Political Geography: Europe - CIAO Search Results

401. 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

402. 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

403. 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

404. 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

405. 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

406. 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

407. 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

408. 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

409. 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

410. 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

411. 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

412. 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

413. 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

414. 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

415. 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

416. 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

417. 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

418. 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

419. 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

420. 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

421. 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

422. 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

423. 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

424. Re-energising Europe’s global green reach

Author:: Giovanni Sgaravatti, Simone Tagliapietra, and Cecilia Trasi
Publication Date:: 06-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The goals of decarbonisation, competitiveness and strategic autonomy will underpin the implementation of the European Green Deal during the 2024-2029 European Union institutional cycle. To strike the right balance between these sometimes conflicting objectives, EU policymakers should focus on both domestic and international aspects of the Green Deal. Domestically, they must ensure implementation of the agreed climate plan, avoiding inaction or delay. Internationally, they must establish a new green-diplomacy and partnerships strategy, which will support global decarbonisation while addressing competitiveness and strategic autonomy concerns. The current EU approach to green diplomacy is uncoordinated, lacking a clear strategy and appropriate resources. Given the EU’s limited share of annual global emissions, supporting decarbonisation abroad is fundamental to meet the global net-zero emissions goal. The EU’s green diplomacy and partnerships need to be strengthened and expanded in a pragmatic and coherent manner. The main priorities include focusing on the implementation of international emissions reduction pledges, a new diplomatic push for carbon pricing and international green taxation, the creation of streamlined partnerships for green industrialisation with major partner countries and the promotion of new global trade and climate agreements. To succeed in these, a revision of the current governance of EU global green action will be required.
Topic:: Climate Change, European Union, Partnerships, Carbon Emissions, and Green Transition
Political Geography:: Europe

425. The implications of the European Union’s new fiscal rules

Author:: Zsolt Darvas, Lennard Welslau, and Jeromin Zettelmeyer
Publication Date:: 06-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: European Union countries are required by the EU Treaty to keep their budget deficits within 3 percent of GDP, and their public debt within 60 percent of GDP. A new framework to enforce these rules is based on country-specific debt sustainability analyses (DSA) and uses a single indicator, a measure of public expenditure, as the annual fiscal policy target. These changes are welcome. To assess the sustainability of public finances, it is much better to focus on the likely evolution of the debt path than to rely on simple numerical rules. Public expenditures net of changes to tax policy are a far better target for fiscal policy than the deficit, since they are under the control of the government and cannot give rise to pro-cyclical fiscal policy (excess spending in good times, fiscal cuts in bad times). These features could increase the framework’s efficiency and improve compliance. However, the new framework also contains numerical safeguards to ensure a minimum pace of debt and deficit reduction. These might overwrite the DSA-based requirements and could undermine the rationale for the new rules and the incentives for compliance. The safeguards could also introduce some pro-cyclicality and, more importantly, could hold back increases in public investment. Our calculations show that the new framework will require ambitious fiscal adjustments from high-debt countries, though less than would have been required by the previous framework. Numerical safeguards will not be a significant constraint in the first application of the framework in 2024, except in the case of Finland. In the next application, in 2028, they imply for France and Italy greater fiscal adjustment than required by the DSA and the 3 percent benchmark. There is ambiguity about the consistency of the new fiscal rules and the largely-unchanged excessive deficit procedure (EDP), and whether proposed reforms and investment will influence the DSA. This could interfere with the successful application of the framework. We recommend that the EDP should require the same adjustment as the DSA, a method- ology should be developed to estimate the quantitative impact of proposed investments and reforms, and the DSA methodology should be revised. In case EU countries’ investment plans on aggregate do not fill the green public-investment gap, we recommend a new EU facility to foster such investments.
Topic:: Budget, European Union, Investment, and Fiscal Policy
Political Geography:: Europe

426. How much does Europe pay for clean air?

Author:: Miquel Oliu-Barton and Juan Mejino Lopez
Publication Date:: 06-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: Despite significant progress, air pollution still causes €600 billion in losses each year in the European Union – equal to 4 percent of its annual GDP. These costs stem from productivity losses such as increased absenteeism, the reduction of in-job productivity and harm to ecosystems. Air pollution costs are disproportionately high in eastern Europe and Italy, where losses are projected to remain above 6 percent of GDP until 2030. The EU’s 10 percent most-polluted regions suffer 25 percent of the burden of mortality attributable to air pollution. Measures against air pollution should be prioritised, not delayed, in these regions. Promoting clean air boosts economic growth by €50 billion to €60 billion every year. The EU’s increasing commitment to cleaner air is reflected by a threefold increase in the funds allocated to promoting clean-air policies, from €7 billion annually for the period 2014-2020 to €25 billion annually for 2021-2027, notably supported by the Recovery and Resilience Facility (RRF). EU financial support must continue beyond 2026 when the RRF terminates. The EU Ambient Air Quality Directive sends a strong signal but leaves loopholes: exceptions and postponements may jeopardise overall progress on cleaner air. Fossil-fuel consumption is one of the main obstacles to achieving clean-air targets. Yet fossil fuels subsidies were fourteen times higher than EU clean-air funds between 2014 and 2020, and are projected to remain five times higher for the years ahead. Ammonia, an important precursor of fine particulate matter mainly stemming from agriculture, is insufficiently regulated. Effectiveness of clean-air policies is context-dependent. Identifying concrete actions for each region and quantifying the potential gains are required to accelerate the transition to cleaner air. Phasing out coal use in residential heating is most profitable in eastern Europe, while reducing industrial and agricultural emissions would reap more benefits in the north of Italy.
Topic:: European Union, Economic Growth, Productivity, and Air Pollution
Political Geography:: Europe

