Third, women who work in Italian universities tend to have less citations than men who work in Italy. However, the citation gender gap is smaller for candidates who received a scholarship. Fourth, women take longer to be promoted to the rank of full professor, even after controlling for academic productivity. Fifth, it is easier to become a high achiever for individuals from households with a lower socio-economic status if they reside in high social mobility provinces. However, high-achievers from lower socio-economic status households face an up-hill battle even in high social mobility provinces.
Topic:: Economics, Education, Gender Issues, Human Capital, Career, and Financial Aid
Political Geography:: Europe and Italy

74. The Importance of Financial Education for the Bank CLient's Protection in Kosovo

Author:: Fitim Gashi and Bedri Peci
Publication Date:: 06-2021
Content Type:: Journal Article
Journal:: Journal of Liberty and International Affairs
Institution:: Institute for Research and European Studies (IRES)
Abstract:: Technological developments are not easily understood even by people who have advanced education and this leaves much to be expected for other groups. Financial services and banking products are also ‘complicated’ for professionals, not to mention the ordinary client. As a result of the features of financial products and services, especially banking, information is required as an initial form of knowledge of these services and products, and this information is intensified through a constant process such as education. Hence, this article argues how financial education is performed in Southeast Europe and even in the EU. This article also elaborates on the financial education in Kosovo concerning the protection of banking clients’ rights, taking into account the financial education practices from which the Kosovo system can benefit.
Topic:: Economics, European Union, Finance, and Banking
Political Geography:: Europe and Kosovo

75. Challenges and Difficulties for Micro-Business in Adapting IFRS for SMES Requirements: Kosovo Evidence

Author:: Esat A. Durguti and Ereza A. Arifi
Publication Date:: 09-2021
Content Type:: Journal Article
Journal:: Journal of Liberty and International Affairs
Institution:: Institute for Research and European Studies (IRES)
Abstract:: Small and medium-sized enterprises (SMEs) have a vital position in the international economy. The study aims to examine the compulsory financial reporting requirements set by the Kosovo Council for Financial Reporting (KCFR) as well as SMEs requirements for reviewing the current classification in the Kosovo context. This study, like most relevant studies, employs ordinal probit regression to examine the relationships among the requirements defined as dependent variables and other control variables such as necessary reclassification review under KCFR, preferred reclassification review under KCFR, experience knowledge of accountants and auditors, continuously education concerning financial reporting, and assessments of business owners. According to the reported conclusions, the application of these requirements in the Kosovo context does not create any opportunities for SMEs. On the contrary, the findings point to a thorough review of the reporting requirements for micro-businesses, as the current classification appears to be a burden for these businesses.
Topic:: Economics, Finance, Business, and State-Owned Enterprises
Political Geography:: Europe and Kosovo

76. China's Belt and Road Initiative and Georgia: A Short Overview

Author:: Ekaterine Lomia
Publication Date:: 09-2021
Content Type:: Journal Article
Journal:: Journal of Liberty and International Affairs
Institution:: Institute for Research and European Studies (IRES)
Abstract:: Since the beginning of the 2000s, China has embarked on an unprecedented path of economic development, as evidence of which is the largest economic project of the XXI century initiated by the People's Republic of China. The global Belt and Road Initiative announced by the first person of the country, Xi Jinping, is a shortened name of the ‘Silk Road Economic Belt’ and ‘XXI Century Maritime Silk Road’. It covers the Asia-Pacific, Europe, Central Asia, Southeast Asia, West Asia, and Africa and involves more than a hundred countries, international organizations, and leading economic actors. The main participants in the project are China, Mongolia, Russia, Azerbaijan, Belarus, Poland, Germany, the Netherlands, Kazakhstan, Kyrgyzstan, Pakistan, Bangladesh, Iran, and India. The article reviews the role of the Chinese project in a global context. The paper focuses on the role and purpose of Georgia in the Belt and Road Initiative. This study will try to reveal the results for the benefit of Georgia, which is one of the participating countries, and the role of China through research to be made from documents and academic studies on the subject. Georgia tries to conduct its relations with China, as a partner in the project, with a policy of balance without disturbing its relations with the West.
Topic:: Economics, Bilateral Relations, Infrastructure, Hegemony, and Belt and Road Initiative (BRI)
Political Geography:: China, Europe, Asia, and Georgia

