Political Geography: Europe - CIAO Search Results

51. European Solar PV Manufacturing: Terminal Decline or Hope for a Rebirth?

Author:: Thibaud Voïta
Publication Date:: 04-2024
Content Type:: Working Paper
Institution:: Institut français des relations internationales (IFRI)
Abstract:: While solar photovoltaic (PV) installations are booming in Europe (and in other parts of the world), the local industry is closing down. Over the past two years, the European installed solar PV capacity has been multiplied by two. On the other hand, the remaining European manufacturers of solar PV panels are dying. Installed solar PV capacities are experiencing an unprecedented increase in Europe: in two years, they have been multiplied by two with 60 gigawatts (GW) added in 2023. However, local solar PV manufacturers are not benefiting from it as the Chinese competition is knocking them down. Structurally much more competitive, prices of Chinese solar panels have further decreased by 42% in 2023 – making it difficult even for some Chinese companies to survive and forcing many of the remaining European manufacturers out of the market. This situation fragilizes Europe’s strategic autonomy and decarbonization. Covid-19-like disruption or an aggression against Taiwan would leave the continent without any supply. American manufacturers are also flexing their muscles with the aggressive Inflation Reduction Act. Europe’s answer, the Net Zero Industry Act (NZIA), a tougher approach to China’s imports and national support measures, could create a new generation of solar PV manufacturers in Europe.
Topic:: Manufacturing, Renewable Energy, Solar Power, Decarbonization, Strategic Autonomy, and Energy Transition
Political Geography:: Europe

52. German Ports and China: How to Reconcile Openness, Resilience and Security?

Author:: Marie Krpata
Publication Date:: 04-2024
Content Type:: Case Study
Institution:: Institut français des relations internationales (IFRI)
Abstract:: Germany is dependent on its ports for the smooth running of its open economic model and has benefited from globalization in recent decades when the internationalization of its value chains strengthened its competitiveness. Yet, with today’s hardening geopolitics, the vulnerabilities of Europe’s leading economic power are becoming apparent. Germany’s ports are an indispensable interface between its production base and its export markets, as well as for its sources of supply. Crucial to its competitiveness, Germany’s ports are becoming increasingly indispensable for energy supplies given the country’s decoupling from Russian hydrocarbons, and they are essential for the deployment of military equipment to Europe’s eastern flank. This is why particular vigilance is required in ports such as Hamburg, where the Chinese shipping company COSCO has acquired a stake in the company operating the Tollerort terminal. This transaction would scarcely have worried anyone in the past. But now it is the subject of bitter discussions, with the Zeitenwende (“change of era”) announced by Olaf Scholz in reaction to Russia’s war of aggression against Ukraine. Increased caution seemed to gain a foothold in order not to repeat past mistakes –until the German Chancellor decided in favor of the acquisition. Given closer ties between China and Russia, China’s assertive stance on the international stage, and increased pressure on Germany from its American ally to clarify its position with regard to its main trading partner, Germany is seeing its room for maneuver shrink. Today, we need a more European approach that goes beyond short-term, profit-driven concerns. But to achieve this, we need to put in place a range of resources to be deployed in a resolutely cooperative approach.
Topic:: Security, International Trade and Finance, Sports, Trade, Industry, and Resilience
Political Geography:: China, Europe, Asia, and Germany

53. Xi Jinping’s Visit to France: Stumbling Blocks Pile Up on the Path of Bilateral Cooperation

Author:: Marc Julienne
Publication Date:: 05-2024
Content Type:: Working Paper
Institution:: Institut français des relations internationales (IFRI)
Abstract:: On May 6 and 7, Chinese President Xi Jinping will pay a state visit to France, his first to Europe since 2019 and the Covid-19 pandemic. Emmanuel Macron and Xi Jinping will celebrate Franco-Chinese friendship and the sixtieth anniversary of the establishment of diplomatic relations between their two countries. It comes at a time when the bilateral relationship is officially perceived as positive on both sides, especially after the French President’s visit to China in April 2023. However, beneath the diplomatic varnish, obstacles are piling up, and the space for cooperation between the two countries is receding. Of the four major areas of cooperation on the visit’s agenda – Ukraine, economic relations, human and cultural exchanges, and global challenges – the first three are already facing significant limitations. Beyond the strictly bilateral relationship, the two heads of state have radically different visions of and for Europe. Finally, there is a number of issues that remain absent from the discussions, which are not likely to ease tensions: the Taiwan Strait, nuclear arms control and Chinese interference in Europe. They will need to be addressed sooner or later.
Topic:: Foreign Policy, Diplomacy, Bilateral Relations, Emmanuel Macron, and Xi Jinping
Political Geography:: China, Europe, Asia, and France

54. South Korea’s Emergence as a Defense Industrial Powerhouse

Author:: Wooyeal Paik
Publication Date:: 02-2024
Content Type:: Working Paper
Institution:: Institut français des relations internationales (IFRI)
Abstract:: In recent years, South Korea’s ascent in the global arms market has been remarkable. This surge, particularly amid a shifting geopolitical landscape and the ongoing Ukraine-Russia War, has captured the attention of security watchers worldwide. This paper delves into the intricacies of the South Korean defense industry’s rapid emergence, wherein arms sales skyrocketed to 17.3 billion USD in 2022, and provides an in-depth analysis of its portfolio, capacity, and the rationales guiding its development over the last five decades. It explores how South Korea has capitalized on critical opportunities, including overcoming steep barriers to entry to major contracts with Central and Eastern European countries, especially Poland. It sheds light on South Korea’s competitive technologies, mass production capacity, and cost-effectiveness, and addresses the crucial role played by the government’s diplomatic support and coordination with key allies and partners. Against that backdrop, it concludes with some implications for the global defense industry and security architecture.
Topic:: Security, Defense Industry, Armament, and Arms Sales
Political Geography:: Europe, Asia, South Korea, and Poland

55. Germany’s Strategy on Climate Foreign Policy: Balancing Sustainable Development and Energy Security

Author:: Jeanette Süß
Publication Date:: 03-2024
Content Type:: Case Study
Institution:: Institut français des relations internationales (IFRI)
Abstract:: With the war in Ukraine, Germany’s “traffic light” coalition government has had to adapt its climate policy to the upheavals caused by this war, which has turned its economic, energy, and military model upside down. Against a backdrop of high energy costs and increasing calls for reshoring in Europe, German industry is looking at how to maintain its competitiveness while decarbonizing its industry. To combat climate change and find new forms of energy cooperation that are more sustainable for the planet, the federal government has set up a Strategy on Climate Foreign Policy bringing together its collaborative actions with partner countries. Climate, energy, and development partnerships play a vital role in this context, and emerging countries are key partners for climate initiatives. They have a high demand for energy and exploit resources, though without always respecting environmental, social, and governance standards. Their renewable energy (RE) production potential is significant, and there are major opportunities for CO2 reduction thanks to modernization technologies that Germany is seeking to transfer to its partners. To this end, Germany is using a multitude of diplomatic tools and is leveraging a unique network of international agencies, chambers of commerce and climate finance players.
Topic:: Climate Change, European Union, Sustainable Development Goals, Renewable Energy, and Energy
Political Geography:: Europe and Germany

56. Russia’s Ideological Construction in the Context of the War in Ukraine

Author:: Marlène Laruelle
Publication Date:: 03-2024
Content Type:: Special Report
Institution:: Institut français des relations internationales (IFRI)
Abstract:: Since the full-scale invasion of Ukraine on February 24, 2022, the Russian government has been proactive in the ideological realm to ensure the sustainability of the war for Russian society. Counter to the claims of many Western observers, this paper argues that the Russian regime does have an ideology, which translates into a relatively coherent political project for Russia and a desire to build a new world order. This ideology is based on a set of beliefs that has evolved over the years while remaining true to its core principles. However, it draws on an eclectic doctrinal stock and multiple (sometimes contradictory) repertoires and sees content as situational and therefore malleable. With the war, proponents of the officialization of a state ideology—all from the hawkish part of the establishment—have been gaining weight: the Presidential Administration now mainly reproduces language and tropes that have long been present in the security and military realm and have become the official doxa. Yet while new indoctrination methods and textbooks are introduced to the school system, the Kremlin has not so far recreated a Soviet-style ideological monolith: even in the context of war, it appears hesitant to engage in excessive “true teaching”, preferring a functional, technocratic understanding of ideology. After briefly defining what ideology means for the Putin regime, this paper explores how the main set of beliefs, strategic narratives, and doctrines have stabilized and gained increased internal coherence, as well as how new textbooks and military-patriotic indoctrination mechanisms are developed, before delving into the social reception of this official ideology.
Topic:: Ideology, Vladimir Putin, and Russia-Ukraine War
Political Geography:: Russia, Europe, and Ukraine

57. When Life Gives You Lemons: How EU Citrus Standards Can Limit Trade

Author:: Trinity Johnson
Publication Date:: 04-2024
Content Type:: Journal Article
Journal:: Journal of Public and International Affairs (JPIA)
Institution:: School of Public and International Affairs (SPIA), Princeton University
Abstract:: In the early 2000s, the European Union (EU) created multiple standards on agricultural imports. This paper focuses on the effect of stricter maximum residue limits (MRLs) for pesticides on citrus fruit exports to the EU after the limits went into effect in 2005. Using a regression model on overall citrus fruit exports and an interaction term for country-level income, the data shows that the EU’s stricter MRLs hurt exports from high-income, lower-middle-income, and low-income countries. Exports from low-income countries declined the most after 2005, while only upper-middle-income countries saw an increase in exports. For product-specific models, low-income countries saw a reduction in exports to the EU for all citrus fruits, while results varied by fruit for other income classifications. The results of these models demonstrate that the EU’s tightened pesticide regulation hurt low-income countries the most. While the regulation is meant to maintain a standard of food quality in the EU, its impact on low-income countries raises important questions about the unintended effects of import regulations. The EU could maintain its quality of food while alleviating the burden on low-income countries by relaxing its MRL standards or by providing more assistance to developing nations to meet its standards.
Topic:: Agriculture, European Union, Regulation, and Imports
Political Geography:: Europe

58. Migrant Death and Disappearability at Sea: Mediterranean Necropolitics as a European Strategy of Migration Deterrence

