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2941. The Economic Risks of Transposing the EU Product Liability Directive in Germany

Author:
Oscar Guinea, Dyuti Pandya, and Vanika Sharma
Publication Date:
12-2025
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
With the Ministerial Draft (Referentenentwurf) dated 11 September 2025, Germany has embarked on transposing the EU Product Liability Directive (EU PLD) into national law, a step that goes beyond a mere regulatory update and could have far-reaching implications for its economic competitiveness. The most immediate impact will be felt within Germany’s Information and Communication Technology (ICT) industry, which stands as one of the largest in Europe. The Ministerial Draft broadens the definition of a “product” to include software, digital files, and services like AI systems, exposing ICT firms to greater liability risks. As companies prepare to minimise the risk of liability issues, compliance procedures will intensify, leading to higher operational costs. Furthermore, in some cases, the Ministerial Draft overlaps with existing regulations which fuels legal uncertainty and discourages innovation. Beyond the ICT industry, the Ministerial Draft poses risks to Germany’s broader manufacturing base. As digital technologies become increasingly embedded in the manufacturing process, any disruption in the ICT sector will directly affect other industries such as the automotive and medical technology sectors. The implementation of the Ministerial Draft in Germany’s new Product Liability Act may slow digital adoption and make the integration of these technologies more costly, ultimately hampering Germany’s industrial competitiveness. Critically, the Ministerial Draft significantly increases the likelihood of collective actions. By expanding liability to a wider pool of companies – including component suppliers, service providers, and even app developers – the Ministerial Draft amplifies the risk of mass litigation. In addition, both the previous deductible for property damage and the overall liability cap are eliminated. Moreover, the introduction of rebuttable presumptions of defectiveness which significantly lowers the bar for claimants, together with the introduction of evidence disclosure obligations – a notable procedural departure for German law – increases the potential for costly and time-consuming legal battles. To assess these costs, this Occasional Paper draws on empirical evidence from the US, where mass litigation has long been a challenge, to estimate the impact of collective actions on the German economy. While the implementation of EU PLD may not be the sole driver of increased mass litigation in Germany, it is undeniable that it will contribute to this trend. The presence of a well-developed ecosystem of lawyers, litigation funders and claims collectors – combined with a broader regulatory trend facilitating mass litigation in Germany, exemplified by the Consumer Rights Enforcement Act (VDuG) and its representative action mechanisms – makes the rise of representative- and collective actions a tangible economic risk. The economic costs of mass litigation are significant. Private enforcement costs, litigation expenses, and the potential slowdown of innovation all add up. The total cost could amount to billions of euros annually, with the risk of mass litigation diminishing the market value of innovative firms by as much as €10 billion. Such disruptions not only affect businesses but could also impact the wealth of German families, as pension funds and insurance portfolios are tied to the performance of these companies. The implementation of EU PLD may slow down Germany’s digitalisation efforts which would have an impact on the wider economy as ICT has become a cornerstone of Germany’s economic growth, and its role in the wider manufacturing sector is indispensable. The government has made strides to reduce bureaucracy and enhance competitiveness, but the Ministerial Draft may undermine these efforts by adding regulatory complexity and heightening legal risks. Policymakers must carefully weigh these economic consequences when they decide on how exactly they will transpose the EU PLD to avoid unintended setbacks that could hinder Germany’s future economic growth.
Topic:
European Union, Institutions, Industry, Single Market, and Product Liability Directive
Political Geography:
Europe and Germany