427. A conceptual framework for the identification and governance of European public goods

Author:: Gregory Claeys and Armin Steinbach
Publication Date:: 05-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: The challenging current policy environment has raised the question of which policy decisions should be taken at national level and which at European Union level. As a general rule, the EU should be responsible only for the provision of European public goods (EPGs), while countries are better placed to provide national public goods. However, in practice, the situation is rarely that simple. We offer a framework for identification of EPGs with three main insights. First, a decision to provide a public good at national level, EU level or a combination of both depends on the degree of heterogeneity of preferences across countries and the efficiency case for EU-level provision. When preferences vary and the efficiency case is weak, goods should be provided at national level. When preferences are similar and the efficiency case is strong, goods should be provided at the EU level. When preferences differ but there is a strong efficiency case, a trade-off arises. Second, institutional and legal instruments exist already to manage this trade-off. These include: competence transfers, decision-making modalities, variable participation of countries, centralisation of delivery and funding, and compensating negatively affected countries to achieve greater alignment of preferences. Third, both the efficiency case for EPGs and the distribution of preferences over their provision may change over time. This could be because the world around the EU changes (for example, giving greater weight to an efficiency case, eg in areas related to defence) or because preferences change, for example, as result of a pandemic, or because a particular institutional or compensation practice convinces dissenters that they can be better off inside than outside a multi-country arrangement governing the provision of a public good. An implication is that the question ‘should public goods be provided at the national or European level?’ may be the wrong question to ask. The right question is how to find institutional arrangements for public-good provision, to maximise the benefits of public goods for EU members.
Topic:: Governance, European Union, Institutions, and Public Goods
Political Geography:: Europe

428. Instruments of economic security

Author:: Conor McCaffrey and Niclas Poitiers
Publication Date:: 05-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: Geopolitical and economic developments, including Russia’s invasion of Ukraine and trade disruptions during the COVID-19 pandemic, have raised concerns about the European Union’s exposure to hostile countries. The challenge of improving European economic security (which we narrowly treat here as exposure to foreign trade or production shocks) has grown in importance, with various relevant policy measures introduced at EU level. Focusing in particular on the threat posed by economic coercion, this paper begins by assessing the nature of this threat, before outlining two lessons that can be drawn from two recent instances of this coercion in action: China’s actions against Lithuania and Australia respectively. First, while much of the policy debate has focused on imports, the threat to EU exporters should not be ignored. Second, while coercion may not cause any macroeconomically significant harm, this may mask severe impacts on the targeted industries, which should be considered in any policy responses. The EU has significantly added to its policy tools in this area, though some of the instruments introduced under the umbrella of economic security go beyond the definition we consider. An effective response should be built around: building a deeper understanding of the risks facing the EU; improving diversification of both exports and imports; using targeted industrial policy in the limited sectors where the risks warrant intervention; and managing and limiting the fallout of any shocks using ex-post instruments.
Topic:: European Union, Economic Policy, Economic Security, and Coercion
Political Geography:: Europe

429. Three risks that must be addressed for new European Union fiscal rules to succeed

Author:: Lucio Pench
Publication Date:: 05-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The debate on the reform of the European Union’s fiscal rules, the Stability and Growth Pact, has largely focused on their design. This nearly exclusive focus has distracted attention from the equally, if not more, important aspects of implementation. The reform, completed in April 2024, left implementation unaddressed, or at least open to very different potential outcomes. In particular, the reform failed to clarify the interplay between EU countries’ medium-term fiscal structural plans (MTFSPs), which embody the new focus on debt sustainability, and the excessive deficit procedure (EDP), which remains the main enforcement tool under the rules. The need for clarification is urgent as several countries are set to enter EDPs for breaching the SGP’s 3 percent of GDP deficit threshold at the same time as their first MTFSPs are endorsed in autumn 2024. There is a risk that the adjustment paths prescribed by EDPs may be at least temporarily less demanding than the debt-sustainability requirements of the MTFSPs would normally imply. Even if consistency between EDPs and MTFSPs is ensured from the start, inconsistencies may arise over time and be resolved in a way that further postpones the necessary adjustment. The main risk is that the 3 percent of GDP deficit might be perceived as the only target that matters for countries that enter EDPs in 2024, as repeated revisions of the MTFSPs undermine the cogency of the debt sustainability requirements. This scenario is likely to materialise if the countries are allowed to exit their EDPs upon bringing their deficits to or below 3 percent of GDP, while being still far from the necessary correction of the debt trajectory. It is important to shape countries’ expectations on the implementation of the upcoming EDPs in a way that is conducive to the immediate internalisation of the debt sustainability constraint implied by the new rules, rather than allowing it to be viewed as a distant objective. This change in expectations could be achieved by clarifying that, even if a country has been placed in an EDP only for breach of the deficit criterion, it should also satisfy the debt criterion for the procedure to be abrogated.
Topic:: Debt, Reform, European Union, Fiscal Policy, and Sustainability
Political Geography:: Europe