Author:: Bertille Motte
Publication Date:: 04-2024
Content Type:: Journal Article
Journal:: Journal of Public and International Affairs (JPIA)
Institution:: School of Public and International Affairs (SPIA), Princeton University
Abstract:: The Mediterranean Sea has become the deadliest passage in the world over the past decade, as thousands of migrants lose their lives at sea each year. It has become a key actant of European border violence perpetrated against migrants, as European national and supranational migration institutions instrumentalize the Mediterranean’s natural properties through necropolitical strategies of deterrence. The sea must be understood as a wet ontology and a fluid hybrid border. It is shaped by dynamic and complex interactions between human actors and more-than-human elements through which European violence is passed onto non-European migrants’ bodies. It conceals migrants’ deaths and disappearances, as they become ‘inevitable accidents’ caused by natural and untamable elements. The Mediterranean Sea therefore invisibilizes European structural violence occurring at the border zone and acts as an archive and witness to this violence.
Topic:: Migration, Border Control, Refugees, Violence, Deterrence, Asylum, Necropolitics, and Refugee Policy
Political Geography:: Europe and Mediterranean

59. Understanding the Energy Drivers of Turkey’s Foreign Policy

Author:: Francesco Siccardi
Publication Date:: 02-2024
Content Type:: Working Paper
Institution:: Carnegie Endowment for International Peace
Abstract:: Turkey has an energy dependence problem. For the past two decades, Ankara’s energy needs have been on the rise, and they are projected to continue on an upward trajectory until at least 2035. Yet, the country is not endowed with the proven natural resources to support its energy needs, and so it imports almost all of the energy it consumes. This reliance on energy imports creates economic and security constraints for Ankara. On the economic front, strategic decisions to diversify Turkey’s energy market impact the direction and pace of the country’s economic development. On the security front, dependence on foreign energy exposes Turkey to external shocks and creates vulnerabilities that affect the country’s international posture. To Turkish policymakers, this is hardly breaking news. For many decades, successive governments have been considering ways to diversify the country’s energy portfolio with the objective of ensuring access to affordable, reliable energy supplies. Domestically, this goal has translated into continued investments in locally produced power, such as the development of natural gas fields under the Black Sea and the opening of nuclear and coal-fired power plants across the country. Externally, the aim of diversification has led Ankara to forge a wide range of international partnerships and preserve relations with both Western purchasers of Turkish exports and key energy providers, including Russia and countries in Turkey’s immediate neighborhood. What is more, Ankara pursues its energy diplomacy against the backdrop of a broader geopolitical strategy of bolstering Turkey’s status as a regional power based on its geographic position and connections. At the heart of this strategy is a grand plan to establish Turkey as a major natural gas hub that will put the country at the center of regional energy trade. This policy has ramifications for Ankara’s relations with its close and more distant neighbors. Turkey is surrounded by energy-rich countries, and one of its primary objectives when reaching out to them is to secure the conditions for a steady inflow of energy resources—typically, natural gas and oil. This objective can lead to the development of durable economic partnerships, such as with Azerbaijan, Turkmenistan, and Iran; but it can also spark conflicts of different degrees of intensity, such as with Turkey’s Eastern Mediterranean neighbors and Iraq. Beyond its immediate neighborhood, Ankara’s gas diplomacy is consequential for relations with Russia—with which Turkey has been strengthening its energy relations beyond hydrocarbons—and with Europe. On the demand side of Ankara’s natural gas market equation, European countries are thirsty for non-Russian hydrocarbons in the short and medium term and for green energy in the longer term. Turkey has the potential to provide both, as long as it comes up with strong policies that support these energy transitions. To do so, the Turkish government will need to shift its approaches not only to energy but also to geopolitics. Ankara will have to present itself as a reliable energy partner for Europe and ramp up its investment in clean energy technologies. Delinking Turkey’s economic development from its dependence on hydrocarbons will benefit Ankara financially while bringing it closer to its European allies. Building a long-lasting energy partnership with Europe remains one of Turkey’s greatest challenges.
Topic:: Foreign Policy, Climate Change, and Economy
Political Geography:: Russia, Iraq, Europe, Iran, Turkey, Caucasus, Middle East, Libya, North Africa, and Egypt

60. Charting the Radical Right’s Influence on EU Foreign Policy

Author:: Rosa Balfour and Stefan Lehne
Publication Date:: 04-2024
Content Type:: Special Report
Institution:: Carnegie Endowment for International Peace
Abstract:: The political landscape in the European Union (EU) is changing rapidly. For decades, the traditional mainstream parties of the center right and center left have been losing ground, while antiestablishment parties have been gaining support. According to research by the University of Amsterdam, 32 percent of voters opted for antiestablishment parties in 2021, up from 12 percent in the early 1990s.1 Radical-right parties make up about half of this share, and their support has risen faster than that of any other group. Many of the fourteen parties examined in this study have achieved vote shares of 20 percent or more. The radical right is now in government, or supports the government, in Finland, Hungary, Italy, Slovakia, and Sweden. In the Netherlands, it is likely that Geert Wilders’s Party for Freedom (PVV) will be part of a governing coalition. In other countries, these parties have become the leading opposition groups. In France, Marine Le Pen’s National Rally (RN) has been carefully preparing to win the 2027 presidential election. Setbacks for the radical right in Poland and Spain in the second half of 2023 have shown that the relentless rise of these parties is not a foregone conclusion. However, current polling for several national elections and the June 2024 European Parliament elections indicates a strong likelihood of their continuing electoral success.2 Chega (Enough), a recently established party that shot to 18 percent of the vote in Portugal’s March 2024 election, ended the country’s exceptionalism as one of the few European nations without a right-wing populist party.3 The June 2024 Belgian federal election may see the Flemish nationalist party Vlaams Belang (Flemish Interest), which so far has been strong in Flanders but kept out of national politics, break through at the federal level. Polling for Austria’s September 2024 parliamentary election suggests a surge in support for the Freedom Party of Austria (FPÖ).4 In contrast with populism, which has a thin ideology focused mainly on fomenting the anger of the so-called pure people against corrupt elites and which has risen on both the left and the right of the political spectrum, the radical-right parties of the 2020s have a more distinct ideological profile.5 All have national specificities, such as rural origins in Northern Europe or ethnonationalism in Central Europe. Several parties are rooted in postwar fascism, such as the FPÖ, RN, Brothers of Italy (FdI), the Alliance for the Unity of Romanians (AUR), and the Sweden Democrats (SD). For some groups, strong connections with society and well-developed party structures compensated for their marginal impact in national politics. Before its landslide victory in Italy’s 2022 parliamentary election, support for FdI hovered at around 5 percent, as it did for the party’s predecessor throughout the period since World War II.6 Other parties, such as Hungary’s Fidesz, gained ground as classic populist or even mainstream parties and benefited from an aura of respectability even as they shifted toward ethnonationalist or nativist positions. Since the 1990s, liberal-democratic parties have started to adopt some of the ideas of the radical right while keeping the parties themselves out of government. In the 2000s, the radical right became normalized, in some countries becoming part of the political mainstream. During this process, as political scientists Cas Mudde and Jan-Werner Müller have argued, liberal-democratic parties have shifted toward the radical right in the hope—mostly in vain—of keeping their traditional electorates. Yet, in practice, this approach has led voters to prefer the real radical right to its imitators. In other words, the tactic of chasing the radical right has not paid off electorally. Voters have moved toward the radical right as a consequence, not as a cause, of liberal-democratic parties’ attempts to contain it.7 Today, the far right is dominated by the radical right, which, unlike the extreme right, accepts the essence of democracy but rejects its liberal elements: minority rights, the rule of law, and the separation of powers.8 The radical-right parties selected for this study all share deep antimigration sentiments, often determined by race or religion; a nationalism that makes these parties Euroskeptic and opposed to what they see as a Brussels-based dictatorship; and skepticism of climate change policies. Many of these parties also espouse deeply conservative family values that go against women’s and LGBTQ rights. Foreign policy is usually not the strong suit of these parties, apart from their keen interest in the external dimension of migration policy. These parties pay close attention to Russia’s aggression against Ukraine but are sharply divided on this issue, with positions ranging from deep mistrust of Russia to close alignment with the Kremlin’s arguments. A future Donald Trump administration could lead to new divisions in the EU, as some member states are likely to align with the United States under any circumstances. This would mean that many of the EU’s current foreign policy positions, such as support for Ukraine, would come to an end. As radical-right parties rise to prominence at the national and the EU level, they are developing views on a range of foreign policy issues, building increasingly influential international networks and think tanks, and learning from each other’s successful tactics in solidifying their control of the state and propagating their values.9 For some radical-right parties that have been established in government, such as Fidesz and, until October 2023, Poland’s Law and Justice (PiS) party, the upgrading of foreign policy on their political agendas can be inferred by the fact that all diplomatic postings in the EU are political appointments. Hungary’s foreign policy machinery is under the direct control of the prime minister.10 Diplomatic colleagues of the Hungarian representatives in Brussels know that the country’s negotiating positions are micromanaged in Budapest.11 Other countries, such as Italy and Finland, have chosen to rely on the credibility of career diplomats to navigate the Brussels machinery, preferring compromise over confrontation and isolation. For a long time, European politicians and EU institutions have assumed the radical right could be contained. Now, the challenge of the radical right needs to be addressed more seriously. Just as this phenomenon has eroded democracy and the rule of law in some EU member states, so foreign policy may become affected at a time when collective action is most needed to address international issues. As the radical right challenges the EU’s attempts to navigate a dangerous world, European politics can no longer afford complacency.
Topic:: Security, Foreign Policy, Migration, European Union, Democracy, and Far Right
Political Geography:: Europe, France, and Germany

61. Farmer Protests Across Europe

Author:: Nichita Gurcov, Nicola Audibert, and Cristian Vlas
Publication Date:: 02-2024
Content Type:: Commentary and Analysis
Institution:: Armed Conflict Location & Event Data Project (ACLED)
Abstract:: Farmer demands for more economic protection and less regulation have led to a surge in protests across Europe in the past thre emonths, and especially in the past three weeks. It is the largest wave since the Dutch farmers' protests against their government's plan to cut nitrogen pollution in July 2022.
Topic:: Climate Change, Economics, Protests, Political Movements, and Farmers
Political Geography:: Europe

62. What works for working couples? Work arrangements, maternal labour supply, and the division of home production

Author:: Ludovica Ciasullo and Martina Uccioli
Publication Date:: 05-2024
Content Type:: Working Paper
Institution:: Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:: We document how a change to work arrangements reduces the child penalty in labor supply for women, and that the consequent more equal distribution of household income does not translate into a more equal division of home production between mothers and fathers. The Australian 2009 Fair Work Act explicitly entitled parents of young children to request a (reasonable) change in work arrangements. Leveraging variation in the timing of the law, timing of childbirth, and the bite of the law across different occupations and industries, we establish three main results. First, the Fair Work Act was used by new mothers to reduce their weekly working hours without renouncing their permanent contract, hence maintaining a regular schedule. Second, with this work arrangement, working mothers’ child penalty declined from a 47 percent drop in hours worked to a 38 percent drop. Third, while this implies a significant shift towards equality in the female- and male-shares of household income, we do not observe any changes in the female (disproportionate) share of home production.
Topic:: Economics, Labor Issues, Women, Work, and Home Production
Political Geography:: United Kingdom and Europe