77. Economic Assessment of the Euro Area: Winter 2020/2021

Author:: Klaus-Jurgen Gern
Publication Date:: 02-2021
Content Type:: Commentary and Analysis
Institution:: Kiel Institute for the World Economy (IfW)
Abstract:: This EUROFRAME Report presents an assess- ment of the economic outlook for 2021 focuses on the euro area based on a synopsis of the fore- casts of EUROFRAME institutes. Perspectives for UK and CEEs countries are described in Boxes A and B, respectively. In the Focus section, we discuss a special topic, based on work done in the EUROFRAME insti- tutes. This time, we discuss the impact that the COVID-19 crisis had on labour markets in Eu- rope and policy responses to this challenge, based on the experience in the countries hosting EUROFRAME institutes.
Topic:: Economics, Regional Cooperation, European Union, Regionalism, Pandemic, and COVID-19
Political Geography:: Europe

78. German Economy Summer 2021

Author:: Kiel Institute
Publication Date:: 06-2021
Content Type:: Commentary and Analysis
Institution:: Kiel Institute for the World Economy (IfW)
Abstract:: The German economy is picking up speed again. After the resurgence of the Covid-19 pandemic had interrupted the economic recovery in the winter half-year, GDP will expand at a fast pace in the further course of the year and exceed its pre-crisis level again. With the removal of the pandemic-related restrictions, activity will rebound, especially in those areas that were previously particularly burdened. Retail trade and contact-intensive services in particular are likely to benefit from the rebound in private household consumption. For the time being, however, the recovery will be delayed in the manufacturing industry. The strong global recovery has brought with it multi-layered supply bottlenecks that are noticeably hampering production in many firms. Despite the very good order situation, production in the manufacturing industry will therefore probably only gradually return to its recovery path in the second half of the year, provided that the supply bottlenecks then gradually ease. With the supply bottlenecks, price pressures have also increased, especially as economic momentum is high worldwide. Thus, prices for raw materials, intermediate goods and transport services have recently been on a broad upward trend. All in all, GDP is expected to grow by 3.9 percent this year and by 4.8 percent in 2022. Consumer prices will rise at a much faster rate of probably 2.6 percent this year and by around 2 percent in 2022.
Topic:: Economics, GDP, Economic Growth, Pandemic, Industry, and COVID-19
Political Geography:: Europe and Germany

79. Decoupling Europe

Author:: Gabriel Felbermayr, Steffen Gans, Hendrik Mahlkow, and Alexander Sandkamp
Publication Date:: 07-2021
Content Type:: Policy Brief
Institution:: Kiel Institute for the World Economy (IfW)
Abstract:: The COVID-19 pandemic revealed the vulnerability of international value chains in the face of global shocks. This has triggered a political discussion regarding a possible reshoring of vulnerable supply chains back home. The aim is to reduce dependencies on foreign suppliers and thus improve crisis resilience of the domestic economy. The debate is also rooted in the growing dependence on Asian suppliers and the colliding political and ideological systems between China and the West. Unilateral decoupling of the EU from China (a doubling of trade costs) would reduce real income in the EU on average by 0.8 percent. In terms of GDP in 2019, this equals a permanent loss in real income of 131.4 bn EUR. Should China retaliate, real income would fall by 1.0 percent (170.3 bn EUR). With its extremely interconnected economy, real income in Germany would even decline by 1.4 percent (48.4 bn EUR). China would also lose from such a trade war, with real income declining by 1.3 percent. Should the EU increase its trade barriers against all its non-European trading partners, real income in the Union would fall by 3.5 percent or 584.3 bn EUR in case of a unilateral increase and by 5.3 percent or 873.1 bn EUR in case the rest of the world responds by also raising trade barriers.
Topic:: Economics, Regional Cooperation, European Union, Economic Cooperation, Pandemic, and COVID-19
Political Geography:: China and Europe

80. Automotive Global Value Chains in Europe

Author:: Matteo Gaddi and Nadia Garbellini
Publication Date:: 08-2021
Content Type:: Working Paper
Institution:: Institute for New Economic Thinking (INET)
Abstract:: In this paper we examine the main transformations that are affecting European automotive industry and which challenges, in particular due to the transition to new forms of propulsion, the industry is going to face. The automotive industry is central to the European economy and the nature of the Global Value Chains are rapidly shifting. While individual countries have developed economic plans to address this, a broader EU wide plan is critically important to addressing the employment and environmental effects of these shifts.
Topic:: Economics, Industrial Policy, European Union, Manufacturing, and Global Value Chains
Political Geography:: Europe