430. Unpacking China’s industrial policy and its implications for Europe

Author:: Alicia Garcia-Herrero and Robin Schindowski
Publication Date:: 05-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: China is often credited with a successful application of industrial policy. One important particularity of China’s industrial policy is that it aims at levelling the playing field between the state economy and the private economy in access to finance, yet within a framework of strategic goals. This aim is not relevant for market economies, such as those of the European Union, but only for those where state enterprises are clearly privileged. Notwithstanding the difficulties in making valid comparisons, our analysis of how China conducts industrial policy in a variety of sectors points to success in some sectors but not all. More importantly, productivity growth in China has already been declining for two decades. Given the very large resources that China has put into industrial policy, with subsidies being only one part, it is surprising that success is not more evident. This relates partly to factors including cronyism and regional protectionism. While the former might be less relevant for the EU given the different institutional background, the latter certainly is relevant since the EU faces the potential consequences of member country-level industrial policy for its single market. A lesson from China seems to come from the sectoral focus, with a long-term and economic-security mindset. The EU is far from this, but it is in the process of linking economic security to industrial policy. Finally, responding to China’s industrial policy involves diverse investigations and challenges in measuring subsidies accurately. Understanding China’s very diverse and complex approach to helping companies achieve the government’s industrial policy goals is crucial for anticipating the consequences of China’s actions. These could be positive, such as cheaper imports of green technology, or negative, such as Chinese overcapacity spilling over to the EU single market.
Topic:: Industrial Policy, Markets, European Union, and Economy
Political Geography:: China, Europe, and Asia

431. How to de-risk: European economic security in a world of interdependence

Author:: Jean Pisani-Ferry, Beatrice Weder di Mauro, and Jeromin Zettelmeyer
Publication Date:: 05-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: Pandemic-related supply disruptions, the energy crisis provoked by Russia’s invasion of Ukraine and economic coercion by China have put economic security high on the European Union policy agenda. The question is how exactly the EU should ‘de-risk’ its external economic relationships without foregoing the benefits of trade. The standard answer is that it should identify product-level trade dependencies, mainly on the import side, and reduce them, mainly through diversification of suppliers, while otherwise maintaining maximum trade integration. This Policy Brief argues that this answer falls short. First, product-level dependencies cannot be identified reliably even with sophisticated analysis and data. As a result, both ‘missed dependencies’ and ‘false positives’ are inevitable. Second, external shocks and coercion could be propagated through exports, productive assets held abroad and financial channels as much as through imports. The analysis has five main implications Import de-risking should focus on a few product categories for which the costs of supply interruptions would be unquestionably large. This reduces false positives. De-risking and/or buffers to deal with exports and financial coercion require more attention. De-risking must be complemented by raising resilience against all shocks, whatever theirorigin. This requires a deeper and broader European single market. De-risking and resilience must be complemented by deterrence. A sufficiently high probability of chronic trade conflict – or one very large conflict – may justify reducing overall integration with a large trading partner, on both the export andimport sides. EU economic security policies have been right to emphasise the reduction of import dependence on chips and critical raw materials, and the creation of a powerful legal instrument to deter coercion (the Anti-Coercion Instrument). In most other respects, there is room for improvement.
Topic:: European Union, Risk, Trade, Imports, Economic Security, and Interdependence
Political Geography:: China and Europe

432. Using the financial system to enforce export controls

Author:: Benjamin Hilgenstock, Elina Ribakova, Guntram Wolff, and Anna Vlasyuk
Publication Date:: 04-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: Russian imports of battlefield goods that are subject to export controls, including from Western producers, have surged since mid-2022 and reached levels close to those prior to Russia’s full-scale invasion of Ukraine. Russia thus continues to be able to acquire critical foreign components that it needs for its military industry. These imports occur via mainland China, Hong Kong, Turkey and the United Arab Emirates, while other countries including Armenia, Georgia, Kazakhstan and the Kyrgyz Republic have also seen massive increases in imports from the EU and other coalition countries that likely end up in Russia. The implementation and enforcement of export controls faces major challenges, which are multifaceted and centre around complex supply chains, lack of transparency in documentation and opaque financial structures. The issues are familiar from anti money laundering (AML) and countering financing of terrorism (CFT) frameworks, where much progress has been made in the last two decades. A similar approach could help in rendering export controls effective. We propose: First, financial institutions could be tasked to play a role in the monitoring of the trade in export-controlled goods and the blocking of illicit transactions, building on their experience with due diligence in financial transactions. Second, non-financial companies could learn from banks’ efforts in the AML/CFT sphere to implement proper due-diligence procedures and to ensure export controls compliance. Public-sector investigations and appropriate fines are critical to increase the incentives for firms to act. Technology sanctions are going to be part of the economic statecraft toolbox for the foreseeable future. The Russia case will test their effectiveness and credibility, or lack thereof.
Topic:: Sanctions, European Union, Exports, Trade, Imports, Financial Systems, and Russia-Ukraine War
Political Geography:: Russia and Europe