63. Dying Abroad: The Political Afterlives of Migration in Europe

Author:: Osman Balkan
Publication Date:: 02-2024
Content Type:: Video
Institution:: MIT Center for International Studies
Abstract:: On any given day, the remains of countless deceased migrants are shipped around the world to be buried in ancestral soils. Others are laid to rest in countries of settlement, sometimes in cemeteries established for religious and ethnic minorities, where available. For immigrants and their descendants, perennial questions about the meaning of home and homeland take on a particular gravitas in death. When the boundaries of a nation and its members are contested, burial decisions are political acts. Building on multi-sited fieldwork in Berlin and Istanbul – where the author worked as an undertaker – Dying Abroad offers a moving and powerful account of migrants' end-of-life dilemmas, vividly illustrating how they are connected to ongoing political struggles over the stakes of citizenship, belonging, and collective identity in contemporary Europe.
Topic:: Migration, Refugees, Identity, and Death
Political Geography:: Europe

64. EU-LAC inter-regionalism as a driver to achieve the environmental Sustainable Development Goals

Author:: Bruno Theodoro Luciano and Miguel Ayuso
Publication Date:: 12-2024
Content Type:: Journal Article
Journal:: Revista Brasileira de Política Internacional (RBPI)
Institution:: Instituto Brasileiro de Relações Internacionais (IBRI)
Abstract:: This article assesses how environmental issues have been incorporated into the strategic association between the European Union and Latin America and the Caribbean. It analyses whether the 2030 Agenda and the Sustainable Development Goals are reflected in the EU-CELAC declarations, and what bi-regional programmes and projects have been developed in relation to the environmental SDGs. The analysis shows how the environment has become a key priority in both the political dialogue and development cooperation pillars, although it has only recently been included in the trade pillar, and in an incipient way.
Topic:: Environment, European Union, Sustainable Development Goals, Regional Integration, and Trade
Political Geography:: Europe

65. The Realist debate in the context of the War in Ukraine: balancing dynamics, international change and strategic calculus

Author:: Layla Ibrahim Abdallah Dawood and Eugenio Pacelli Lazzarotti Diniz Costa
Publication Date:: 05-2024
Content Type:: Journal Article
Journal:: Revista Brasileira de Política Internacional (RBPI)
Institution:: Instituto Brasileiro de Relações Internacionais (IBRI)
Abstract:: The article discusses Mearsheimer’s interpretation of Russia’s use of force against Ukraine based on concepts and categories of Offensive Realism. It is argued that external balancing lost its place during unipolarity. However, Russian internal balancing is one of the factors that enabled the current conflict, and Russia’s rapprochement with China diminishes the prospects for conflict in Asia, allowing Russian military efforts to be concentrated in the European theater. Additionally, the decision to use force will be analyzed in its strategic dimension. It is concluded that Russia’s activities against Ukraine are entirely consistent with Offensive Realism, despite of Mearsheimer’s allegations contrarywise.
Topic:: International Relations, Realism, Russia-Ukraine War, and Balance of Power
Political Geography:: Russia, Europe, and Ukraine

66. The EU’s Response to the Gaza War Is a Tale of Contradiction and Division

Author:: Martin Konečný
Publication Date:: 01-2024
Content Type:: Journal Article
Journal:: Cairo Review of Global Affairs
Institution:: School of Global Affairs and Public Policy, American University in Cairo
Abstract:: Since the Hamas attacks on October 7 and the start of Israel’s retaliatory offensive in the Gaza Strip, European Union (EU) member states have broadly split into three camps. At one end are those who have professed to stand “on the side of Israel”, flying its flag on government buildings, backing its military campaign, and avoiding criticism even after the Israeli army flattened most of Gaza and killed thousands of Palestinian civilians. The Czech Republic, Austria, and Hungary stand out in this camp, followed by Germany. At the other end of the spectrum are governments that proclaim to stand “on the side of peace” and, while strongly condemning Hamas, have been calling for a ceasefire and openly criticizing Israel for violating international humanitarian law. Belgium, Spain, and Ireland are the most vocal members of this moderate camp, followed by France and several others. The third, middle camp, is made up of those who are somewhere in between the first two groups: siding with Israel but in less absolute terms than the first camp. It would be wrong to label the moderate camp as “pro-Palestinian”. The fact is that there is no pro-Palestinian camp at the level of EU governments: none of them has hoisted Palestinian flags or primarily condemned the Israeli occupation or its devastating Gaza offensive, as many countries in the so-called Global South have done. The only vocal exception may be Spain’s Deputy Prime Minister Yolanda Díaz of the leftwing Sumar party who has denounced “Israeli apartheid” and called for sanctions and an arms embargo against Israel. However, her statements do not represent the position of the government as a whole.
Topic:: European Union, Hamas, Israeli–Palestinian Conflict, and 2023 Gaza War
Political Geography:: Europe, Middle East, Israel, Palestine, and Gaza

67. The inflation surge in Europe

Author:: Patrick Honohan
Publication Date:: 05-2024
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: For most of the decade before the COVID-19 pandemic, undershooting rather than overshooting had been the main inflation problem of the European Central Bank (ECB). During 2020, consumer prices in the euro area were falling; by the end of that year, average inflation since the introduction of the euro two decades earlier stood at only 1.6 percent per year. Things began to snowball in 2021. The 12-month inflation rate steadily accelerated. It reached double digits in the final quarter of 2022—more than twice the level it had ever reached since the euro’s introduction in 1999. Four striking features emerge from a review of the unexpected surge in European inflation since 2021: (1) The ECB’s monetary policy response lagged behind that of the US Federal Reserve, reflecting the more gradual evolution of inflation in the euro area and its distinct pattern of causes; (2) the range of inflation rates across different euro area countries has been unprecedented. This largely reflects the differential impact of war-related energy shocks (especially for natural gas piped from Russia) as well as the differential fiscal response by national governments partially insulating consumers from these shocks; (3) not all households were net losers from the inflation, with some benefiting from the fact that inflation reduced the real value of their indebtedness; and (4) the speed with which inflation was returning toward target during 2023 prompted concerns that the ECB’s monetary tightening might have been pushed too far, prolonging the output slowdown.
Topic:: Monetary Policy, European Union, Inflation, and COVID-19
Political Geography:: Europe

68. Trade policy, industrial policy, and the economic security of the European Union

Author:: Chad P. Bown
Publication Date:: 01-2024
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: Out of fear about its economic security, the European Union is transitioning to a new form of international economic and policy engagement. This paper explores some of the major trade issues surrounding the bloc’s economic security, the role of trade and industrial policies in achieving its objectives, and some of the economic costs of doing so. It begins by explaining why economic security is suddenly playing such a prominent role and providing early evidence to motivate these government interventions. It then turns to a case study—new policies associated with China’s exports of electric vehicles and graphite—that highlights the difficult choices and practical challenges the European Union faces in tailoring policy to address concerns over economic security. The paper then introduces the domestic policy instruments that the European Union, its member states, and other governments are pursuing to address economic security, including stockpiling and inventory management, investment or production subsidies, tariffs, export controls, and regulations on foreign investment, as well as the scope for selective international cooperation over such policy instruments. The paper concludes with some caveats about abandoning interdependence and lessons from history.
Topic:: Security, Industrial Policy, European Union, Trade Policy, and Economic Security
Political Geography:: Europe

69. Tackling the UK's regional economic inequality: Binding constraints and avenues for policy intervention

Author:: Anna Stansbury, Dan Turner, and Ed Balls
Publication Date:: 05-2024
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: This paper analyzes binding constraints to productivity growth in the United Kingdom’s regions outside London and the greater South East. These analyses challenge a number of common arguments about the UK’s regional economic inequality problem. The authors find little evidence consistent with the hypotheses (i) that low shares of university graduates remain the primary constraint on growth for the UK’s regions; (ii) that there is a generalized issue with access to finance for firms outside the South East; or (iii) that low or falling regional migration rates are to blame for the persistence of the UK’s regional economic inequalities. Instead, they find evidence consistent with (i) a specific relative shortage of STEM degrees; (ii) binding transport infrastructure constraints within major non-London conurbations; (iii) a failure of public innovation policy to support clusters beyond the South East, in particular through the regional distribution of public support for research and development (R&D); and (iv) missed opportunities for higher internal mobility due to London’s overheating housing market. The authors also find some suggestive evidence consistent with constraints on access to early-stage equity financing for high growth-potential small and medium-sized enterprises in certain regions.
Topic:: Finance, Economic Growth, Economic Inequality, and Productivity
Political Geography:: United Kingdom and Europe

70. False promises: The authoritarian development models of China and Russia

Author:: Joseph Lemoine, Dan Negrea, Patrick Quirk, and Lauren Van Metre
Publication Date:: 01-2024
Content Type:: Special Report
Institution:: Atlantic Council
Abstract:: Are authoritarian regimes more successful than free countries in offering prosperity to their people? The answer is decidedly no, yet China and Russia actively advertise the “benefits” and “promise” of their authoritarian development model. Beijing and Moscow contend that their governance model—rooted in central control of political, social, and economic life—delivers for their people. The facts prove exactly the opposite and show that countries characterized by repression and concentrated control are far less successful across all metrics of human development than are free societies. That free societies are better for the people residing in them is not an ideological position; it is a statement of fact backed by substantial evidence, including, but not limited to, the Atlantic Council’s Freedom and Prosperity Indexes. This paper aims to showcase why and how the authoritarian development model is inferior to that of free societies. The first section documents democratic backsliding and the reversal of freedom’s fortunes. The second section presents data on how authoritarian regimes have failed to deliver prosperity for their people. The third section outlines how free societies have done the opposite—delivered sustained prosperity for their citizens. The final section offers the conclusion that authoritarian regimes, despite their claims, cannot deliver democratic progress or prosperity for society at large.
Topic:: Foreign Policy, Development, Diplomacy, Politics, Authoritarianism, Reform, and Democratic Transitions
Political Geography:: Russia, China, Europe, and Asia

