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3121. EU-Africa: “Dealing” with Migration?

Author:
Matteo Villa
Publication Date:
10-2025
Content Type:
Special Report
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
This ISPI Report explores how European and African governments remain “stuck” in a policy limbo on migration – a limbo where political narratives collide with structural realities. Migration is not a passing emergency but a structural force linking the two continents. Yet policies swing between deterrence, externalization, and fragile bargains with transit states, while quietly expanding legal work channels. This paradox defines today’s EU-Africa migration regime: restrictive in rhetoric, somewhat expansive in practice, and fragile in results. Can Europe harden asylum while simultaneously widening labor visas? Can responsibility outsourced abroad ever replace solidarity within the Union? What happens when rights and accountability clash with opaque agreements? And why do irregular routes keep adapting, undermining every promise of control?
Topic:
Migration, Reform, European Union, Securitization, and Externalization
Political Geography:
Africa and Europe

3122. Measuring GDP at risk in the low-carbon transition

Author:
Dirk Schoenmaker and Willem Schramade
Publication Date:
08-2025
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
As sustainability challenges push economies into low-carbon transitions, the question arises of what share of GDP is exposed to transition? We develop a two-stage model to examine the share of GDP facing transition risk. The first stage examines which sectors are directly exposed to transition(s) and the second stage assesses the transition preparedness of the exposed sectors. Applying this model to the energy transition in the European Union, we find that Sweden and France have low shares of GDP facing transition risk, while Poland and Bulgaria have high shares of GDP facing transition risk. The main driver is a country’s carbon intensity, which we use as a proxy for transition preparedness. Our GDP-facing-transition risk model can inform policymaking. Countries can stimulate directed change towards low-carbon activities with a combination of taxes for high-carbon technologies and subsidies for low-carbon technologies. Moreover, countries can accelerate reallocation of labour towards low-carbon technologies and sectors by investing in education and retraining.
Topic:
Climate Change, GDP, Economy, Sustainability, and Carbon Emissions
Political Geography:
Europe

3123. Europe’s dependence on US foreign military sales and what to do about it

Author:
Juan Mejino-López and Guntram B. Wolff
Publication Date:
10-2025
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Worries about Europe’s dependence on the United States military industrial base have increased with the worsening security situation in Europe and the deterioration of the transatlantic relationship. With a new dataset covering all notifications under the US Foreign Military Sales programme since 2008, we show that Europe has substantially increased its purchases from the US defence industrial base during the last four years, deepening its dependence on US military equipment in the short to medium term. The dependence is particularly significant for high-tech equipment, including air defence, missiles and fighter jets, and for additional equipment and services included in purchases, such as advanced software and sustainment and modernisation required in future years. This strategic reliance on the US, even when the risks associated are low, provide the US with significant bargaining leverage over Europe that can potentially be used in different policy areas, such as trade. Moreover, the US military industrial base faces its own constraints and current and future US administrations might prioritise deliveries to Asia. In response, European policymakers must assess the extent of dependence on the US and develop a strategy on how to minimise the risks. At a time of rising defence budgets, it is crucial that European production of key weapon systems grows faster than demand, so that dependence on the US defence industrial base is gradually reduced. Policymakers should review critical technological dependencies, even for procurement directed at national producers, and should plan to upgrade Europe’s technological base without increasing external dependence. Learning from and cooperating with Ukraine to boost Ukrainian production is one important step. Establishing a timeline to determine the pace at which certain dependencies should be minimised is equally necessary. Europe also needs to reduce its reliance on structural strategic systems provided by the US, such as command, control and communications systems. Given the diverging strategic cultures across Europe, building consensus is of paramount importance. European companies need to grow to the scale that is only achievable in a larger market. Failing to implement a strategy risks Europe losing its freedom and autonomy.
Topic:
Security, Defense Policy, Industrial Policy, Science and Technology, Macroeconomics, Trade Policy, and Transatlantic Relations
Political Geography:
North America and United States of America

3124. What Germany’s medium-term fiscal plan means for Europe

Author:
Jeromin Zettelmeyer, Zsolt Darvas, and Lennard Welslau
Publication Date:
10-2025
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Germany’s July 2025 medium-term fiscal-structural plan exposes the tension between raising public investment in a low-risk country and the requirement in European Union fiscal rules for member state debt to comply with the 60 percent of GDP public debt ratio benchmark. Germany’s plan seeks to reconcile this tension by adopting overly optimistic GDP growth and inflation assumptions, and by proposing a large, backloaded fiscal adjustment. The European Commission endorsed the plan without rigorously assessing these assumptions. Under more realistic economic assumptions, both the budget deficit and the public debt would be significantly higher than the plan’s projections. Rather than beginning to fall by the end of the allowed seven-year adjustment period, German debt will likely continue to rise, even if Germany keeps its promise to sharply reduce expenditure growth after 2026. This outcome would be inconsistent with the EU fiscal framework, but not threaten the sustainability of German public debt, as the fiscal adjustment required to stabilise the debt would remain feasible. Germany will likely ultimately deliver the necessary consolidation, but over a longer period than foreseen by the EU rules. However, the Commission’s approval of the German plan establishes a precedent that could undermine the credibility of the EU’s fiscal framework. Other EU countries may cite the Commission’s leniency to justify higher expenditure growth not grounded in sound economic assumptions during the next round of national fiscal plan submissions in 2028, or even earlier through mid-term revisions. To prevent such an outcome, EU fiscal rules should be adjusted. The best option would be to permit low-risk countries with credible investment plans longer adjustment periods than the current seven-year maximum. Such a reform would result in a coherent system that ensures both debt sustainability and allows more public investment. The second-best option would be to raise the Treaty’s debt reference value from 60 percent to 90 percent of GDP. If neither proves politically feasible, technical adjustments to the debt sustainability analysis could still be made, but these would yield only marginal improvements.
Topic:
Governance, European Union, Investment, Fiscal Policy, and Public Debt
Political Geography:
Europe and Germany