81. Europe’s invisible divides: How covid-19 is polarising European politics

Author:: Ivan Krastev and Mark Leonard
Publication Date:: 09-2021
Content Type:: Policy Brief
Institution:: European Council on Foreign Relations (ECFR)
Abstract:: The lived experience of the covid-19 pandemic has split Europe just as the euro and refugee crises did, with the south and the east feeling much more badly affected than the north and the west. Some people were affected directly by illness, some only experienced economic consequences, while others feel untouched by covid-19. The economic victims are more likely than others to say that restrictions have been too severe, and they tend to be more sceptical about their governments’ intentions behind lockdowns. Europeans are divided over what they believe to be governments’ motivations behind restrictions: the Trustful have faith in governments; the Suspicious believe rulers want to cover up failings; the Accusers think governments are trying to increase their control over people. Splits are appearing between those who believe that, in the context of the pandemic, the biggest threat to their freedom comes from governments, on the one hand, and those who fear the behaviour of their fellow citizens, on the other. There is a major generational divide, with the young more likely than the old to blame governments for the ongoing impact; the young also feel more badly affected. Poland, Germany, and France could each be emerging as archetypes for post-pandemic politics.
Topic:: Economics, Politics, Refugees, Crisis Management, Pandemic, COVID-19, and Polarization
Political Geography:: Europe, France, Poland, and Germany

82. Measured response: How to design a European instrument against economic coercion

Author:: Jonathan Hackenbroich and Pawel Zerka
Publication Date:: 06-2021
Content Type:: Policy Brief
Institution:: European Council on Foreign Relations (ECFR)
Abstract:: Europe is at ever greater risk of economic coercion from other powers. To protect itself, the EU could adopt a new anti-coercion instrument (ACI) to allow it to impose economic countermeasures. The ACI needs to enable countermeasures that are both effective and credible; if it does not, this could carry more risks than benefits. These countermeasures could include: trade and investment restrictions; export controls and divestment in certain sectors; and restrictions on access to EU public procurement markets. The EU should also include a flexibility mechanism for countermeasures against those forms of economic coercion the ACI cannot cover explicitly. The ACI should be a de-politicisation tool. It must be used only as last resort and should include an effective de-escalation mechanism to trigger dialogue and negotiations.
Topic:: Defense Policy, Economics, European Union, Trade, and Transatlantic Relations
Political Geography:: Europe

83. Back from the brink: A better way for Europe to support Tunisia’s democratic transition

Author:: Tarek Megerisi
Publication Date:: 06-2021
Content Type:: Policy Brief
Institution:: European Council on Foreign Relations (ECFR)
Abstract:: Tunisia is seeking a major IMF bailout loan – but the risks of securing it are almost as great as the risks of failing to, given the conditionality that would ensue. Democratic reforms in Tunisia have stalled, but post-revolution economic progress has never even begun. Tunisian politicians urgently need to combine receipt of a new loan and its accompanying austerity with economic reform and renewal to grow their way out of the crisis. The Tunisia policy of the EU and its member states is similarly stalled, but they can assist Tunisian leaders by providing new investment – and thereby reboot the democratic transition. Success in this endeavour could provide a model for political and economic reforms elsewhere in North Africa, which is in the EU’s interest as it pursues its goal of strategic autonomy in the face of other powers’ growing influence in the region.
Topic:: Foreign Policy, Economics, European Union, Democracy, and Transition
Political Geography:: Europe and Tunisia

84. EU – Japan Economic Partnership Agreement: Strengthening economic ties as a way out of recession

Author:: Jana Záhořová
Publication Date:: 11-2021
Content Type:: Special Report
Institution:: Europeum Institute for European Policy
Abstract:: Today, Japan remains an important international trading partner of the EU. Following China, Japan is the EU’s second-most important trading partner in Asia. According to experts from the European Commission, the Economic Research Institute for ASEAN and East Asia and the University of Pavia, the EU-Japan EPA is a success because it is a great example of a higher degree of economic integration that can put pressure on other countries to feel obliged to adhere to free trade rules rather than protectionism.
Topic:: Economics, Treaties and Agreements, European Union, Partnerships, and Trade
Political Geography:: Japan, Europe, and Asia

85. Is EU leading the way to becoming a global change in business and human rights?

Author:: Leonor Tavares
Publication Date:: 03-2021
Content Type:: Special Report
Institution:: Europeum Institute for European Policy
Abstract:: In the latest EU Monitor Leonor Tavares examines how human rights issues are reflected in the European Union's negotiations and what kind of development could be expected in this area. The pandemic has exposed even more the vulnerabilities of our economic model and underlined the precarious nature of global value chains, demanding us to create better solution. We reached the point, where there is no other option, besides changing the system, meaning that EU has a major responsibility to stop importing human rights and environment violations through the consumption of goods hailing from areas where European standards/values are not respected, and this proposal is a recognition of that reality.
Topic:: Development, Economics, Environment, Human Rights, and European Union
Political Geography:: Europe