71. Who’s a national security risk? The changing transatlantic geopolitics of data transfers

Author:: Kenneth Propp
Publication Date:: 05-2024
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: The geopolitics of transatlantic data transfers have been unvarying for the past decade. European governments criticize the US National Security Agency (NSA) for exploiting personal data moving from Europe to the United States for commercial reasons. The US government responds, through a series of arrangements with the European Union, by providing assurances that NSA collection is not disproportionate, and that Europeans have legal avenues if they believe their data has been illegally used. Although the arrangements have not proven legally stable, on the whole they have sufficed to keep data flowing via subsea cables under the Atlantic Ocean. Now the locus of national security concerns about international data transfers has shifted from Brussels to Washington. The Biden administration and the US Congress, in a series of bold measures, are moving aggressively to interrupt certain cross-border data flows, notably to China and Russia. The geopolitics of international data flows remain largely unchanged in Europe, however. European data protection authorities have been mostly noncommittal about the prospect of Russian state surveillance collecting Europeans’ personal data. Decisions on whether to transfer European data to Russia and China remain in the hands of individual companies. Will Washington’s new focus on data transfers to authoritarian states have an impact in Europe? Will Europe continue to pay more attention to the surveillance activities of its liberal democratic allies, especially the United States? Is there a prospect of Europe and the United States aligning on the national security risks of transfers to authoritarian countries?
Topic:: National Security, Science and Technology, Cybersecurity, Geopolitics, Economy, and Digital Policy
Political Geography:: Europe, North America, and United States of America

72. The Gini Trade Index: What Can We Learn from A New Trade Indicator?

Author:: Lucian Cernat
Publication Date:: 01-2024
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: This Policy Brief introduces the Gini Trade Index (GTI) as a new trade synthetic key performance indicator capable of capturing the different distribution of trade values across firm characteristics and across countries. The new indicator replicates the well-known features of the traditional Gini Index, a widely used metric for the skewness of several socioeconomic indicators, in particular income inequality. The Policy Brief calculates the Gini Trade Index for all EU member states and contrasts the case of Slovakia and Cyprus, the EU countries situated at the opposite ends of the Gini Trade Index. The paper finds that the GTI has increased over time in most EU countries and offers a tentative range of optimal GTI values. The final section offers several examples of trade policy initiatives that can reduce trade concentration and lead to greater participation of small and medium enterprises in global trade.
Topic:: European Union, Trade, and Socioeconomics
Political Geography:: Europe, Cyprus, and Slovakia

73. Regulating the Working Conditions of Platform Work: What Can We Learn from EU Member States?

Author:: Oscar Guinea, Elena Sisto, and Oscar du Roy
Publication Date:: 01-2024
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: Policymakers in Estonia, France, Greece, and Spain share the common objective of enhancing the working conditions of platform workers. However, variations in their labour markets, legal frameworks, and political landscapes have led to four distinct approaches in achieving this goal. Predominantly, the Spanish regulation has been geared towards attempting to reclassify platform workers from self-employed to employees. In contrast, the regulatory strategies in France and Greece have focused on retaining the sector within the realm of independent work, while simultaneously improving the working conditions of platform workers. Estonia adopted a broader perspective, emphasising the enhancement of working conditions for all freelancers, not exclusively those categorised as platform workers. This Policy Brief offers a comprehensive evaluation and comparison of the regulatory frameworks governing platform work in four European countries. The comparative analysis draws upon research conducted by the OECD and the World Economic Forum (WEF) on the principles of good regulation. Adapting this research to the context of digital platforms, three key principles for assessing the regulation of working conditions on these platforms were identified: (i) the consistency with the policy objective of improving the working conditions of platform workers; (ii) the feasibility of implementing the regulatory requirements; (iii) the presence of regulatory dialogue and appeal mechanisms. The evaluation of the four countries’ regulations against the three outlined principles offers valuable insights into the regulation of platform work. In Spain, the primary aim of the regulation regarding platform workers was not solely the improvement of working conditions but predominantly the reclassification of platform workers from self-employed to employees. This distinction is crucial, as platform workers highly value the benefits of self-employment, such as access to work, income opportunities, flexibility, and autonomy. Evidence presented in this study suggests that a majority of Spanish delivery workers preferred to maintain their self-employed status, while only about one-third expressed a desire to be classified as employees. Moreover, the Spanish regulation is characterised by a broad formulation of the conditions defining employment for digital delivery workers. This lack of specificity has led to an uncertain application of the regulation, with digital platforms adopting diverse strategies to achieve compliance. Ultimately, the Spanish regulatory framework has been marred by a profound disregard for the interests of, and a notable lack of communication with, those directly impacted by the regulation: the digital platforms and the platform workers. Greece has demonstrated that it is possible to enhance working conditions for platform workers while preserving the advantages of self-employment. The Greek regulation mandates that digital platforms adhere to the same welfare, health, and safety obligations for platform workers as they would for employees. Additionally, Greece has established clear criteria to define the presumption of self-employment for platform workers. This clarity offers legal certainty and enabled platform workers to accurately assess their employment status. Consequently, there has been a notable reduction in court cases regarding the classification of platform workers. France has progressively developed a comprehensive legal framework that has systematically enhanced the rights of platform workers. This development culminated in six pivotal agreements, addressing some of the most challenging aspects of working conditions on digital platforms, such as account deactivation and minimum revenue. These agreements were reached under the auspices of the Autorité des Relations Sociales des Plateformes d’Emploi (ARPE), a public entity instrumental in facilitating effective social dialogue between digital platforms and trade unions. The establishment of clear administrative procedures governing the negotiations within ARPE has been crucial in formulating measures that digital platforms can effectively implement. Estonia’s primary focus is on ensuring adequate working conditions for all freelancers, including platform workers. A considerable number of platform workers in Estonia engage in a contract-for-services (töövõtuleping) with digital platforms. This contract offers a social safety net, including unemployment benefits, sick pay, and healthcare services, while retaining the self-employed status of platform workers. Moreover, this framework provides clarity regarding the rights and responsibilities of both platform workers and digital platforms, facilitating the implementation of a clear and unambiguous regulatory system.
Topic:: Labor Issues, European Union, Regulation, Digital Economy, and Labor Market
Political Geography:: Europe

74. EU Autonomy, the Brussels Effect, and the Rise of Global Economic Protectionism

Author:: Matthias Bauer and Dyuti Pandya
Publication Date:: 02-2024
Content Type:: Working Paper
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: The Brussels Effect, once emblematic of the EU’s alleged influence in shaping global regulations, has now become a factor contributing to global regulatory fragmentation. The EU must recalibrate its trajectory towards a liberal and rules-based trading order, prioritising widespread regulatory liberalisation to counteract the risks of global protectionism and regulatory spirals. A holistic approach, both internally and globally, is crucial to prevent regulatory and subsidy spirals on a global scale. This recalibration is essential to keep global markets open and enhance the EU’s own economic and technological competitiveness. In response to the 2008 financial crises, the EU underwent a shift in its approach to global trade, transitioning towards Strategic Autonomy. However, this gradual move away from a liberal global trade order has led to increased regulatory burdens and regulatory fragmentation, impacting businesses within and beyond the EU. The Brussels Effect, as denoted in this paper, highlights the EU’s signalling effect on other governments in considering and implementing regulations. This effect has contributed to increased trade restrictiveness and regulatory fragmentation globally. The EU’s insistence on “autonomy” and “European values” not only empowers others to follow suit, contributing to the rise in global protectionism, but also contradicts the EU’s historical support for open trade principles and its commitment to a highly competitive social market economy. A wealth of EU regulatory data reveals a stagnation and, in many cases, a regression in regulatory cooperation within the Single Market. This is evident from rising trade restrictiveness and a tendency towards increased legal fragmentation instead of convergence across the EU. The evolving regulatory acquis of the EU, coupled with insufficient cooperation and stalled trade agreements, poses risks beyond its borders. The EU’s paradigm shift towards autonomy contributes to global regulatory spirals and protectionist measures, particularly evident in services trade. Despite the EU’s historical commitment to harmonisation and liberalisation, many sectors, such as transport and logistics, telecoms, and digital services, have witnessed the imposition of new laws and rules that hinder trade. With the EU’s share of global GDP expected to decrease to 9% by 2050, there is a critical need for EU governments to enhance its regulatory capabilities and foster innovation. To wield influence in global economic diplomacy, EU policymakers must prioritise policies that unleash the collective ingenuity of individuals and businesses that help to maintain high levels of productivity, competitiveness, and prosperity.
Topic:: Globalization, European Union, Economy, Autonomy, Protectionism, and WTO
Political Geography:: Europe

75. German Industrial Competitiveness and the Metaverse

Author:: Hosuk Lee-Makiyama and Robert Baker
Publication Date:: 02-2024
Content Type:: Working Paper
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: The metaverse is the next iteration of the internet as an immersive, 3D, virtual, shared world where activities can be carried out with the help of extended reality services. But it is much more than headsets and virtual games. The metaverse is increasingly conceptualised in tandem with other advanced technologies, including AI, IoT, automation, and blockchain. Combined, these Industrie 4.0 innovations will be at the centre of German productivity growth over the next decade. The IMF and the OECD both expect Germany to be the worst-performing leading economy in the world in 2023. Beyond recent shocks, German competitiveness is being “steadily eroded” by structural factors like “rising labour costs and a lack of digitisation” (Arnold, 2023). In this context of sclerotic growth, immersive technologies show much promise. The economic dimension of the new Digital Strategy should be guided by three simple “I’s” – immersive, industrial productivity, and internationalisation of German technologies. Specifically, the metaverse is driving productivity gains in manufacturing, engineering, financial services and retail – it could add €71 billion to German GDP by 2035. As well as enhancing the productivity of existing operations, immersive technologies and smart factories can enable the reshoring of profitable activities back to the German economy, particularly in technology and engineering. But these economic gains are not inevitable. Neglecting immersive technologies would have a significant effect on Germany’s remaining competitive advantages. For example, late adoption of the metaverse and digital twins by the German auto industry would lead to a 10% loss in exports, equating to more than €12 billion each year. The costs of late adoption are only underscored by the current salience of global competition. US firms have a strong track record of successfully integrating internet products into industry, while China and its own technology giants are developing strategic initiatives to capitalise on the metaverse. While much of the metaverse remains under development, companies are already showcasing a range of commercial partnerships and innovative use cases. German companies like Siemens are at the forefront of digital twins which allow automakers and other manufactures to replicate their physical facilities in virtual worlds, drawing on real-time data and simulations to optimise their operations. In insurance, the same digital twins are facilitating underwriting and expedited claims via remote monitoring. Meanwhile, in medical devices and healthcare, a metaverse of medical technology and AI (MeTAI) is facilitating the refinement of AI-based medical practices. This is the future of medical imaging technology, diagnosis, and therapy.
Topic:: European Union, Digital Economy, Industry, and Competition
Political Geography:: Europe and Germany