3125. Tariffs, deals and multilateral ideals: can the World Trade Organization survive?

Author:
Petros C. Mavroidis
Publication Date:
10-2025
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
The second administration of United States President Donald Trump has shaken the foundations of the multilateral trading system by implementing unilateral tariffs on imports from most of its partners, and by signing ‘deals’ with a few of them. It is impossible to legally reconcile these actions with the letter and spirit of the World Trade Organization (WTO). The fundamental purpose of the WTO is to promote non-discriminatory trade liberalisation, primarily through the most-favoured nation (MFN) principle, while subjecting disputes to compulsory third-party adjudication (CTPA). The high, new US tariffs and so-called deals run afoul of MFN, CTPA and several other WTO legal institutions. The US view under Trump seems to be that legality should not stand in the way of political expediency when it comes to promoting US interests as understood by the current US administration. This is happening when the policy relevance of the WTO had already been undermined. Geopolitical concerns have turned its traditional consensus-based voting mechanism into a formidable impediment to block its legislative functions. Its adjudicative function has been moribund since 2019, when the first Trump administration took steps to make the WTO Appellate Body largely redundant. While the WTO still has offices in Geneva, the emerging disequilibrium is hardly sustainable. The WTO has been practically reduced to redundancy, at least with respect to influencing relations between the US and each of its partners. Assuming that current US policy does not change, the relevance of the WTO could wane further. Reviving the multilateral organisation will require a valiant effort from the key stakeholders, and the determination to address issues that the membership has previously avoided. This paper highlights some of them.
Topic:
Governance, Multilateralism, Trade Policy, Transatlantic Relations, and Global Economy
Political Geography:
North America and United States of America

3126. Advantages and pitfalls of green public procurement as a European strategic tool

Author:
Marie-Sophie Lappe and Francesco Nicoli
Publication Date:
09-2025
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Public procurement, or the purchasing of goods and services by governments, is among the most powerful policy tools available to the public sector. Accounting for nearly 14 percent of European Union GDP, it shapes markets, signals priorities and can in principle create demand for transformative innovation. Green public procurement (GPP), which aims to include environmental considerations in the procurement process, has been identified as an important lever to deploy public spending in line with the EU’s climate goals. In this paper, we examine GPP as a strategic tool to support the EU’s decarbonisation, industrial and geopolitical objectives, and assess it in context of the EU’s broader policy agenda. While we acknowledge the importance of GPP in the European decarbonisation process, we argue that its widespread use might also lead to policy tensions with the EU’s other strategic objectives, such as fiscal stability and strategic autonomy. Throughout the paper, we illustrate how the interplay of these goals leads to trade-offs that are very complex to accommodate. While procurement can empower and add financial weight to European actions aimed at achieving strategic goals, including decarbonisation, it can only be effective if the EU’s underlying strategic policy goals remain consistent with each other. Trying to fit procurement practices to multiple contrasting objectives might result in longer procurement timelines, less competition, more administrative burden and higher costs for governments. These risk hindering the effectiveness of European public administrations in delivering on the objectives, and also in their daily operations, disrupting the public administration’s purchasing practices. Finally, after having illustrated the potential benefits and pitfalls of green procurement, we discuss and evaluate several policy tools that could help the EU resolve the tensions that a widespread introduction of GPP might produce.
Topic:
Climate Change, European Union, Decarbonization, and Public Procurement
Political Geography:
Europe