86. The Economic Importance of Motorcycles to Europe

Author:: Oxford Economics
Publication Date:: 09-2021
Content Type:: Working Paper
Institution:: Oxford Economics
Abstract:: Motorcycle-related activity supports €21.4 billion of output (GDP) across Europe a year, sustains 389,000 jobs, and generates €16.6 billion of tax revenues, according to research by Oxford Economics. This means that in 2019 economic activities associated with motorcycling generated more GDP, and employed more people, than the metropolitan area economies centred on Venice, Malaga, and Palma de Mallorca. The total tax impact would have been sufficient to cover the pay of 380,000 teachers, or some 6.5% of all European teachers. Four-fifths of the total was accounted for by six countries, namely Italy (23%), Germany (20%), France (13%), the UK (11%), Spain (7%), and Austria (7%). This report, commissioned by ACEM, the motorcycle industry in Europe, also investigates the international trade in motorcycles and parts. In 2019, manufacturers in the EU-27 and the UK sold €2.1 billion of these goods to non-European customers—so that exports accounted for 39% of their total sales by value. Even so, European countries had a trade deficit in these products, with imports totalling €4.5 billion. Large quantities are imported from Asian countries where European manufacturers face high import tariffs. These high custom duties protect their domestic markets by making European vehicles relatively more expensive. This report, commissioned by ACEM, the motorcycle industry in Europe, also investigates the international trade in motorcycles and parts. In 2019, manufacturers in the EU-27 and the UK sold €2.1 billion of these goods to non-European customers—so that exports accounted for 39% of their total sales by value. Even so, European countries had a trade deficit in these products, with imports totalling €4.5 billion. Large quantities are imported from Asian countries where European manufacturers face high import tariffs. These high custom duties protect their domestic markets by making European vehicles relatively more expensive.
Topic:: Economics, Fiscal Policy, Manufacturing, and Motor Vehicles
Political Geography:: Europe

87. The economic contribution of UK rail

Author:: Oxford Economics
Publication Date:: 09-2021
Content Type:: Working Paper
Institution:: Oxford Economics
Abstract:: The UK railway sector supported £42.9 billion of economic production (GVA) in 2019, associated with 710,000 jobs. Productivity and wage levels, both on the railways and in the rail supply sector, were above-average in every region. The UK railway sector supported £42.9 billion of economic production and was associated with 710,000 jobs and £14.1 billion in tax revenues in 2019, new research by Oxford Economics finds. The rail transport system—Network Rail and the train and metro system operators—accounted for £12.2 billion of that total Gross Value Added (GVA) measure of output. For every £1 of activity on the railway system itself, a further £2.50 of income was generated elsewhere in the UK economy, as a result of supply chain links and other knock-on effects. This extra GVA comprised £17.8 billion in the rail supply sector, £0.9 billion in on-station retail and its suppliers, and £12.0 billion across the wider consumer-facing economy due to wage-funded employee spending (the so-called ‘induced impact’). The study, commissioned by the Railway Industry Association (RIA), also finds that both productivity and wages are higher than the economy-wide average, in both the rail transport system and rail supply sector. This is true not just for the UK as a whole, but for every one of its 12 constituent regions and countries. Finally, the analysis looks at the potential impact of extra public spending on the UK rail infrastructure. Looking further into the future, if rail infrastructure spending were 50% higher than the ‘baseline’ expectation, an extra 104,000 rail supply sector jobs would be supported throughout the five-year period 2025-29. Even if these jobs simply displaced other work, the economy would still benefit, because of their high-productivity, high-wage nature. In the more immediate future, the economy will still be recovering from the Covid pandemic, and will therefore have a degree of spare capacity. This means that any extra jobs created by an uplift in rail infrastructure investment could be genuinely additional, rather than displacing other employment. And this work could support more new jobs in turn, through induced effects. Here, we find that every extra £100 million per annum of spending on rail infrastructure would support an additional 1,400 well-paid jobs in the rail supply sector, plus a further 700 jobs across the wider consumer-facing economy.
Topic:: Economics, Infrastructure, Railways, and Travel
Political Geography:: United Kingdom and Europe

88. The socio-economic impact of cultivated meat in the UK

Author:: Oxford Economics
Publication Date:: 09-2021
Content Type:: Working Paper
Institution:: Oxford Economics
Abstract:: A report on the potential socio-economic benefits of the cultivated meat sector in conjunction with leading UK producer Ivy Farm Technologies. The cultivated meat industry is in its infancy, both in the UK and in most countries around the world. But it clearly presents significant opportunities for entrepreneurs, investors, and other commercial partners to exploit the global potential of a move away from conventional farming towards more sustainable methods. However, the UK industry is currently not able to take advantage of the commercial opportunities while it awaits regulatory approval. This report has sought to demonstrate that there is a strong economic rationale for allowing UK firms to move from research and development into production. As the report highlights, the UK cultivated meat market has the potential to grow into an industry with a total gross value added contribution to UK GDP of over £2 billion in 2030. The detailed analysis of the value of economic activity generated, the number of highly-skilled jobs created and supported, and the taxation revenue (up to £523 million) generated shows the industry has the potential to become an important sectoral driver of growth during the next decade.
Topic:: Economics, Job Creation, Socioeconomics, and Business Management
Political Geography:: United Kingdom and Europe