76. Calling on the EU-US Trade and Technology Council: How to Deliver for the Planet and the Economy

Author:: Oscar Guinea, Vanika Sharma, Philipp Lamprecht, Dyuti Pandya, and Oscar du Roy
Publication Date:: 02-2024
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: This Policy Brief proposes the establishment of an agreement on conformity assessment between the EU and the US that covers machinery and electrical equipment. The initiative aims to increase the number of European and US conformity assessment bodies authorized to test and certify EU and US machinery and electrical equipment for exports into each other’s markets, without recognizing the equivalency or otherwise altering the product requirements in regulation, standards, or other normative documents on either side. While this study focuses on the economic effects of an agreement on conformity assessment that includes machinery and electrical equipment, the scope of such an agreement could potentially be extended to several additional product categories, particularly those that are subject to requirements for mandatory third-party conformity assessment in both the EU and the US. The increase in the number of conformity assessment bodies is expected to reduce the costs and the time required to demonstrate conformity. If this policy succeeds as expected in achieving a reduction in trade costs between 2 and 6 percent, US exports to the EU are projected to increase between US$ 11 billion and US$ 32.5 billion while EU exports to the US are estimated to grow by between US$ 13.8 billion and US$ 42.2 billion. In percentage terms, US firms are anticipated to experience a larger increase in exports of machinery and electrical equipment than their EU counterparts. The increase in trade flows as a result of this agreement is estimated to be larger than the rise in trade flows achieved in other Free Trade Agreements signed by the EU or the US. Moreover, as an increasing number of EU regulations begin to mandate third-party conformity assessment, US firms will increasingly benefit from this agreement when exporting to the EU. Given China’s status as the largest supplier of machinery and electrical equipment to both the EU and the US, the implementation of an EU-US agreement on conformity assessment would not only improve conditions for transatlantic trade but also lead to reduced trade dependence for the EU and the US on China. The reduction in trade costs between the EU and the US on machinery and electrical equipment due to the agreement could lower Chinese exports to the EU and the US by between US$ 6.5 billion and US$ 19.4 billion. Importantly, machinery and electrical equipment are crucial inputs for some of the key technologies in which the EU and the US Administrations have identified trade dependencies on China. However, in contrast with other policies aimed at reducing reliance on Chinese imports, an agreement on conformity assessment for machinery and electrical equipment will not require public subsidies or impose any financial burden on taxpayers. This agreement also has the potential to benefit the environment. Machinery and electrical equipment are essential inputs for green technologies. Therefore, a reduction in the cost and time of conformity assessment in these industries will accelerate the adoption of green technologies. An agreement on conformity assessment between the EU and the US covering green goods and clean technologies could increase transatlantic exports between US$ 3.1 billion and US$ 9.2 billion. While this increase in exports is significant, broadening the scope of the agreement to include the entirety of machinery and electrical equipment, rather than just a subset, is projected to lead to trade effects eight times larger. Moreover, as green technologies rapidly evolve, an agreement on conformity assessment has the potential to serve as a dynamic instrument that evolves to accommodate future regulatory and economic developments on climate and the environment on both sides of the Atlantic.
Topic:: Science and Technology, European Union, Economy, and Trade
Political Geography:: Europe, North America, and United States of America

77. Openness as Strength: The Win-Win in EU-US Digital Services Trade

Author:: Matthias Bauer, Dyuti Pandya, and Oscar du Roy
Publication Date:: 03-2024
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: The discourse surrounding the EU’s supposed over-reliance on digital services imports from non-EU countries, particularly the US, has been a recurrent topic among some political circles. However, this viewpoint tends to oversimplify and misrepresent the nuanced and complex reality of the EU’s status within the global Information and Communication Technology (ICT) sector and digitally enabled trade. A thorough analysis of trade data and trends clearly illustrates that the EU’s engagement with foreign (non-EU) digital services, notably from the US, represents a strategic economic advantage, bolstering Europe’s competitiveness and fostering productivity growth. Below we underline the critical importance of openness to foreign innovation and technology diffusion for the EU’s economic future.
Topic:: European Union, Digital Economy, Strategic Competition, Imports, and Productivity
Political Geography:: Europe, North America, and United States of America

78. ICT Beyond Borders: The Integral Role of US Tech in Europe’s Digital Economy

Author:: Matthias Bauer and Dyuti Pandya
Publication Date:: 03-2024
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: Contrary to political assertions about the vulnerability of digital services provided by non-EU companies, the strong presence and sunk costs associated with US tech companies’ investments in data centres, skilled workforce development, and research facilities in Europe act as significant barriers to exit, highlighting the inherent symbiosis between US tech investments and Europe’s digital and non-digital sectors. These investments underscore a mutual inter-dependency that strengthens European economies, making the notion of “sudden cessation” of digital services by US companies implausible. Corporate data show a significant investment gap of approximately USD 1.36 trillion between US and EU ICT companies, attributing a competitive edge to US firms due to their heavy investment in ICT, cloud solutions, and R&D. Forecasted increases in ICT investments by US corporations outline a benchmark beyond reach for EU businesses. The notion of EU firms aligning with this growth path is rather fantastical, as it would call for immense government investment, ultimately draining financial resources from essential public services, such as healthcare, housing, and environmental policies. Substantial ICT investments across EU Member States together with a long-term commitment to the European market present an opportunity for the EU to leverage US continuous technological advancements, underscoring the potential for transatlantic collaboration to drive the EU’s digital transformation and innovation. EU-US partnerships not only fuel the EU’s digital transformation but also align with shared political values, reinforcing the significance of transatlantic collaboration in shaping a competitive and innovative digital future.
Topic:: Communications, European Union, Digital Economy, Investment, and Information Technology
Political Geography:: Europe, North America, and United States of America

79. Time to Rethink Export Controls for Strengthened US-EU Cooperation and Global Trade Rules

Author:: Matthias Bauer and Dyuti Pandya
Publication Date:: 04-2024
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: The escalation of broad export controls by the US, under the guise of national security and the aim to curb technological transfers to potential adversaries,[1] marks a new epoch of bureaucratic oversight. The US push for broad export controls also underscores a critical juncture in US-EU relations and global trade rules. Broad export restrictions not only challenge the very foundation of free trade but also contribute to the erosion of Western technology leadership.[2] Unilateral export controls may start strong but eventually lose effectiveness and become counterproductive,[3] pushing non-US companies, particularly in the semiconductor sector, to find alternatives to US components.
Topic:: International Cooperation, European Union, Regulation, Exports, Trade, and Semiconductors
Political Geography:: Europe and United States of America

80. Trading Up: An EU Trade Policy for Better Market Access and Resilient Sourcing

Author:: Fredrik Erixon, Oscar Guinea, Philipp Lamprecht, Oscar du Roy, Elena Sisto, and Renata Zilli
Publication Date:: 05-2024
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: Europe’s competitiveness could be substantially improved by a trade policy that facilitates more trade and other forms of cross-border exchange. The evidence is clear: the EU trades less with the rest of the world than would be expected given the size of its economy. With 85 percent of global growth happening outside of the EU – and with an increasing share of all new technologies, innovations, patents, human capital, and R&D expenditure emerging in other parts of the world than Europe – the EU needs to find better ways to integrate with international markets. It is now becoming urgent for the EU to revive its international trade policy. Europe’s increasing detachment from global markets lead to two major economic concerns: deteriorating market access and less capability to build economic resilience. Market access can be defined as an export challenge, as EU firms face increasing trade barriers that hinder their ability to sell products and services abroad. These barriers ultimately limit the EU’s ability to scale up production, specialise, and increase R&D spending. Economic resilience is an import challenge. To become more resilient, the EU must diversify its sources of supply, particularly for critical raw materials, and secure a stable and frictionless access to foreign high-end goods, services, and technologies. The next five years present a critical opportunity for the EU to address the challenges limiting the contribution of international trade to EU’s competitiveness. This Policy Brief outlines seven trade policy recommendations that tackle the lack of market access and address the need for economic resilience. These policy recommendations are there for the EU to take: they are realistic and achievable. The EU has the power to make these seven policy recommendations a reality.
Topic:: Markets, Treaties and Agreements, European Union, Trade, and Resilience
Political Geography:: Europe

81. Keeping Up with the US: Why Europe’s Productivity Is Falling Behind

Author:: Fredrik Erixon, Oscar Guinea, and Oscar du Roy
Publication Date:: 05-2024
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: The European Union stands at a crossroads. For decades, the EU’s productivity growth has consistently lagged the United States, leading to slower growth in living standards and decline in global economic power. While short-term factors like the strong US fiscal expansion have widened the gap in nominal GDP growth in recent years, the fact is that Europe has trailed the US economic development for several decades and the root of the problem lies in deeper structural issues within the European economy. Four major forces fuel this productivity divide. Firstly, the EU’s investment in research and development (R&D) pales in comparison to the U.S., leading to fewer patents and a slower pace of technology-fuelled innovation. Secondly, Europe trails America in the stock and growth of intangible capital investments, which are crucial for adopting and diffusing new technologies that drive productivity. Thirdly, the EU market exhibits slower business creation and destruction compared to the US. This rigidity hinders the flow of resources towards the most productive firms. Lastly, despite boasting higher levels of trade openness, the EU attracts less Foreign Direct Investment (FDI) than the US, curbing its access to cutting-edge global technologies and expertise. To close the gap, European policymakers should implement a comprehensive strategy for faster productivity growth. The first step is turning up the dial on R&D spending, targeting 4-5 percent of GDP by 2040. Next, Europe should prioritise investments in intangible assets and lay down the digital infrastructure that will underpin future growth. Revitalising the single market is also crucial: reducing internal and external market barriers for services, the primary vehicle for trading intangible assets. Moreover, the EU should foster a market environment that encourages entrepreneurship and facilitate the entry and exit of firms so resources cascade towards the most productive sectors. By harnessing the strengths of the single market and implementing these recommendations, European policymakers can propel the EU towards a more competitive and prosperous future.
Topic:: Markets, European Union, Productivity, and Economic Competition
Political Geography:: Europe, North America, and United States of America