2942. Quantum Clusters: Ranking the World’s Deep-Tech Epicentres

Author:
Fredrik Erixon, Andrea Dugo, Dyuti Pandya, and Elena Sisto
Publication Date:
12-2025
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The ECIPE Quantum Project has so far laid the groundwork for understanding the global quantum landscape. It introduced the fundamentals of quantum technologies, assessed national activity in investment, scientific output, and patents, and charted international collaboration patterns to show that progress relies as much on shared expertise as on scientific breakthroughs. This work has now led to the next phase: identifying the innovation hubs within each country where meaningful quantum advances occur – what we call quantum clusters. Quantum R&D requires ultra-specialised, capital-intensive infrastructure that cannot easily be duplicated. The talent pool is also extremely scarce and concentrated in a small number of physics and engineering groups, creating inherent geographic bottlenecks. Combined with long pre-commercial timelines and immature supply chains, these constraints mean that genuine quantum innovation emerges only where specific capabilities and institutions co-locate. At the same time, the overwhelming complexity of the technology demands extensive inter-regional networking for knowledge integration. Therefore, the successful quantum cluster is not a self-contained hub, but the most effective node in a global and distributed network. This makes quantum clusters especially important for policies aimed at strengthening coordination across industry, research, and government, both locally and globally. This paper presents the first structured ranking of quantum clusters – not to reinforce narratives of supremacy, but to showcase high-performing regions, revealing where real capabilities lie and where gaps persist. This analysis offers a clearer basis for designing targeted policy interventions in investment attraction, talent development, and infrastructure planning. Viewing quantum through a cluster lens can help policymakers understand the external, institutional, and firm-level factors that shape quantum competitiveness, enabling more integrated strategies and stronger collaboration among stakeholders.
Topic:
Science and Technology, Innovation, Data, Emerging Technology, and Quantum Computing
Political Geography:
Global Focus

2943. Openness and Fragmentation in EU Defence Procurement

Author:
Lucian Cernat and Oscar Guinea
Publication Date:
12-2025
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Europe’s fragmented defence procurement markets undermine Europe’s security efforts. Larger procurement markets, by contrast, deliver sharper competition, lower prices, and stronger incentives for specialisation and technological progress. Using data from the EU’s Tender Electronic Daily (TED), this Policy Brief shows domestic bias in defence procurement: three-quarters of contracts go to national firms, and cross-border awards remain limited outside smaller member states. Two policy steps stand out. First, start small: open competition in non-sensitive products can deliver quick wins. Second, improve data: only around 10 percent of defence spending is captured in TED, far less than total procurement volumes. Better data would allow policymakers to track progress, close information gaps, and take better decisions.
Topic:
Defense Policy, European Union, Fragmentation, and Public Procurement
Political Geography:
Europe

2944. The Impact of Increased Mass Litigation in the UK

Author:
Oscar Guinea, Dyuti Pandya, Vanika Sharma, and Renata Zilli
Publication Date:
06-2025
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Over the past decade, the United Kingdom has seen a marked rise in collective litigation, transforming what was once a niche legal, rarely employed, tool into a fast-growing business model with wide-ranging economic implications. At a time when the country seeks to boost investment, support innovation and attract global business, the proliferation of mass litigation risks undermining these ambitions. This study takes a closer look at how mass litigation is reshaping the UK’s legal, business and regulatory landscape – and asks whether the balance between justice and economic efficiency is tipping too far. The UK stands out among European countries for the ease with which mass claims can be launched. It has long provided a favourable environment for consumer representation and dispute resolution, with a strong culture of accountability. But recent years have seen the emergence of a new ecosystem: law firms specialising in group actions; litigation funders offering upfront capital in exchange for a share of awards; and Claims Management Companies (CMCs) that recruit claimants en masse and process high volumes of cases. The business model has proved highly successful, making group litigation an asset class in its own right and pushing collective actions far beyond traditional sectors such as banking and pharmaceuticals. Today, a growing portion of the UK economy is in the firing line – with potentially damaging consequences. This shift has been rapid and striking. From fewer than 10 mass litigation cases in the late 2010s, the UK saw 47 such actions in 2024 alone, more than any other European country. On a per capita basis, the UK ranks as one of the most litigious jurisdictions in Europe, well ahead of comparable economies such as France or Germany. The implications for the UK economy are far-reaching: many of the companies targeted by these actions operate in sectors that were included in the UK Government’s latest industrial strategy as critical to the country’s future economic growth. Whereas previously limited to financial and professional services, mass litigation cases are now rising in UK companies working in life sciences, advanced manufacturing and digital services. These are industries where risk-taking, long product development cycles and data-driven innovation are the norm. The threat of mass litigation introduces uncertainty and cost at exactly the moment when these businesses need regulatory clarity and investment stability. Moreover, claims against public sector entities involve a direct transfer of capital from the tax payer to hedge fund litigation funders. The financial burden is also considerable. Legal fees and returns to funders often consume a large share of total settlements, reducing the compensation that actually reaches affected individuals. In the Post Office Horizon scandal, for example, £46 million in legal fees and funders payments were deducted from a £57 million settlement, leaving a paltry sum of just over £20,000 per claimant. In the recent judgment of Merricks v. Mastercard, £100 million have been allocated to compensate consumers. Affected individuals could receive up to £70 each if only 5 percent claim, but as little as £2.5 if the full class of 44 million comes forward. These figures raise questions about who really benefits from mass litigation. The limited benefits for individual consumers stand in stark contrast to the substantial costs that mass litigation imposes on the UK economy as a whole. Our scenario modelling shows that, under a scenario where the costs of mass litigation are just 30 percent of the current costs in the US, litigation costs in the UK could reach more than half of the claim value; the cost of mass litigation for the UK economy could reach close to £18 billion, and the market capitalisation of the UK’s most innovative companies could fall by £11.2 billion, more than half the announced public investment into R&D in the 2025 Autumn Budget. These financial pressures affect the whole country. While many large companies are headquartered in Greater London, their operations, and the jobs they support, are often spread across the wider regions. This means that the impact of a legal challenge is not just a concern for a corporate boardroom in London, but it impacts local economies and communities across the UK. As the Civil Justice Council reviews the framework for litigation funding, this study provides evidence to inform the debate. It does not argue against collective actions per se but urges a careful weighing of their benefits against broader economic costs. If the UK wants to remain an attractive destination for business, investment, and innovation, it must ensure that its legal infrastructure supports rather than stifles those ambitions.
Topic:
European Union, Institutions, Single Market, and Mass Litigation
Political Geography:
United Kingdom and Europe