433. Economic arguments in favour of reducing copyright protection for generative AI inputs and outputs

Author:: Bertin Martens
Publication Date:: 04-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: Generative artificial intelligence (GenAI) models have stirred considerable controversy about copyright protection for AI training inputs and model outputs. The European Union’s AI Act will require model developers to be transparent about their use of training inputs such as text, images and music. The EU Copyright Directive allows free text and data mining of these media inputs unless copyright holders have opted out and want license payments. The right to opt-out amounts to economically inefficient overprotection of copyright. Free use of media content for GenAI training does not affect media sales to consumers. Optouts only strengthen the bargaining position of copyright holders, who decide depending on their private interests. That generates windfall profits without any increase in consumer surplus or social welfare. The licensing of training inputs reduces the quantity of data and the quality of GenAI models, creates transaction costs and reduces competition between GenAI firms. This slows down GenAI-induced innovation in media products and production processes, and productivity gains in all service sectors that apply GenAI. Ultimately, it slows down economic growth compared to what it could be with competitive and high-quality GenAI. Bargaining over license pricing is arbitrary as there is no objective revenue benchmark to start from. Defenders of the moral right to remuneration argue that any arbitrary remuneration is better than no remuneration. But this private moral right comes at the expense of social welfare. The ongoing bargaining and court cases between media producers and GenAI developers risk entrenching this market failure in jurisprudence. Early regulatory intervention and elimination of opt-outs for GenAI training, or weakening them in AI Act implementation guidelines, would solve this. There is no need for copyright on GenAI outputs either. GenAI reduces the marginal cost of machine-production of media outputs to close to zero, on par with the marginal cost of reproduction. That eliminates incentives for piracy. Moreover, composite human-machine outputs benefit from a de-facto extension of copyright on the human component.
Topic:: Science and Technology, Intellectual Property/Copyright, European Union, Regulation, Economic Growth, and Artificial Intelligence
Political Geography:: Europe

434. The rocky road to EU accession for Western Balkan countries: obstacles and lessons from the Eastern Partnership

Author:: Armin Steinbach
Publication Date:: 03-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: The Western Balkan countries and the countries of the Eastern Partnership are moving towards European Union accession at different speeds. We explore whether and how the variable speed towards EU accession can be traced to different legal regimes governing European integration: Stabilisation and Association Agreements (SAA) for the Western Balkan countries, and Deep and Comprehensive Free Trade Agreements (DCFTA) for the countries of the Eastern Partnership (EaP). We find that DCFTAs apply more lenient conditionality to intra-regional cooperation. They subject non-tariff barriers to a more explicit regime than the Western Balkan SAAs. The DCFTAs also offer a more rigid and comprehensive approach to the approximation of laws than the SAAs, and the DCFTAs are more inclusive with regard to the role of civil society. However, there is no indication that the differences in legal governance have translated into stronger economic performance in the EaP countries or greater integration with the EU, compared to the Western Balkans. The Western Balkan countries remain significantly more integrated than the EaP countries with the EU in trade terms, while convergence with the EU has been stagnating both for the Western Balkan and the EaP countries. Economic shortcomings in the Western Balkan still need to be addressed. Conditionality attached to both integration into the EU single market and EU funding should be nuanced; the eradication of non-tariff barriers should be prioritised both inter-regionally and intra-regionally between Western Balkan countries; the need for stronger EU investment in the region is reinforced by geopolitical concerns about Chinese investments coming without EU-type conditionality attached; and governance should give a stronger role to civil society. In order to address the shortcomings in SAAs, a pragmatic solution is to use the existing governance framework under the SAAs.
Topic:: Treaties and Agreements, European Union, Economy, Regional Integration, and Eastern Partnership
Political Geography:: Europe and Balkans

435. Broader border taxes: a new option for European Union budget resources

Author:: Pascal Saint-Amans
Publication Date:: 03-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: There is widespread agreement on the need for new resources to fund the European Union's budget in order to meet increasing spending demands, not least repayment of debt incurred as part of the EU’s post-pandemic economic recovery. In particular it is seen as desirable that the EU should have ‘own’ resources, or reliable ongoing revenue streams. But there is little agreement on what new own resources could consist of. Limited reform so far has led to the introduction of a levy paid by EU members depending on plastic packaging waste generated in their territory and not recycled. Meanwhile, the European Commission has proposed resources for the EU budget from emissions trading revenues, and from levies collected under the EU carbon border adjustment mechanism (CBAM). There proposals are pragmatic and move in the right direction, but do not go far enough. The debate about own resources should focus on whether the EU will be able to build genuine own resources based on common tax policies. The EU suffers from ‘tax leakage’ in which profits are shifted from high-tax to low-tax EU countries, and from there onto no or low-tax non-EU jurisdictions, often without the application of withholding taxes. It may not be too much of a stretch to compare this situation of tax leakage with the situation addressed by CBAM – a quasi-tax at the border. So far, an opportunity for what could be seen as a tax at the border of the internal market, aiming to protect the market from harmful competition, may have been missed. Such a tax could reflect the undertaxed profit rule agreed as part of the international deal on the corporate minimum tax. Focusing on protecting the revenues of EU members by common tax borders could offer scope for new own resources.
Topic:: Budget, European Union, Borders, and Tax Systems
Political Geography:: Europe

436. Incorporating the impact of social investments and reforms in the European Union’s new fiscal framework

Author:: Zsolt Darvas, Lennard Welslau, and Jeromin Zettelmeyer
Publication Date:: 03-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: The European Union’s new fiscal framework aims to incentivise public investment and reforms by offering the option to extend the four-year fiscal adjustment period to seven years, thereby lowering the average annual fiscal adjustment requirement. EU countries can propose investment and reforms in the context of their national medium-term fiscal structural plans. When they do, these investments and reforms can be expected to also inform the fiscal adjustment proposed by member states. Yet, the EU lacks an agreed methodology for deciding on the potential quantitative impact of investment and reforms on the fiscal adjustment required under the new rules. This paper first analyses the ‘investment friendliness’ of the new framework. Although the incentives offered for raising investment are powerful, the bar for extending the adjustment period mainly through higher investment is high, and the design of the new rules will make it hard to actually raise investment. We next propose an approach for quantifying the impact of investment and reform on debt sustainability in the context of the new framework, taking into account uncertainty about their implementation and their economic effects. Such a methodology would also help the European Commission evaluate the impacts of recently adopted measures, the impacts of which are not yet observable. Developing this methodology will require revisiting the current commonly agreed methodologies for medium- and long-term capital stock and total factor productivity projections. We illustrate the potential impact of investment on debt sustainability analyses through calculations on three social investment measures, that is, combinations of reform and public spending that aim to increase human capital and labour force participations. While the impact of individual reforms on fiscal adjustment needs is generally modest, the combined impact of several measures could be notable.
Topic:: Reform, European Union, Fiscal Policy, Public Investment, and Social Investment
Political Geography:: Europe