82. Trade in the Great Sea: A Brief State of Play of EU-Southern Neighbourhood Trade Relations

Author:: Jan A. Micallef
Publication Date:: 05-2024
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: The Mediterranean is a vibrant economic geography that could grow significantly. This paper reviews the trade relations between the EU and Southern Neighbourhood Countries (SNCs) – their history and the current status of the bilateral trade agreements. While these agreements have many similarities, there are also some differences in scale and scope. The paper also looks at the development of trade between the EU and SNCs and concludes that developments have generally been positive.
Topic:: Treaties and Agreements, Bilateral Relations, European Union, and Trade
Political Geography:: Europe and Mediterranean

83. The EU’s Trillion Dollar Gap in ICT and Cloud Computing Capacities: The Case for a New Approach to Cloud Policy

Author:: Matthias Bauer, Fredrik Erixon, and Dyuti Pandya
Publication Date:: 05-2024
Content Type:: Working Paper
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: An inward-looking EU approach to cloud computing and data policies risks stifling innovation and competitiveness by promoting domestic champions at the expense of accessing global cloud capabilities. Limiting market diversity and access to best-in-breed solutions could hinder digital transformation across sectors, raising costs and constraining growth opportunities. By contrast, a free trade approach to cloud offer guardrails and security but champions non-discriminatory cross-border and regulatory policies, yielding economic advantages by stimulating investments, fostering innovation, and enhancing competition. Unfortunately, some EU policymakers envision Europe building an independent ICT infrastructure, exemplified by initiatives like the European Alliance on Industrial Data, Edge and Cloud. This approach prioritises technological sovereignty, aiming not just to maintain European control over critical infrastructure and data but favouring localisation policies, including in AI and quantum computing. However, the approach is simply not going to work because the amount of resources that are needed for “pure-EU firms” to rise up as significant competitors to global leaders is so large that it would drain other sectors of investments and human capital. The investment gap between the EU and the US in ICT and cloud-related sectors, totalling some USD 1.36 trillion, presents a significant challenge for native European companies. To catch up by 2030, 2040, and 2050, European technology companies would need to substantially increase annual investments, ranging from approximately USD 157 billion to USD 1.2 trillion annually, representing 0.8 percent to 6.4 percent of the EU’s GDP. This would – hypothetically – require a significant commitment of resources. Despite recent efforts such as state aid for R&D in cloud and edge computing, the scale of investment needed far exceeds the current levels, underscoring the urgency for an open and non-discriminatory EU policy approach to bolster Europe’s position in the rapidly growing and technologically changing digital landscape. There are different components to a successful cloud policy, including policies to spur adoption and cross-border cloud integration in the EU, and more investment in R&D. EU policymakers should adopt a dynamic perspective rather than fixating on static market shares, and pursue policies that prioritise innovation and technological advancement over merely seeking to catch up on current technologies. The cloud market and the broader Internet market are going through rapid changes, leading to new services and new competition. A future-oriented approach to cloud policy advocates for policies that foster competition, drive technological progress, and enable interoperability, all of which align with the dynamic nature of cloud services and global markets.
Topic:: Communications, European Union, Digital Economy, Cloud Computing, and Information Technology
Political Geography:: Europe

84. Reinventing Europe’s Single Market: A Way Forward to Align Ideals and Action

Author:: Matthias Bauer, Dyuti Pandya, Vanika Sharma, and Elena Sisto
Publication Date:: 06-2024
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: It is essential for EU institutions and Member State governments to shift their focus from the abstract concept of the “Single Market” to the concrete objective of “legal harmonisation in the EU.” This transition represents a strategic realignment towards more pragmatic policymaking. Adopting a 28th regime to address national regulation discrepancies would align with this goal and enhance the Single Market’s effectiveness in promoting economic growth and competitiveness. Given the EU’s ongoing loss of relative global economic clout, it is crucial to establish an ambitious timeline for implementing the most critical Single Market reforms. The Letta Report serves as a wake-up call to revitalise the EU’s Single Market, emphasising the need for decisive action. Its vision largely hinges on legal harmonisation within Europe, building on early efforts to liberalise markets and establish a truly integrated European market. Despite efforts, “integration fatigue” remains a significant challenge due to legal fragmentation across European economies. Previous reports, from the Cecchini Report in 1992 to the Europe 2020 Strategy, have highlighted persistent issues like regulatory divergences and declining political support for market integration. Despite numerous proposals, progress has been limited, and many challenges persist or have worsened (see Section 2). An analysis of EU reports reveals a shift in policy priorities over time. Initially, there was a strong focus on liberalisation and market opening, with less attention given to state aid and industrial policymaking. The Letta Report highlights the importance of regulatory convergence and harmonisation, reflecting a deeper understanding and recognition of the drivers of EU competitiveness. The rise of nationalism and a shift towards “Strategic Autonomy” within the EU have hindered crucial market reforms. This highlights the importance of aligning laws across Member States to strengthen and reinforce EU’s economic resilience and international competitiveness (see Section 3). EU institutions and Member State governments should set specific goals for “legal harmonisation in the EU.” This shift would address real challenges faced by businesses and citizens, and build political will for necessary reforms. Prioritising legal harmonisation would enhance internal cohesion and align national laws with Union-wide goals. An actionable roadmap – potentially with a 2028 deadline – is crucial to address the substantial gap between ambitious EU strategies and Europe’s economic realities. (see Section 4). Implementing sector-specific and horizontal policies in a new regulatory regime would improve cross-border operations and competitiveness. The Letta Report advocates for a European Code of Business Law to establish a unified regulatory framework, introducing a 28th legal regime to address national regulation discrepancies. Extending this regime to include tax and labour market policies would significantly enhance cross-border operations. The EU and Member State governments can eliminate substantial internal barriers by prioritising key horizontal policies affecting all businesses, such as fragmented tax laws, labour market policies, and social security systems. Simplifying and harmonising these policies on the basis of the facilitation of four freedoms is crucial for unlocking the Single Market’s potential for businesses and workers, boosting the EU’s global competitiveness. Allowing coalitions of willing countries to advance in certain areas of legal integration provides a viable solution to the long-standing Single Market “fatigue”. By enabling smaller groups of Member States to pursue integration in specific areas, the EU can bypass the constraints imposed by rigid voting requirements and achieve greater agility, accountability, and acceptance in EU law-making. This approach not only fosters flexibility but also upholds the fundamental principles and objectives of the EU. To ensure the integrity of the EU legal order and prevent unjustified barriers or discrimination against non-participating members, it is essential to establish safeguards and oversight mechanisms. These measures would maintain cohesion within the Union while allowing for progressive legal integration among willing Member States.
Topic:: Markets, European Union, Digital Economy, and Economic Integration
Political Geography:: Europe

85. What if…? 12 Dragon King scenarios for 2028

Author:: Florence Gaub
Publication Date:: 03-2024
Content Type:: Special Report
Institution:: NATO Defense College
Abstract:: At first glance, this publication appears to be a collection of Early Warning essays – they are, to some extent, but they should not be exclusively read as such. Conventional Early Warning systems have a much shorter time horizon – normally hours, perhaps months at most – than these scenarios, and they are solely mitigation mechanisms, that is to say they provide no insight into how the event they are warning of can be avoided. They are thus not an intellectual thought exercise, but solely an alarm bell. Our Dragon Kings in this volume provide insight into how they can be avoided, but they also challenge our assumptions in more ways than one. They are therefore awareness-raisers no matter how credible or plausible you will find them. Just reading them will have a readiness-increasing effect. (In fact, the more absurd you find them, the more pronounced this is because your mind will learn more when the emotion they generate is greater.) These scenarios can become even more useful, however, if you use them for simulation exercises in a team. You can use them as a blueprint for a wider scenario exercise, whether one wishes to adopt a blue or red team approach to them, and ask questions such as: how could this have been prevented, what would have to be done? What are alternative pathways of this scenario that are even worse, and how can we prevent those? The most important aspect is that every exercise of this kind must lead to some concrete policy steps. Merely thinking about improbable futures is never enough – doing something about them is what makes them a useful policy-tool. In that case, they lead to active, rather than passive, engagement with the content, foster collaboration, encourage innovation, practice decision-making, provide a space for failure and experimentation with alternative courses of action. It is precisely because of this that scenarios are a common feature in military education, but they work just as well in any other strategic context – provided, time and space is made for it. If yes, they contribute to increasing preparedness and readiness, and accelerate the response time to surprise. What’s more, generally engaging in fringe thinking about the future will strengthen these capabilities no matter what kind of surprise eventually occurs. Much like how vaccines teach the immune system, disruptive thinking strengthens our neural networks, making us more resilient for extreme situations.
Topic:: NATO, Natural Disasters, Elections, Crisis Management, Coup, UN Security Council, Biological Weapons, Resilience, Arctic Council, and Readiness
Political Geography:: Russia, China, Iraq, Europe, India, Taiwan, Latin America, Nigeria, and Tunisia

86. Fly me to the moon: Why Europe needs to move into space

Author:: Samantha Cristoforetti and Alessandro Marrone
Publication Date:: 06-2024
Content Type:: Special Report
Institution:: NATO Defense College
Abstract:: Outer space is experiencing a paradigm shift from exploration to exploitation, whereby orbits become more congested and contested than ever. NATO militaries are adapting not only to integrate space in military operations on Earth but also to operate in this domain. U.S. is leading the spacepower doctrinal evolution, while Europe holds important space capabilities but lags behind in certain key areas. Human space transportation is the new frontier that Europeans should address through civil-military cooperation.
Topic:: NATO, Space, Civil-Military Relations, and Military
Political Geography:: Europe and Space

87. How to write a strategy

Author:: Christopher M. Schnaubelt
Publication Date:: 06-2024
Content Type:: Special Report
Institution:: NATO Defense College
Abstract:: Writing a strategy is difficult because the purpose is to change the behavior of humans. The most common context for strategy is in the sphere of military activities: how to apply force in a manner that breaks the will of an enemy, causing that enemy to stop fighting. However, strategy can also be useful at less intense levels of conflict such as crisis management and stability operations. Indeed, strategy can be used for peaceful but competitive purposes such as government tax policy or corporate marketing of consumer products. This paper expresses strategy as a formula: Strategy = Ends + Ways + Means + Risk wherein Ends are the objectives or the “what” the strategy intends to accomplish; Ways are the strategic concepts/courses of action or the “how” that describes the methods of applying the means to attain the ends; and Means are the resources. Risk is the degree to which the Ends exceed the Ways + Means. The following steps should be used to write a strategy. They may be performed in a different order. In most cases, some of the steps will be repeated during the development process: • Estimate the development timeline: determine the deadlines for writing the strategy. • Develop understanding: gather information and relate it to conditions and actors. • Frame the problem( s) and opportunities: determine what is the question or problem to be solved. Questions should address internal context for the strategy development process as well as the external problem context. • Draft proposed ends: envision what is to be accomplished. • Determine the ways and means: compare the contemporary problem frame with the vision of what should be achieved, ascertain the set of resources that are currently available (or can reasonably be made available within the necessary time frame), and identify how these resources can be applied to produce the desired end state. • Consider risk: assess whether the ends, ways, and means are in sustainable balance. The degree to which the perceived cost of Ways + Means exceeds the perceived value of the Ends is Risk. • Reframe the problem: consider the likely evolution of the situation in light of proposed actions. • Finalize the statement of Ends, Means, and Ways: write the strategy using the steps in this list as an outline. • Monitor strategy implementation and effect; revise as necessary: assess whether the strategy is being properly implemented, is producing the expected effects, and progressing adequately towards the desired ends. If not, revise the strategy or the plans and/or activities that implement the strategy.
Topic:: NATO, Military Affairs, and Crisis Management
Political Geography:: Europe and North America