2945. The Proposed EU Regulation for Standard Essential Patents: Chronicle of a Death Foretold

Author:
Fredrik Erixon, Oscar Guinea, and Dyuti Pandya
Publication Date:
09-2025
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This policy brief critically assesses the European Commission’s withdrawn proposal that would have overhauled the system of licensing and enforcing Standard Essential Patents (SEPs) in the EU. It was a proposal that, had it gone ahead, could have seriously undermined innovation in Europe’s digital economy and reduced the powerful role of Europe in developing key telecom standards. It would have caused legal confusion and unpredictability, which is why important courts and judicial institutions poured cold water on the proposal. Remarkably, it would have reduced European economic interest at a time when technology features prominently in geopolitical rivalry. SEPs, particularly those that underpin standards for advanced mobile communication, are the invisible infrastructure behind today’s digital world. They form the backbone of technical standards such as 5G and are increasingly used across sectors, from mobile networks to cars and household appliances. The Commission’s 2023 proposal aimed to tackle perceived shortcomings in SEP licensing, such as limited transparency, royalty stacking, and disputes over FRAND (Fair, Reasonable and Non-Discriminatory) terms. But instead of building on existing solutions, it introduced heavy-handed measures that risked destabilising a functioning system, potentially doing more harm than good, particularly for Europe’s competitiveness and technological leadership. The solutions offered in the SEP proposal are built on a framework that seeks to address issues by establishing a SEP registry, mandating a conciliation process, and introducing royalty benchmarking, all under the authority of the European Union Intellectual Property Office (EUIPO), the body responsible for managing EU trademarks and designs which would represent an institutional overreach. The policy brief highlights three key problems arising from the proposed SEP regulation. Heavy Administrative Burden: the proposed regulation would have required innovators to register their patents with the EUIPO, with lack of compliance potentially undermining their ability to enforce their rights. Despite imposing a substantial administrative burden, the registry would have only offered minimal practical value in resolving licensing disputes. Denial of Access to Justice: the regulation proposed a mandatory pre-litigation process for royalty disputes, effectively introducing a top-down pricing This approach would have disrupted the balance between patent holders and implementers, delay access to judicial remedies, and marginalise the role of the Unified Patent Court (UPC), undermining its purpose in adjudicating complex patent disputes. Flawed Agency Price Setting: the proposal envisioned the EUIPO, an agency lacking patent expertise recommending royalty caps for all patents within a given standard. This raised concerns about the agency’s qualifications to make such determinations and the risk of artificially suppressing prices, potentially harming leading European innovators and deepening the EU’s reliance on foreign technologies. At its core, the proposal reflected a broader misjudgement: heavy-handed regulation is ill-suited to the fast-moving, globally integrated SEP ecosystem. First, the pace of technological innovation far outstrips the speed of regulation. Second, technologies like 5G operate across borders, and any attempt to impose a standalone European framework not only risks fragmenting international licensing practices but also triggering a regulatory race among countries – each seeking to advance its own industrial policy objectives through divergent approaches. Third, regulation overlooked one of Europe’s key strengths: its role as a net exporter of innovation in key sectors such as advanced mobile communication. Fourth, regulation ignores how much progress has already been made through self-correcting mechanisms such as market-based negotiations, flexible licensing, and case law.
Topic:
Intellectual Property/Copyright, European Union, Patents, and European Commission
Political Geography:
Europe