437. Exposure to generative artificial intelligence in the European labour market

Author:: Laura Nurski and Nina Ruer
Publication Date:: 03-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: We apply two sets of generative artificial intelligence (GenAI) occupational exposure scores – one task-based, one ability-based – to the European Labour Force Survey. While using different methodologies, our findings reveal consistent demographic patterns across the two approaches: jobs held by women, highly educated and younger workers are more exposed to GenAI technology in Europe. We also review the literature on the recent productivity impact of GenAI. Within the same occupations, less-experienced or less-skilled workers consistently get the largest productivity gains from GenAI support. We argue that a task-based analysis is more fruitful than an ability-based one, both for guiding GenAI adoption in organisations and their workplaces, and for assessing the employment and job quality impact on workers. Finally, we provide policy recommendations that can help workers (ie the labour supply) adjust to technological disruption, such as providing training and social safety nets. But we go further by also suggesting policy interventions that could redirect future labour demand towards better jobs, by promoting job redesign and organisational agility. Monitoring GenAI’s employment effects and researching the ‘jagged technological frontier’ is necessary to further build our understanding of the employment impact of this transformational technology.
Topic:: European Union, Artificial Intelligence, Labor Market, and Supply and Demand
Political Geography:: Europe

438. Ukraine’s path to European Union membership and its long-term implications

Author:: Zsolt Darvas, Marek Dabrowski, Heather Grabbe, Luca Léry, André Sapir, and Georg Zachmann
Publication Date:: 03-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: Whether and when Ukraine accedes to the European Union will depend greatly on how and when its war with Russia ends and post-war reconstruction starts, and how the EU handles issues of governance, security, migration, trade, investment, the energy transition, decarbonisation and the EU budget. The enlargement process is likely to overlap with post-war reconstruction, increasing the EU's influence in fostering Ukraine’s institutional development. Ukrainian leaders will have strong incentives to comply with the accession criteria, which the EU should use astutely to create a better-functioning economy and public institutions, especially by reducing opportunities for corruption. This will require clearer standards for rule-of-law and fundamental values, including effective tools to ensure continued compliance after accession. That is also the most effective way to ensure a positive impact of future enlargements on EU governance. The EU will also need to develop assistance programmes to help the Ukrainian government manage post-war external and internal security challenges, including the large number of weapons in circulation, and to encourage Ukrainian refugees to return to the country when possible, as they will be needed for the reconstruction effort. If the current EU budget rules were applied and there were no transitional arrangements – which is unlikely – we calculate the total annual cost of Ukraine's integration into the EU budget at 0.13 per cent of EU GDP, which would hardly change net recipient/payer positions of current EU members. Some of this funding would come back to the EU via EU companies participating in EU-funded projects in Ukraine. Ukraine’s entry into the EU would benefit EU GDP via trade, migration and foreign direct investment, boosting employment, production and tax revenues in the EU. The history of EU enlargement shows that the strongest motivation for difficult reforms is a credible and predictable accession process based on rewarding reforms. Both Ukraine and the EU would benefit from progressive integration of the country into EU policies, alongside the formal accession negotiations. That would show the Ukrainian public the tangible benefits of moving towards EU standards, while also bringing Ukraine into areas such as energy cooperation and decarbonisation.
Topic:: European Union, Regional Integration, and Russia-Ukraine War
Political Geography:: Russia, Europe, and Ukraine

439. The state of financial knowledge in the European Union

Author:: Maria Demertzis, Luca Léry Moffat, Annamaria Lusardi, and Juan Mejino Lopez
Publication Date:: 02-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: Only one in two individuals in the European Union, on average, is financially knowledgeable. In response to a 2023 survey containing five questions assessing basic financial knowledge, only half of the respondents answered at least three of the five questions correctly. This represents a low level of financial knowledge and an obstacle for individuals to invest in financial markets. The questions most often answered correctly by respondents measured understanding of inflation and the relationship between risk and return. By contrast, only one in five respondents answered a question on the relationship between interest rates and bond prices correctly. Regarding inflation, there is a large difference between the least and most educated respondents in terms of answering the relevant question correctly. Gaps in understanding the concept of inflation are also evident between the youngest (18-24) and oldest respondents (55+) and between the poorest and richest households. A gender gap is present in financial knowledge, with 18 percentage points more men than women answering at least three out of five questions correctly, on average in the EU. Those with greater financial knowledge are less financially fragile in that they can still cover their expenses if there is a sudden loss of income, and are more confident that they will have sufficient funds to sustain themselves during retirement. Countries with higher proportions of people who are financially knowledgeable have higher numbers of people who both save with and borrow from financial institutions, an indication that financial knowledge may improve financial inclusion. All EU countries have, or are in the process of putting together, a national financial literacy strategy. There is an urgent need to roll out these strategies, to monitor progress over time and to establish best practices. Particular attention needs to be given to how financial knowledge interacts with digital skills as financial services are increasingly digitalised. Financial literacy strategies should also help close gender and other gaps in knowledge among vulnerable groups, and should ensure that financial education starts early and in schools.
Topic:: European Union, Economy, Inflation, and Financial Literacy
Political Geography:: Europe