88. Float like a butterfly, sting like a bee* How Allies adapt to drones

Author:: Brian R. Miletich
Publication Date:: 05-2024
Content Type:: Special Report
Institution:: NATO Defense College
Abstract:: Drone proliferation and technological advancements in contemporary confl ict represent an evolutionary trend. Despite the growing scope and scale as a combat multiplier, drones have not yet changed the character of war. Drones are part of a broader evolutionary trend in military technology for three reasons: drones fail to achieve decisive eff ects on the battlefi eld, are vulnerable to basic adaption, and do not profoundly change existing military doctrine. The article recommends three policy provisions within NATO’s strategic construct that will help NATO meet the challenges proposed by drones. While technology alone is often insuffi cient to generate a Revolution in Military Aff airs (RMA), a new warfi ghting approach such as Multi Domain Operations (MDO) must be implemented to seize the opportunities presented by drones.
Topic:: NATO, Military Affairs, Weapons, and Drones
Political Geography:: Europe and North America

89. The new NATO Force Model: ready for launch?

Author:: John R. Deni
Publication Date:: 05-2024
Content Type:: Special Report
Institution:: NATO Defense College
Abstract:: NATO Allies are in the process of a dramatic change to the Alliance’s force structure, which will see the NATO Response Force (NRF) replaced with a threetiered structure of Allied forces, to include an Allied Reaction Force (ARF), all of which is designed to better defend and deter. This new NATO Force Model faces a variety of challenges, from whether Allies will have suffi cient forces at appropriate readiness levels to fulfi l their own objectives to whether SACEUR will still have the authority to “alert, stage and prepare” Allied forces as a crisis emerges, through whether and how the Alliance’s command structure now needs a re-examination as well. To avoid the potential pitfalls and ensure the Alliance fulfi ls its own vision, NATO and its member nations ought to consider an array of mitigating steps, such as using snap exercises and inspection visits to ensure forces are indeed manned, trained and equipped, and emphasizing mass and capacity in Allied acquisition plans and capability targets.
Topic:: Defense Policy, NATO, Alliance, and Force Model
Political Geography:: Europe and North America

90. NATO 2099: The science fiction anthology

Author:: Florence Gaub
Publication Date:: 04-2024
Content Type:: Special Report
Institution:: NATO Defense College
Abstract:: N ATO is a fundamentally future-oriented organization: the entire North Atlantic Treaty is written in the future tense. The word “will” appears ten times, the word “shall” even fifteen times. And yet, it features very little in the genre that is dedicated to all things future, science fiction. In the 75 years since its inception, the Alliance has appeared in just six films and five books, with most of these not even strictly science fiction. To some, this does not matter: they equate science fiction with fantasy, a realm of the impossible. But to others, it does: science fiction has a knack for detecting trends, imagining the rare, extrapolating consequences, and sparking important debates about what is to come. It is precisely this quality that makes science fiction useful for security and defence purposes. In part, this is because science fiction often focuses on technology, projecting innovations such as sliding doors, mobile phones and tablets (Star Trek 1966 - 1969), Virtual Reality (The Matrix 1999), and space travel (Francis Godwin, Cyrano de Bergerac, Johannes Kepler in the 17th century). But it also asks moral questions about the implications of these innovations, such as Mary Shelley’s Frankenstein (1818), Isaac Azimov’s I, Robot (1950) or Aldous Huxley’s Brave New World (1931). Science fiction can also have a warning effect, highlighting were things might go wrong in the political sense, whether it is 1984 warning of a totalitarian society or Snow Crash (1992) showcasing the effects of excess capitalism on democracy. For military purposes, science fiction can imagine conflicts precisely in order to prevent or mitigate them. Since the late 19th century, authors have used this genre to anticipate and prepare for conflicts to come, with George Chesney’s The Battle of Dorking (1871) being one of the first of this kind, describing an invasion of Britain by a German-speaking country, including the destruction of the Royal Navy by a futuristic wonder-weapon (“fatal engines”). H.G. Wells’s The Land Ironclads (1903) in turn featured tank-like armoured fighting vehicles.1 It is for this reason that science fiction has been used repeatedly by military organizations. In the 1980s, US President Ronald Reagan’s Strategic Defense Initiative was influenced by science fiction material, and Ghost Fleet (2015) was said by then SACEUR Admiral James Stavridis to be “a startling blueprint for the wars of the future and therefore needs to be read now!” But the military has not just used existing science fiction, but also used the genre to develop its own thinking, be it in the United States – such as the US Army TRADOC Mad Scientist Initiative which produced Science Fiction: Visioning the Future of Warfare 2030-2050 (2016) – or in France, where the project La Red Team hires science fiction authors to imagine what future opponents might think and do.2 Similar initiatives are also underway in the United Kingdom and Germany. Of course, imagining the future of NATO is a much bigger task than solely imagining the future of conflict, and perhaps this explains why the Alliance features little in regular science fiction. While NATO might be about defence, it is first and foremost a political enterprise, a promise for the future. Envisioning what challenges it will face and overcome, how it will adapt to a changing political, technological and even physical environment and maintain unity makes for a much bigger task than coming up with a new weapon that could change everything. And this is precisely what we asked the authors in this volume to do 75 years after NATO was born: imagine what it will look like 75 years from now, in 2099.
Topic:: NATO, Future, and Science Fiction
Political Geography:: Europe and North America

91. Towards Meaningful Human Rights Impact Assessments: From supermarket commitments to best practice action

Author:: Eline Achterberg
Publication Date:: 01-2024
Content Type:: Working Paper
Institution:: Oxfam Publishing
Abstract:: This discussion paper focuses on the commitments that Dutch, German and UK supermarkets made as part of the Behind the Barcodes campaign to conduct human rights impact assessments (HRIAs). To understand whether supermarkets are meaningfully implementing those commitments and to support learning, this paper analyses the HRIAs that supermarkets have published in the past four years and identifies best practice efforts and points of improvement. Oxfam also outlines key recommendations for supermarkets and other food companies to improve HRIA processes to ensure that the rights of people making our food are better protected and respected.
Topic:: Human Rights, Food, Labor Rights, and Supply Chains
Political Geography:: Europe

92. Two Years at the Forefront: Exploring the needs and experiences of women-led, women’s rights and LGBTQIA+ led organizations two years into the Ukraine humanitarian response

Author:: Charlotte Greener
Publication Date:: 02-2024
Content Type:: Policy Brief
Institution:: Oxfam Publishing
Abstract:: Two years on from the escalation of the war in Ukraine, Oxfam spoke with a number of people leading the work of local and national women-led organisations (WLOs), women’s rights organisations (WROs), LGBTQIA+ led organizations, and other local non-governmental organizations (NGOs) addressing the needs of women, girls and gender minorities in Poland and Ukraine. We wanted to understand how the humanitarian crisis has impacted them, personally and as organizations, and their needs and priorities for the future. At the beginning of the humanitarian crisis following the escalation of the war in Ukraine, local WLOs, WROs and LGBTQIA+ led organizations were some of the first on the ground responding to their communities’ needs, both within Ukraine and in neighboring countries, and two years on, they are still at the forefront of providing assistance. The conversations that we had with these organisations highlighted that they are facing key challenges in continuing to sustain their vital role in responding to humanitarian needs; the need for greater investment in their voice and agency as decision-makers in the humanitarian response; and the need for flexible support to these organisations that allows them to carry out their important work across all stages of the response to the humanitarian crisis.
Topic:: Human Rights, Women, Refugees, LGBT+, Humanitarian Crisis, Civil Society Organizations, Gender, and Humanitarian Response
Political Geography:: Europe, Ukraine, and Poland

93. Essential but Invisible and Exploited: A literature review of migrant workers’ experiences in European agriculture

Author:: Carlos Ruiz-Ramírez, Juan Castillo-Rojas-Marcos, and Yoan Molinero-Gerbeau
Publication Date:: 06-2024
Content Type:: Special Report
Institution:: Oxfam Publishing
Abstract:: This report – derived from work implemented by Oxfam Intermón and the University Institute for Studies on Migration (IUEM) of Comillas University in the EU SafeHabitus project – is based on a review of academic and non-academic literature from the past five years. It assesses research on working, living, health and transport conditions for migrants working in the agri-food sector in Europe, and cross-cutting gender issues.
Topic:: Agriculture, Food, European Union, Migrant Workers, Supply Chains, Equity, Production, and Gender
Political Geography:: Europe

94. The EU Tobacco Tax Structure: Impact on Prices, Revenues, and Smoking Patterns

Author:: Oxford Economics
Publication Date:: 05-2024
Content Type:: Special Report
Institution:: Oxford Economics
Abstract:: Multilateral organisations such as the World Bank and the IMF have made the argument that specific excise taxes for cigarette taxation can provide significant benefits over ad valorem excise taxes. Chief among the benefits they identify are: more stable and predictable government excise tax receipts; a lower administrative burden for tax management and collection; and internalising the externalities produced by cigarette consumption. Across the EU, Member States have been restructuring their excise tax systems to create an increasingly prominent role for specific excise taxes. Between 2010 and 2023, authorities in the EU opted to rebalance towards specific excise and away from ad valorem excise, with the average ad valorem rate across Member States falling from 36.7% to 27.0% of retail selling price (RSP). As a result, in this period the average specific excise burden across the EU increased from 30.9% to 44.5% of total taxation. However, this shift has not been uniform across Member States and the approach to cigarette taxation has diverged. Countries like Denmark and Sweden have moved to an almost total reliance on specific excise taxes. Meanwhile in some Member States such as Italy and Spain, the share of specific excise tax in total taxation has remained very low. In this study, we examine the experience of eight EU Member States that have all taken differing approaches to cigarette excise policy in recent years. In four countries that have rebalanced to achieve a higher proportional use of specific excise taxes since 2010, we found excise tax receipts to have remained stable or increased, despite flat or falling rates of legal consumption. In four countries that have not significantly rebalanced towards specific excise taxes, the results were more mixed. Italy and Spain, notably, have seen a decline in their cigarette excise tax receipts over the period, despite below-average declines in cigarette consumption. Ad valorem-based excise tax systems do not provide as strong an incentive for manufacturers to raise prices as a specific excise-based system would. In addition, ad valorem dominated excise tax systems can encourage downward substitution from consumers for cheaper alternatives, exacerbating the decline in excise tax receipts.
Topic:: Economics, European Union, Tax Systems, Tobacco, Price, and Revenue
Political Geography:: Europe