89. The Economic Impact of an Online Retail Sales Tax in the UK

Author:: Oxford Economics
Publication Date:: 11-2021
Content Type:: Working Paper
Institution:: Oxford Economics
Abstract:: Amazon have commissioned Oxford Economics to produce an independent quantitative assessment of the economic implications of the introduction of an online sales tax in the UK. On 27 July 2020, HM Treasury (HMT) announced a call for evidence around the issue of a business rates review. Contained within this document was a consideration of alternative tax bases that could raise revenue for the Exchequer to compensate for any shortfall that might be created by business rates reform. One of the options proposed was an online sales tax (OST). In this context, Amazon have commissioned Oxford Economics to produce an independent quantitative assessment of the economic implications of the introduction of such a tax in the UK. We find that that the introduction of an OST would raise around £1.6 billion in government revenue. The burden of the tax would be split between consumers, online sales platforms, and upstream businesses. Our analysis shows that a majority of the tax’s burden will most likely be borne by consumers who could lose around £1.3 billion in welfare terms. The net inefficiencies due to the OST are estimated to be around £200 million (i.e., 13% of the revenue). The government’s fiscal options will need to be assessed against a range of economic as well as procedural criteria. In our assessment of the OST against the Treasury Select Committee’s principles of taxation, we found that the OST is distortive and also could potentially restrict SMEs from competing in the retail market. Further, the disproportionate impact on households in the lowest income decile and on economically weaker regions of the UK as well as the restrictive effect on the elderly and the disabled raise questions about the fairness of the OST.
Topic:: Economics, Digital Economy, Retail, and Digitalization
Political Geography:: United Kingdom and Europe

90. Assessing the economic, societal, and cultural benefits of YouTube in Poland

Author:: Oxford Economics
Publication Date:: 11-2021
Content Type:: Policy Brief
Institution:: Oxford Economics
Abstract:: This study assesses YouTube’s contribution to GDP and employment in Poland, and its broader impact on society and culture. YouTube enables Polish content creators to reach a large domestic and international audience. This supports substantial economic value for those who earn income from the platform, for example as they are paid a share of the revenues from advertising placed alongside their videos. A YouTube presence can also help creators earn revenues from other sources, such as product sales, brand partnerships, or live performance engagements. These revenue sources not only support jobs and income for the creators themselves, but also wider activity in supply chains, and through workers’ spending. In total, our economic modelling suggests that YouTube’s creative ecosystem contributed around €98 million to the Polish economy in 2020 and supported 11,000 full-time equivalent jobs. In this report we outline our economic analysis, as well as the findings of wider survey research to investigate how YouTube can build skills and knowledge amongst users; enrich and promote Polish culture; and sustain careers for content creators. We also highlight how YouTube has proved helpful during Covid-19. Alongside the findings from our economic modelling and surveys, we present a series of case studies to highlight th the personal stories of successful Polish content creators.
Topic:: Economics, Mass Media, Social Media, YouTube, and Content Analysis
Political Geography:: Europe and Poland

91. Assessing the economic, societal, and cultural benefits of YouTube in Spain

Author:: Oxford Economics
Publication Date:: 11-2021
Content Type:: Policy Brief
Institution:: Oxford Economics
Abstract:: YouTube enables Spanish content creators to reach a large domestic and international audience. This supports substantial economic value for those who earn income from the platform, for example as they are paid a share of the revenues from advertising placed alongside their videos. A YouTube presence can also help creators earn revenues from other sources, such as product sales, brand partnerships, or live performance engagements. These revenue sources not only support jobs and income for the creators themselves, but also wider activity in supply chains, and through workers’ spending. In total, our economic modelling suggests that YouTube’s creative ecosystem contributed around €313 million to the Spanish economy in 2020 and supported 21,000 full-time equivalent jobs. In this report we outline our economic analysis, as well as the findings of wider survey research to investigate how YouTube can sustain careers for content creators; build skills and knowledge amongst users; and promote Spanish culture to a global audience. We also highlight how YouTube has proved helpful during Covid-19. Alongside the findings from our economic modelling and surveys, we present a series of case studies to highlight the personal stories of successful Spanish content creators.
Topic:: Economics, Mass Media, Social Media, YouTube, and Content Analysis
Political Geography:: Europe and Spain