440. Unity in power, power in unity: why the EU needs more integrated electricity markets

Author:: Georg Zachmann, Carlos Batlle, Francois Beaude, and Christoph Maurer
Publication Date:: 02-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The energy crisis that started in 2022 reminded European governments of the resilience provided by relatively well-integrated European electricity markets, which have been painstakingly built-up over several decades. European Union leaders thus decided to reverse a creeping energy renationalisation and to invest in completing the internal market. However, there are some indications that this momentum is being lost, with different EU capitals taking different lessons from the energy crisis, at a time of unprecedented investment needs in generation and grids across the EU. The multiple benefits of enhanced EU energy-market integration should be emphasised. ‘Techno-economic’ benefits can be secured from optimising the design and operation of several national electricity systems jointly, rather than individually. These benefits will increase massively with higher shares of renewables and include less fossil-fuel burn and less volatile short-term prices, cost savings through harnessing regional renewables advantages, reduced need for expensive back-up capacity and flexibility, and enhanced resilience to shocks. In addition, greater energy-market integration will trigger benefits of a more managerial-governance related nature, though these are harder to quantify. They include benefits in terms of competition, innovation and credibility, which are particularly useful in the electricity sector, which typically faces rather long investment times and high degrees of concentration in purely national markets. Further market integration requires substantial political investment. Governments will need to deal with significant distributional effects within and between countries. Experience has shown that domestic political constraints in this respect are often numerous and difficult to overcome. Therefore, achieving the benefits of integration will require a vision on what degree of integration is feasible and desirable, and how to properly implement and govern it. It will also require an honest acknowledgement of the implications and costs of not pursuing greater integration.
Topic:: Markets, European Union, Regional Integration, Electricity, and Energy Crisis
Political Geography:: Europe

441. Smarter European Union industrial policy for solar panels

Author:: Ben McWilliams, Simone Tagliapietra, and Cecilia Trasi
Publication Date:: 02-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The European Union plans a major increase in solar PV capacity from 263 GW today to almost 600 GW by 2030. If nothing changes, this expansion will be based almost exclusively on solar panels imported from China, which supplies over 95 percent of solar panels used in the EU. This dependence has raised concerns about EU economic security and geopolitical vulnerabilities, especially in light of recent global disruption. The EU has agreed in principle a non-binding 40 percent self-sufficiency benchmark for solar panels and other identified strategic technologies, to be approached or achieved by 2030. However, for the solar sector specifically, there is no strong economic justification for an import-substitution approach. Such a strategy risks increasing the costs of solar panels, slowing deployment and creating industries that are over-reliant on subsidies. EU solar manufacturing subsidies are not appropriate based on criteria of European production alone. Subsidies could, however, be justified on innovation grounds, by supporting new solar products that have a real chance to develop into sustainable industries that contribute to climate goals. To address concerns about short-term dependence, alternative tools should be employed: accelerated solar deployment, strategic stockpiling and gradually diversifying import sources. In the longer term, recycling of solar panels deserves greater attention and funding. In terms of strengthening economic resilience relative to China, Europe should implement an industrial policy that intervenes in sectors that are more likely to contribute to sustainable economic growth and alleviate decarbonisation bottlenecks.
Topic:: Industrial Policy, European Union, Imports, Solar Power, Economic Security, and Energy Transition
Political Geography:: Europe

442. Entry and competition in mobile app stores

Author:: Fiona Scott Morton
Publication Date:: 01-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: Entry by rival app stores on the two currently available mobile operating systems is an exciting potential benefit of the European Union’s Digital Markets Act (DMA). Apple and Google will need to share the technical specifications of their interfaces with developers and offer them the same functionalities they give to their own stores. The DMA also allows developers to disintermediate the legacy stores entirely by mandating downloads from the web to handsets. These changes should stimulate price competition – resulting in fees falling from the current 30 percent – and competition in variety and features. Privacy and security will be important issues, with the question of who is permitted to offer rival stores being critical. Good enforcement by the European Commission will be necessary to balance gatekeeper rules restricting dangerous services with the need for contestability. The paper concludes with examples of rival app stores that can be expected to enter. Stores will differentiate through curation, such as stores for children, for those trying to reduce their carbon footprints or for those seeking to use public services in a particular country. Some stores will innovate through alternative payment schemes – for example, a newspaper store that enables per-article pricing and pioneers innovative data-sharing policies. Lastly, developers such as Epic have long stated their desire to offer stores with innovative technology.
Topic:: European Union, Regulation, Mobile Applications, Digital Markets Act (DMA), and Competition
Political Geography:: Europe