3127. Climate risks to global supply chains

Author:
Madalena Barata da Rocha, Heather Grabbe, and Niclas Poitiers
Publication Date:
09-2025
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Extreme weather events are increasing in both intensity and frequency as climate change progresses. Understanding their impacts on the world economy thus takes on increased importance. While most extreme weather events are localised, their economic impacts reverberate through global supply chains (GSCs). The importance of this is widely recognised, but the potential scale of economic risks to GSCs from such ‘fast onset’ events is still poorly understood. In this paper we look at how past extreme weather events affected supply chains, and how the public and private sectors should prepare for and try to mitigate future shocks. We examine three distinct forms of disruption: lower manufacturing production due to natural disasters; reduced agricultural yields caused by floods and drought conditions; and damage to infrastructure and disruption of trade routes by climate conditions. In recent history, such events have had measurable effects, though limited by the diversified nature of global supply chains. Extreme events, such as the 2011 Thai floods or the 2022 drought affecting the Panama Canal, had measurable macroeconomic effects but remained short lived. As such events become more frequent and intense, the impact will become significantly larger and mitigation measures more important. To prepare for the future, businesses need to invest not only in a better understanding of the risks to their supply chains, but also in mitigation measures. For governments, it will become increasingly important to set the right incentives for companies to mitigate their risks. At the international level, as the example of the 2007-2008 global rice crisis showed, uncoordinated policy responses can strongly exacerbate the effect of otherwise manageable climate-related production shortfalls. This highlights the need for globally coordinated policies.
Topic:
Climate Change, Infrastructure, Economy, Manufacturing, Trade, Supply Chains, and Weather
Political Geography:
Global Focus

3128. COVID-19’s economic impact on low-income countries: preparing for the next shock

Author:
Niclas Poitiers and Costanza Greppi Maturana
Publication Date:
09-2025
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The COVID-19 pandemic sent shockwaves through global supply chains as borders closed, lockdowns went into effect and demand plummeted. This shock was felt particularly by low and lower-middle income countries with economies reliant on a limited set of exports. While some effects of this shock were more short-lived than initially feared, the pandemic nevertheless left a long-lasting mark on many of the countries most affected. Commodity prices dropped sharply as pandemic measures were enacted. This initial drop was a serious problem for developing countries that relied heavily on exports of those commodities, even after prices rebounded. Amid falling export revenues, their currencies depreciated and they faced problems financing imports of vital goods such as food staples and medicines. This, coupled with increased interest rates, caused issues in servicing debt denominated in foreign currency. Countries involved in textile manufacturing suffered from a breakdown of the supply chain caused by a drop in demand from advanced economies and closures of textile mills. This had severe consequences for the large labour force involved in textile manufacturing in low-income countries. Overall, countries with a more diversified export base and a wider set of destination countries weathered the storm better. When designing their near-shoring and friend-shoring strategies to deal with geopolitical risk, advanced economies should take into account the risks faced by low and lower-middle-income countries in term of lack of diversification.
Topic:
Financial Crisis, Trade Policy, COVID-19, and Emerging Economies
Political Geography:
Global Focus

3129. Gender wealth inequality in the European Union: a distributional perspective

Author:
Zsolt Darvas and Nina Ruer
Publication Date:
10-2025
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
This paper investigates gender-related disparities in wealth in European Union countries using the 2010-2021 waves of the European Central Bank’s Household Finance and Consumption Survey. To address the difficulty of within-household wealth allocation and provide a cleaner comparison of men and women’s wealth positions, we focus on single, never-married individuals aged 25-65, without dependants. A full-sample regression controlling for demographic, labour market and socioeconomic characteristics does not reveal a statistically significant gender wealth gap in the EU overall, or in most EU countries. When examining the wealth gap against wealth distribution, we find negligible gaps among the less wealthy. However, we find significant gaps among the middle class and the wealthiest individuals. This distributional disparity was barely visible in 2010 but had become pronounced by 2021, suggesting that gender-based wealth disparities have widened over time. Men are more likely to own property, operate businesses and invest in risky financial assets, which are all major drivers of wealth. By contrast, women hold more bank deposits and low-risk assets. Although women have higher educational attainment, which is typically associated with greater wealth, this advantage does not fully translate into financial outcomes. Finally, we document substantial cross-country differences, possibly shaped by cultural norms, institutional settings, labour market histories and inheritance regimes.
Topic:
Education, European Union, Employment, Microeconomics, Gender, and Financial Literacy
Political Geography:
Europe

3130. European exports in geopolitical storms

Author:
Niclas Poitiers, Madalena Barata da Rocha, and Nicolas Boivin
Publication Date:
09-2025
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
The global trading system is undergoing profound changes, and current developments in the US and China will have significant implications for the European economy. Both countries were at the heart of globalisation but are now becoming less dynamic export markets. Chinese economic growth is expected to slow down as pressures on the economy accumulate. In the United States, trade policy has taken a sharp inward turn. For the EU, these shifts point to structurally weakening demand growth from two of its largest trading partners, which together account for nearly 30 percent of all EU-generated value-added exports. However, in this paper we show that the growth of EU exports is driven to a much greater extent by demand in other markets, and we argue for a stronger policy focus on the 70 percent of EU value added in trade with other partners. While reduced demand from the US or China would pose challenges – especially for highly exposed sectors like pharmaceuticals – there remains substantial scope for the EU to diversify and expand trade with the rest of the world. The EU already has an extensive network of trade agreements, covering 74 percent of trade with partners other than the US and China. Deepening these relationships and forging new partnerships should be priorities. Offering a stable and rules-based trade regime can help offset losses from reduced integration with the US and China.
Topic:
European Union, Geopolitics, Trade Policy, and Transatlantic Relations
Political Geography:
China, Europe, and Asia