95. The Environmental Impact of Digital Over Cash Payments in Europe

Author:: Jan Sun, Hannah Zick, and Johanna Neuhoff
Publication Date:: 06-2024
Content Type:: Special Report
Institution:: Oxford Economics
Abstract:: On behalf of the European Digital Payment Industry Alliance (EDPIA), our report on “The Environmental Impact of Digital over Cash Payments in Europe” seeks to evaluate carbon emissions across payment systems at point of sales. Businesses and governments are becoming more and more focused on mitigating the effects of climate change through processes and policies, and the payment sector is no exception. As digital payments become more prevalent—with the number of non-cash payments doubling from 21% in 2016 to 41% in 2022 in the euro-area alone according to the European Central Bank—there has been a growing need to understand the environmental effects of these shifting preferences. Although some evidence indicates that digital payments have a smaller environmental footprint than cash payments, there has not been a comparative lifecycle assessment done between the two of them. In addition, given large differences across geographies, the actual impacts of payment methods at points of sales (POS) can differ widely from country to country. To examine this issue, this study utilises a Life-Cycle Assessment (LCA) following the International Organization for Standardization (ISO) guidelines. A method Oxford Economics has added to its toolkit, the LCA is a holistic approach that appraises environmental impacts across stages of a product lifecycle on a variety of categories. Which, in this case, includes a total of different 18 categories including for example, global warming potential, mineral resource scarcity, and ionizing radiation. This cradle-to-grave approach is used for three purposes: Firstly, to consider the separate processes of cash and non-cash payments in order to isolate the environmental “hotspots” and their respective impacts. Secondly, to understand the processes in three countries with different rates of payment adoption—Italy, Germany, and Finland—for comprehensive results. Thirdly, to compare the environmental impact of cash and non-cash payments at point of sales in the different impact categories.
Topic:: Climate Change, Economics, Carbon Emissions, Radiation, and Digital Payments
Political Geography:: Europe, Finland, Germany, and Italy

96. The Security Side of Gulf Visions. Adapting Defence to the Connectivity Age

Author:: Eleanora Ardemagni
Publication Date:: 03-2024
Content Type:: Special Report
Institution:: Italian Institute for International Political Studies (ISPI)
Abstract:: The GCC states are adapting defence strategies to the challenges raised by their “Visions”, their post-hydrocarbon national plans. Far from being just economic programmes, the Visions are broad national transformation platforms displaying also a security dimension, and with many security implications. New cities and industrial poles, infrastructures, mega events and tourism raise unprecedented security risks, at which the GCC states are answering through a combination of economic-oriented foreign policy, multipolar international alliances, and ambitions towards “defense autonomisation”. What are the Visions’ security dimensions and implications, and how does the post-oil path affect and reshape foreign policies? This Report analyses how GCC states are adapting deterrence and defence tools to the connectivity age, navigating a troubled neighbourhood of both conventional and asymmetric threats. In a central but more vulnerable Gulf, how may the EU and NATO accommodate transformations in GCC states’ defense policies, postures, and means, to support their own security?
Topic:: Security, Foreign Policy, Defense Policy, Gulf Cooperation Council, and Strategic Planning
Political Geography:: Europe, Middle East, India, Saudi Arabia, Qatar, United Arab Emirates, United States of America, and Gulf Nations

97. The Sky Is Not the Limit. Geopolitics and Economics of the New Space Race

Author:: Alessandro Gili
Publication Date:: 01-2024
Content Type:: Special Report
Institution:: Italian Institute for International Political Studies (ISPI)
Abstract:: Space is a contested domain for its very nature and today it is evidently becoming an increasingly important enabler of economic and military power. An increasing number of actors, infrastructures and technologies deployed in space also raises concerns for safety and security, especially in cyberspace. Many countries are striving to achieve space capabilities and autonomous access to space, and this is having a tremendous geopolitical impact, especially since space is emerging as an increasingly critical military and strategic domain. The development of the new space economy, which is increasingly involving the private sector and many industrial actors and services, will also be a game changer for the international economy. The space race likewise implies disruptive technologies that could contribute massively to the energy and digital transitions, accelerating solutions that could benefit humanity. A new international governance system for space is therefore needed urgently, considering that the current rules are no longer able to respond to a sector evolving at such a rapid pace. Which actors are leading the race? Which economic sectors could benefit the most and what could the new space economy mean for the world? How is space emerging as a military domain against a backdrop of increasing international tensions? What would a new system of global governance for space look like?
Topic:: Economics, Politics, Infrastructure, Geopolitics, Regulation, and Energy Security
Political Geography:: Russia, China, Europe, India, Italy, Global Focus, United States of America, and Space

98. The changing dynamics of European electricity markets and the supply-demand mismatch risk

Author:: Conall Heussaff and Georg Zachmann
Publication Date:: 07-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: Meeting Europe’s 2030 climate targets will require massive clean-electricity investment. To facilitate these investments, state-backed de-risking schemes such as contracts for difference (CfDs) are needed. Their role in supporting renewables has been consolidated by the European Union’s recently agreed electricity market design reform. Under such state-backed schemes, the distribution of costs between the market and the state will depend on the balance of supply and demand. Lower demand will decrease spot-market prices, reducing market costs but increasing the cost to CfD-issuing states. If electrification of European energy demand does not keep pace with the electricity supply expansion, tens of billions of euros annually could be channelled through state contracts, generating costs that must ultimately be recovered from consumers. A cost-efficient, managed transition will require European coordination of electricity supply, demand and network investments. Clean electricity supply and demand should be synchronised through a combination of state interventions and market mechanisms. Undersupply of clean power will mean a failure to meet climate targets, but oversupply can be costly too. To manage the costs of renewable de-risking schemes and to accelerate energy-system decarbonisation, flexible electricity systems should be promoted, policies to encourage electrification could be implemented and cost-recovery arising from state-backed renewable support schemes should be fair.
Topic:: Climate Change, Markets, Electricity, Energy, and Supply and Demand
Political Geography:: Europe

99. Overcome divisions and confront threats: Memo to the Presidents of the European Commission, Council and Parliament

Author:: Maria Demertzis, André Sapir, and Jeromin Zettelmeyer
Publication Date:: 07-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: In the last five years, the European Union managed to find its way through a series of major shocks, including the pandemic and the 2022 surge in energy prices. The response was in many ways remarkable, including unprecedented EU borrowing to fund the NextGenerationEU economic recovery programme and a coordinated reduction in energy demand. However, these crises have left the EU in a bruised state. The pandemic recession and energy-support measures have squeezed fiscal space. Higher energy prices have persisted and EU industrial competitiveness has been eroded. The productivity and per-capita income gap with the United States has widened. Meanwhile, the world around the EU has become more threatening and fragmented. The military situation in Ukraine remains precarious. China has become both more authoritarian and more assertive. The US shift toward protectionism has become entrenched. There is less consensus for measures to combat climate change. In the face of all this, the challenges confronting you are substantial. In the next five years, you must continue to support Ukraine while implementing measures to reinvigorate EU growth, meet the 2030 climate targets and lay the ground for meeting the 2040 goals, and secure faster emissions reductions beyond the EU’s borders. Social cohesion needs to be restored to head off threats to the EU model. More needs to be done to improve EU external security. Promoting growth and enhancing cohesion will entail further deepening of the single market in areas with the highest growth impact, doing more to support innovation and defending competition, openness and multilateralism. Safeguarding the European Green Deal means boosting green industrialisation and fair burden-sharing, while scaling up international climate finance. Strengthening security requires continued support for Ukraine and the addressing of economic security risks. Underpinning all of this, a serious effort must be made to improve EU governance – and it must be done without creating further division.
Topic:: Security, European Union, European Parliament, European Commission, Energy, Regional Politics, Competition, European Council, and Threat Assessment
Political Geography:: Europe

100. How to finance the European Union’s building decarbonisation plan

Author:: Ugnė Keliauskaitė, Ben McWilliams, Giovanni Sgaravatti, and Simone Tagliapietra
Publication Date:: 07-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: By 2030, the European Union must reduce emissions from the heating and cooling of buildings – responsible for 13 percent of EU emissions – by the equivalent of the annual emissions of Slovakia. This requires a near tripling of the current decarbonisation rate. But the time gap between high upfront costs and long-term payback from renovation works deter consumers from investing in energy renovation. To address these challenges, the EU has introduced a policy toolkit that includes strengthened price signals against fossil-fuel heating through emissions trading, and setting energy-consumption reduction targets in the Energy Performance Building Directive (EPBD). EU countries must take the EPBD targets seriously and implement policies to accelerate building retrofits and the adoption of clean heating. If they don’t, there is a risk that EU climate targets will not be met, and the costs for households of subjecting domestic heating to emissions trading could be almost twice the higher costs seen during the 2022 energy crisis. We estimate that achieving the EPBD’s energy savings targets requires filling an investment gap of about €150 billion per year up to 2030. This is a daunting but feasible goal. By leveraging energy savings from electrification and retrofitting to reduce renovation costs, the investment gap could be more than halved. Additionally, effective use of EU funds and emissions trading revenues will further shrink the gap. A mix of grants, preferential loans and obligations is needed, as no single policy will speed up energy renovations. Prioritising grants for the worst-performing buildings, often occupied by vulnerable consumers, will yield climate benefits and benefits in terms of improved air quality, health, productivity, energy security and lower future government outlays to alleviate energy poverty. Traditional public subsidies have not successfully engaged the banking sector, which now must help to foster private-public financing mechanisms. Countries also need to adjust relative energy prices for heating through taxation and subsidies, and expand one-stop-shops to streamline the renovation process for consumers.
Topic:: European Union, Carbon Emissions, Decarbonization, and Energy
Political Geography:: Europe

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