92. Assessing the economic, societal, and cultural benefits of YouTube in Italy

Author:: Oxford Economics
Publication Date:: 11-2021
Content Type:: Policy Brief
Institution:: Oxford Economics
Abstract:: YouTube enables Italian content creators to reach a large domestic and international audience. This supports substantial economic value for those who earn income from the platform, for example as they are paid a share of the revenues from advertising placed alongside their videos. A YouTube presence can also help creators earn revenues from other sources, such as product sales, brand partnerships, or live performance engagements. These revenue sources not only support jobs and income for the creators themselves, but also wider activity in supply chains, and through workers’ spending. In total, our economic modelling suggests that YouTube’s creative ecosystem contributed around €190 million to the Italian economy in 2020 and supported 15,000 full-time equivalent jobs. In this report we outline our economic analysis, as well as the findings of wider survey research to investigate how YouTube can sustain careers for content creators; promote Italian culture to a global audience; drive cultural diversity; and support businesses. We also highlight how YouTube has proved helpful during Covid-19. Alongside the findings from our economic modelling and surveys, we present a series of case studies to highlight the personal stories of successful Italian content creators.
Topic:: Economics, Mass Media, Social Media, YouTube, and Content Analysis
Political Geography:: Europe and Italy

93. Assessing the economic, societal, and cultural benefits of YouTube in Ireland

Author:: Oxford Economics
Publication Date:: 12-2021
Content Type:: Policy Brief
Institution:: Oxford Economics
Abstract:: YouTube enables Irish content creators to reach a large domestic and international audience. This supports substantial economic value for those who earn income from the platform, for example as they are paid a share of the revenues from advertising placed alongside their videos. A YouTube presence can also help creators earn revenues from other sources, such as product sales, brand partnerships, or live performance engagements. These revenue sources not only support jobs and income for the creators themselves, but also wider activity in supply chains, and through workers’ spending. In total, our economic modelling suggests that YouTube’s creative ecosystem contributed around €30 million to the Irish economy in 2020 and supported 1,600 full-time equivalent jobs. In this report we outline our economic analysis, as well as the findings of wider survey research to investigate how YouTube can build skills and knowledge amongst users; promote cultural diversity; and sustain careers for content creators. We also highlight how YouTube has proved helpful during Covid-19.
Topic:: Economics, Mass Media, Social Media, YouTube, and Content Analysis
Political Geography:: Europe and Ireland

94. The European Union at a Crossroads: Unlocking Renewable Hydrogen’s Potential

Author:: Nicola De Blasio and Alejandro Nuñez-Jimenez
Publication Date:: 11-2021
Content Type:: Policy Brief
Institution:: Belfer Center for Science and International Affairs, Harvard University
Abstract:: European countries are at a crossroads on their path to carbon neutrality. Today, they are at the forefront of the global clean hydrogen race but going forward they would be better served by collaborating instead of working alone. Overall, the European Union (EU) is highly competitive in clean technologies manufacturing and thus well-positioned to benefit from the emergence of global hydrogen markets. But a narrow focus on short-term cost considerations could drive member states to implement national roadmaps with little or no coordination among themselves and hence little or no chance of competing globally. As a bloc, the EU has pledged to reach carbon neutrality by 2050. Clean hydrogen is a cornerstone of this transformational effort; accordingly, in July 2020, the EU adopted its hydrogen strategy with the ambition of deploying open and competitive clean hydrogen markets for all energy sectors and segments by 2050.1 Success hinges around implementing a cohesive long-term strategy to address a fundamental ques- tion and its associated challenges: where could the EU source competitive and secure renewable hydrogen supplies? As our previous research shows, all countries have access to renewable resources (such as solar or wind), to different degrees, and could produce some renewable hydrogen locally. However, while resource-rich countries, such as Spain, could evolve into regional exporters, no EU member state has the potential to become a global export champion. At the same time, North African countries, such as Morocco, are well-situated to act as key suppliers to the EU. Furthermore, imports from resource-rich regions like North America could help to address security of supply concerns.2 Today, EU hydrogen demand stands at 7.8 million tons per year (Mt/yr), equivalent to about 10% of global demand. Germany and the Netherlands are the largest consumers, accounting for over a third of EU demand, followed by Poland, Spain, Italy, Belgium, and France, which consume about 0.5 Mt/yr each.3 According to available projections, as hydrogen use grows across all economic sectors, EU hydrogen demand could reach 76 Mt/yr by 2050. But while the EU strategy sets clear targets on electrolyzer deployment by 2030, it provides very few details on how the bloc could meet demand—and at what cost—by 2050.
Topic:: Economics, Environment, Science and Technology, Natural Resources, European Union, Innovation, Hydrogen, and Energy
Political Geography:: Europe