443. The chicken-and-egg problem in the European Union Digital Markets Act

Author:: Fiona Scott Morton
Publication Date:: 01-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: The gatekeeper platforms regulated by the European Union’s Digital Markets Act (DMA) must comply with the law as of 6 March 2024. The DMA requires that core platform services create and make available interfaces that allow business users to access end users via the platform at lower cost and on better terms. For example, app developers will have the right to distribute on handsets through different app stores, using different payment services, directing users to purchase content on the web and charging different prices in different channels. The gatekeeper must provide the application programming interfaces, or APIs, to enable business users to take advantage of these rights. However, the DMA does not define exactly what those APIs should be. Rather, the law requires a gatekeeper’s interface to be “effective,” meaning business users can use it to enter, compete and innovate. Because such a design is not, in general, in the interest of the gatekeeper, the input of business users to both gatekeepers and the European Commission is critical for evaluating compliance with the law. Thus far there is little evidence of platforms interacting with business users or putting out interfaces for evaluation by business users, or of business users offering comments on what interfaces would be best for entry and competition. It may be that the interface must come first, and then its existence will stimulate entry of new business users or investment into new services that will use the interface. Rather like the chicken and the egg, which should come first? Business users are needed to help create useful interfaces, while useful interfaces are needed to justify investment and entry by business users.
Topic:: Markets, European Union, Investment, and Digital Markets Act (DMA)
Political Geography:: Europe

444. Making industrial policy work: a case study on the European Battery Alliance Academy

Author:: Conor McCaffrey and Niclas Poitiers
Publication Date:: 01-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: The transition from cars powered by the internal combustion engine to vehicles powered by electric batteries implies a fundamental shift in the types of skills required by the automotive industry. However, the industry faces significant problems in finding suitable workers. Surveys show that the lack of skilled labour is seen by firms as a problem of similar magnitude to high energy costs. Against the background a general skills shortage in the European Union, the shortage of skilled labour represents a major impediment to the development of a European battery industry. The European Battery Alliance Academy is the main component of the EU’s strategy for tackling this problem. It develops training courses and materials to assist local training providers, and serves as a blueprint for skills policies in other industries. However, given the scale of the challenge, it represents more a symbolic than a substantive answer to the challenge. More should be done. The limited powers of the EU in labour market policies hold up a union-wide solution. In the short term, the training programmes developed by the European Battery Alliance Academy* could more explicitly target demographics that are underserved by private training providers. In the medium term, the EU should rethink its labour market competences in order to develop a social pillar to underpin the European green transition.
Topic:: Industrial Policy, European Union, Labor Market, Skilled Labor, and Workforce
Political Geography:: Europe

445. Europe’s under-the-radar industrial policy: intervention in electricity pricing

Author:: Ben McWilliams, Giovanni Sgaravatti, Simone Tagliapietra, and Georg Zachmann
Publication Date:: 01-2024
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The different ways in which European Union member-state governments add levies to the price of electricity creates huge discrepancies in the prices paid by consumers. Europe’s energy transition depends upon increasing electrification of the economy and increasing the share of that electricity produced by renewable sources. Both factors raise the importance of electricity taxes set by governments. The energy crisis drew attention to this: as electricity prices soared, governments responded with billions of euros in subsidies to protect households and companies. While the acute phase of the energy crisis has passed, growing concerns about industrial competitiveness create political pressure for governments to continue with such subsidies or tax exemptions. High profile examples include the French reform of nuclear-power generated electricity pricing, and a political debate in Germany over how aggressively to subsidise the electricity price paid by energy-intensive firms. We frame the debate on intervention in electricity pricing around five distributional dilemmas concerning the recuperation of electricity expenses: 1) whether to raise general or electricity taxes, 2) the split between household and companies, 3) the split between energy-intensive and non-energy intensive companies, 4) cross-border effects, and 5) trade-offs in attracting new clean-technology manufacturing factories. Priorities according to these distributional criteria will differ by country, but these factors should be central to discussions. Governments must recognise that efforts to lower prices artificially for one group of consumers will raise prices for others, including with cross-border implications. The current compromises in the French and German cases do not pose substantial issues to the integrity of the European single market and do not penalise non-energy-intensive domestic consumers excessively.
Topic:: Industrial Policy, European Union, Electricity, Price, and Energy Crisis
Political Geography:: Europe

446. NATO: Waging High-Tech Warfare

Author:: Yury Belobrov
Publication Date:: 01-2024
Content Type:: Journal Article
Journal:: International Affairs: A Russian Journal of World Politics, Diplomacy and International Relations
Institution:: East View Information Services
Abstract:: THE rapid technological progress observed in the last decade throughout the world, especially in China and Russia, threatens the established sources of military and industrial dominance of the collective West on the world stage. NATO views this as an alarming trend, and in an attempt to stop it, bloc members are making a determined effort to preserve their militarytechnological leadership and the international order structured around their policies. To this end, they are initiating a new arms race, partially through the active incorporation into the military sphere of the latest breakthrough technologies (Emerging and Disruptive Technologies – EDT), which, they believe, can reverse the emerging multipolarity of international relations and radically change the nature of future wars. Thus, the Allies are stepping up collective efforts to master innovative technologies and introduce them into the operational activities of NATO and all member nations to ensure their victory in future high-tech wars. They emphasize the urgency of adapting the armed forces of said countries to the realities of global technological advancement. As the communiqué adopted at the Alliance summit in Vilnius in 2023 directly stated: “We are accelerating our own efforts to ensure that the Alliance maintains its technological edge in emerging and disruptive technologies to retain our interoperability and military advantage including through dual-use solutions.”1 The US, as the main sponsor of NATO militarism, demands that its allies and partners closely and expeditiously collaborate on the creation of novel weaponry utilizing these emerging technologies and dramatically increase investment in various EDT projects and adapt their armed forces to them. Under the US’s diktat, Brussels and its American allies are creating new bureaucratic and financial entities. Private businesses and academic and research institutions are also being drawn into this sphere. To speed up this process, at the urging of Washington at the NATO summit in Brussels in 2021, a strategic initiative was launched to create the NATO Defense Innovation Accelerator for the North Atlantic (DIANA), which will manage and coordinate all this activity within NATO. The main task of this organization is to form an innovative technological network that unites R&D centers, innovative start-ups, defense enterprises, and military agencies in order to simultaneously and rapidly master all types of dual-use EDT technologies and implement them in the civilian and military fields. In addition to these efforts, a decision was also made to form a €1 billion NATO Innovation Fund to finance venture capital companies developing dual EDT in areas of strategic importance to NATO. Essentially, these decisions by the alliance are aimed at mobilizing European resources, primarily to strengthen American military power. Of course, the main efforts to field the latest technologies are being undertaken by the largest member nations.
Topic:: NATO, International Cooperation, Weapons, Innovation, Emerging Technology, High-Tech Wars, and Military and Industrial Advantage
Political Geography:: Russia, Europe, and United States of America