95. Forty Years On New Perspectives on the 1981 Budget

Publication Date:: 12-2021
Content Type:: Video
Institution:: Mile End Institute, Queen Mary University of London
Abstract:: This year is the fortieth anniversary of the 1981 UK Budget Statement, one of the most controversial in British history. Geoffrey Howe, the Conservative Chancellor in Margaret Thatcher's first government, deliberately increased taxes during a vicious world recession after two years of tight monetary policy and punishingly high-interest rates, to tame high inflation. Inflation dropped, but the Budget also accelerated deindustrialization and spiralling unemployment, and turbocharged inequality. It has since indelibly shaped memories of ‘Thatcherism’. Forty years on, the current Conservative government is at a new fork in the road in its economic policy, grappling with pandemic spending legacies, the fallout from Brexit, and post-2008 economics, and with electoral pledges both to fiscal probity and to 'level up' the UK.
Topic:: Economics, Labor Issues, Governance, Budget, Unemployment, and Deindustrialization
Political Geography:: United Kingdom and Europe

96. Celebrating 20 Years of The Living Wage at Queen Mary University of London

Publication Date:: 11-2021
Content Type:: Video
Institution:: Mile End Institute, Queen Mary University of London
Abstract:: The Living Wage Campaign was launched by London Citizens in Walthamstow, East London, in 2001. Since then, it spread across the country and became a nationwide campaign led by the Living Wage Foundation. In 2006, Queen Mary became the first accredited university in the UK to pay all staff a real Living Wage, based on the cost of living, not just the government minimum. Queen Mary also improved working conditions so that every staff member at the university – regardless of rank or role – received a minimum of 30 days’ annual leave, access to sick pay, an annually negotiated pay increase, and an employer contribution pension scheme. In 2011, the University became a founding partner of the Living Wage Foundation. At this event to mark twenty years of the Living Wage Campaign, the Mile End Institute hosted a conversation with Matthew Bolton, the Executive Director of Citizens UK, to revisit the history of the Living Wage and the campaign to establish the living wage at Queen Mary. The event reflected on how the Living Wage is a vital strategy in the fight to end poverty in London and the important role of higher educational institutions in creating a fairer society.
Topic:: Economics, Poverty, Labor Issues, and Standard of Living
Political Geography:: United Kingdom and Europe

97. Banking Bailout Law: A Comparative Study of the United States, United Kingdom and the European Union

Publication Date:: 10-2021
Content Type:: Video
Institution:: Mile End Institute, Queen Mary University of London
Abstract:: Our expert panellists discussed Virág Blazsek’s book, Banking Bailout Law: A Comparative Study of the United States, United Kingdom and the European Union, which examines the different bank bailout and resolution techniques and tools through carefully selected case studies. The panel explored the pros and cons of the different legal and regulatory options identified by the book to reconstruct a regulatory framework that might better serve countries in future financial crises.
Topic:: Economics, European Union, Finance, Banking, and Bailout
Political Geography:: United Kingdom, Europe, North America, and United States of America