447. The Greek Tragedy: Narratives and Imagined Futures in the Greek Sovereign Debt Crisis

Author:: Jens Beckert and Hans Lukas Richard Arndt
Publication Date:: 04-2024
Content Type:: Working Paper
Institution:: Max Planck Institute for the Study of Societies
Abstract:: Between 2009 and 2015 Greece underwent a profound sovereign debt crisis that led to a serious political crisis in Europe and the restructuring of Greek debt. We argue that the prevalence of negative narratives about the future contributed to the changes in spreads of Greek bonds during the crisis. We support our argument by presenting results from text mining a corpus of 9,435 articles from the Financial Times and the Wall Street Journal. Based on sentiments and a machine learning model predicting future reference, we identify newspaper articles which generate negative and uncertain outlooks for the future in the expert discourse. We provide evidence from time series regression analysis showing that these negative imagined futures have explanatory power in models estimating spread development of Greek vs. German sovereign bonds. We suggest that these findings provide good evidence for the relevance of “imagined futures” for investors’ behavior, and give directions for an innovative contribution of sociology to understanding the microfoundations of financial crises.
Topic:: Debt, Financial Crisis, Financial Markets, Future, Sovereign Debt, Economic Sociology, Sentiment Analysis, and Valuation
Political Geography:: Europe and Greece

448. Talking Exports: The Representation of Germany’s Current Account in Newspaper Media

Author:: Andreas Maschke
Publication Date:: 01-2024
Content Type:: Working Paper
Institution:: Max Planck Institute for the Study of Societies
Abstract:: Contents 1 Introduction 2 Germany’s export-led growth model 3 Sustainability of growth models: Growth coalitions and public discourse 4 Analysing the discourse surrounding Germany’s current account surplus 5 Results Quantitative analysis Qualitative analysis 6 Discussion of results 7 Conclusion Appendix References
Topic:: Political Economy, Media, News Analysis, Economic Growth, and Discourse
Political Geography:: Europe and Germany

449. Conservatism and the Climate Crisis

Author:: Sam Hall, Pilita Clark, Rachel Coxcoon, and Robert Saunders
Publication Date:: 06-2024
Content Type:: Video
Institution:: Mile End Institute, Queen Mary University of London
Abstract:: The climate crisis poses new challenges to all parties and traditions, and will require the intellectual resources of both right and left to meet it effectively. In this event in May 2024, the Mile End Institute brought together Sam Hall (Director of the Conservative Environment Network), Pilita Clark (leading environmental journalist), Rachel Coxcoon (Director of ClimateGuide) and Dr Robert Saunders to explore what Conservatism can contribute to the climate debate. They explored the Conservative Party's record in government, the place of the environment in the Conservative tradition, and the challenges facing Conservative environmentalists at a time of growing political polarisation.
Topic:: Climate Change, Environment, Politics, Conservatism, Crisis Management, and Polarization
Political Geography:: United Kingdom and Europe

450. Remembering John Smith: His Legacy and Lessons

Author:: Robert Saunders, David Ward, Richard Johnson, and Dame Pauline Green
Publication Date:: 05-2024
Content Type:: Video
Institution:: Mile End Institute, Queen Mary University of London
Abstract:: The night before John Smith QC died in May 1994, he spoke at the Park Lane Hotel to raise money for the Labour Party's campaign for the next general election. To the 500 people in attendance, Smith remarked that 'the opportunity to serve our country—that is all we ask'. 30 years on from his death, Smith is often recalled as one of the 'best Prime Ministers we never had' and is still viewed with affection by many people regardless of their political views. However, in his own party, John Smith's legacy has often been more contentious. For supporters of the 'New Labour' project pursued by his successor, John Smith - as David Miliband told the Mile End Institute in May 2022 - failed to 'understand that in 1992 the electorate told us, in no uncertain terms, that they wanted a different offer from Labour'. On Thursday 9 May 2024, the Mile End Institute marked the 30th anniversary of John Smith's death by inviting a distinguished panel of historians and eyewitnesses to consider John Smith's legacy and lessons for the Labour Party today. Chaired by Dr Robert Saunders, it featured David Ward (John Smith's Head of Policy and Adviser from 1988 to 1994), Dr Richard Johnson (Senior Lecturer at QMUL), and Dame Pauline Green (former Chair of the Party of European Socialists).
Topic:: Politics, History, Labour Party, and John Smith
Political Geography:: United Kingdom and Europe

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COLUMBIA UNIVERSITY PRESS