98. Risen from the Ruins: The Economic History of Socialism in the German Democratic Republic

Author:: Tricontinental: Institute for Social Research
Publication Date:: 04-2021
Content Type:: Working Paper
Institution:: Tricontinental: Institute for Social Research
Abstract:: The German Democratic Republic (DDR) was a socialist state founded in 1949 as a democratic, antifascist reaction to the Second World War. It redistributed land, socialised the means of production, and collectivised the agricultural system. This socialist state established an egalitarian education, healthcare, and social system, and guaranteed equal rights between men and women. It cultivated friendly and close-knit economic relationships with other socialist states and supported countries fighting for their independence in Latin America, Asia, and Africa by showing international solidarity. The establishment of a just society based on the principles of equality was the DDR’s declared objective. With public ownership of the means of production as its foundation, the country developed into a powerful and efficient industrial state that used its economic profit for the benefit of its citizens and guaranteed them a life of social security. Ultimately, the DDR was extremely successful in realising its main socio-political goal: the satisfaction of the growing material and cultural needs of its people. But why bother re-examining the DDR’s achievements, principles, and structures thirty years after its downfall? What can we learn from the DDR’s alternative economic practices in today’s world, where the triumph of capitalism has exacerbated the problems of inequality and poverty and has resulted in more frequent crises? What did socialist democracy really look like? What contradictions arose from the everyday application of a planned economy? What lessons can we draw from the DDR’s ultimate failure? With this series Studies on the DDR, the Internationale Forschungsstelle DDR (International Research Centre DDR) together with Tricontinental: Institute for Social Research seek to encourage a new engagement with the history and principles of the DDR. It is our goal to re-evaluate the legacy and experiences of this socialist state. For this reason, we use the German acronym DDR, or Deutsche Demokratische Republik, (English: GDR) specifically because it often represents a positive point of reference in many parts of the world and especially for countries in the Global South. This educational series on the socialist agenda and realities of the DDR explores aspects of everyday life, provides facts about the country’s social achievements, and examines the political and economic foundations of this socialist state. By reflecting on the lived experiences of daily life, which are generally left out of the dominant narrative due to the crushing victory of capitalism and the dominance of the market economy, we hope to make a useful contribution to the debate currently taking place within progressive movements. After all, millions of people around the world are still fighting for advancements that were once a given in this socialist system but were lost with its downfall. This first publication in Studies on the DDR will briefly outline the formation of the DDR and its economic circumstances from the country’s inception to its end. In order to fully understand the specific DDR brand of socialism, we must highlight the historical conditions from which it emerged. The DDR was born in times of crisis in the aftermath of a devastating war as Germany – the instigator of the Second World War – was divided in two. It is imperative that we examine the DDR in its relationship to West Germany, which it opposed in the ensuing Cold War between the communist and capitalist systems. In 1990, after the reunification of Germany, the DDR economy was dismantled. It was treated as a shock therapy prototype for the austerity measures that were soon imposed on other countries – and not just the former socialist states. At the same time, the DDR was politically, judicially, and morally delegitimised. The publications in this series are a rejection of the narrative propagated by enemies of socialism, both new and old, that the downfall of the DDR proves the inevitable failure of socialist policy and economy. By depicting the realities of life in the DDR and by affirming the experiences of DDR citizens, we hope to remind the reader that alternatives to capitalism did and do exist.
Topic:: Economics, Governance, State Building, Socialism, and Political Crisis
Political Geography:: Europe, Germany, and East Germany

99. Economic Sentiment Indicators and Foreign Direct Investment: Empirical Evidence from European Union Countries

Author:: Andrzej Cieślik and Mahdi Ghodsi
Publication Date:: 07-2021
Content Type:: Working Paper
Institution:: The Vienna Institute for International Economic Studies (WIIW)
Abstract:: This paper studies the role of business sentiment in the decisions of multinational enterprises (MNEs) to undertake foreign direct investment (FDI) across European Union (EU) member states. Based on the knowledge-capital model, the study employs the Pseudo Poisson Maximum Likelihood (PPML) estimator and panel data to examine empirically the determinants of FDI across EU member states during the period 2003-2017. The empirical evidence suggests that better economic sentiment in an EU Member State induces MNEs to undertake FDI in that country, while worse economic sentiment in an EU member state motivates an MNE in that country to invest abroad.
Topic:: Economics, Markets, Foreign Direct Investment, European Union, Business, and Multinational Corporations
Political Geography:: Europe

100. German Economy Winter 2021: Recovery temporarily on hold

Author:: Martin Ademmer, Dominik Groll, Nils Jannsen, Saskia Meuchelbock, Jens Boysen-Hogrefe, Nils Sonnenberg, and Stefan Kooths
Publication Date:: 12-2021
Content Type:: Working Paper
Institution:: Kiel Institute for the World Economy (IfW)
Abstract:: The recovery of the German economy is interrupted once again. In the winter, the new Covid-19 wave will particularly hit activity in contact-intensive service sectors as in previous waves. As a result, there will be a setback in private consumer spending and probably also small declines in GDP. To the extent that the burdens of the pandemic ease in the spring, a strong recovery will set in, similar to the pattern observed this year. Economic momentum will likely be particularly high as the supply bottlenecks, which are massively dampening industrial production in this year, are expected to ease. Overall, the renewed slowdown in the recovery process caused by the pandemic will probably be larger than we had expected in our autumn economic outlook. However, the setback will be not as severe as last winter. In 2022, GDP will probably increase by 4 percent and thus less strongly than we had expected three months ago (5.1 percent). For 2023, we revise GDP growth upwards to 3.3 percent (autumn outlook: 2.3 percent). This year, GDP will increase by 2.6 percent. Inflation will remain high for the time being, also because supply bottlenecks continue to increase manufacturing costs and tighten the supply of consumer goods. At the same time, private households have accumulated additional savings of around 200 billion euros since the beginning of the pandemic and therefore have a rather high willingness to pay. Consumer price inflation will probably be around 3 percent both this and next year, before easing again in 2023. The public budget deficit will fall noticeably from 3.8 percent in relation to GDP in 2021 to 1.8 percent in 2022 due to the reduced burden of the pandemic. However, the budgets are still expected to close with a deficit of 1.4 percent in 2023.
Topic:: Economics, GDP, Pandemic, and COVID-19
Political Geography:: Europe and Germany

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COLUMBIA UNIVERSITY PRESS