2946. Breaking Barriers, Boosting Growth: Unlocking the Power of Digital Technology for Europe’s Competitiveness

Author:
Oscar Guinea, Vanika Sharma, Erik van der Marel, and Oscar du Roy
Publication Date:
09-2025
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Europe’s digital economy faces a twin challenge that strikes at the heart of its competitiveness: the continent still lacks homegrown tech champions on the scale of those in the United States or China, and digital technologies are not being fully embedded across its wider economy. Despite years of political focus on digital transformation, the uptake of essential tools – such as cloud services, enterprise software, digital advertising, and customer relationship systems – remains patchy across EU countries, sectors, and firm sizes. This combination of limited scale and sluggish diffusion is quietly undermining the EU’s economic resilience and national security. A major reason for this shortfall lies in the regulatory environment. EU firms navigate a complex web of rules shaped by national and EU-level regulations. Digital-specific obligations often impose heavy compliance costs while market access restrictions limit cross-border business growth. Meanwhile, inconsistent regulations across member states fragment the EU’s Single Market, raising barriers to economic development and draining returns on investment. The result is a constrained business ecosystem, where too few firms scale up and many are deterred from investing in new digital technologies. These regulatory choices carry a measurable economic cost. New empirical analysis in this Policy Brief shows that restrictive regulation, not only holds back firm expansion, but it also depresses digital adoption and, with it, sectoral performance. A 10 percent increase in the combined effect of services trade restrictions and digital technology uptake is associated with a 1.3 percent decline in value added. In other words, red tape is weighing down Europe’s productivity engine. This should be a wake-up call for EU policymakers. While much of the debate has focused on industrial policy and the regulation of emerging technologies like AI, too little attention has been given to fostering the conditions for widespread digital adoption. Yet, without structural reforms to reduce regulatory barriers – both within the EU and externally – and to support the diffusion of digital tools, Europe’s digital transformation will remain incomplete. And unless firms across all sectors are encouraged to adopt digital technologies as a means to scale and compete, the EU will risk falling further behind in the global race for technological leadership and competitiveness.
Topic:
European Union, Digital Economy, Competition, and Digital Technologies
Political Geography:
Europe

2947. NATO After the 2025 Summit: Strength, Doubt, and the Burden of Leadership

Author:
Tengiz Pkhaladze
Publication Date:
07-2025
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The NATO Hague Summit signalled renewed commitment to transatlantic security, with member states pledging historic increases in defence spending and a broader vision of resilience encompassing cyber, infrastructure, and societal domains. This shift signals more than adaptation; it suggests a serious intent to rearm NATO for a new era of strategic competition. Yet beneath the surface, the challenges are more complex than the headline commitments suggest. The Alliance’s ability to respond to hybrid threats and intensifying geopolitical competition is uneven, constrained by internal disagreements and shifting strategic expectations. NATO’s adversaries are not seeking parity through conventional force. They are exploiting gaps across domains – cyber, economic, political, and cognitive – using tactics designed to undermine cohesion and delay response. While the Alliance’s operational structures remain robust, its political coherence is fragile, and its strategic unity often proves difficult to sustain under pressure. What is missing is not capacity, but bold leadership willing to articulate shared priorities, accept risk, and take responsibility for long-range decisions. Without coherence of vision and the willingness to act with conviction, NATO’s deterrence posture risks becoming reactive rather than resilient. This paper argues that NATO now stands at a pivotal crossroads. Increased spending is a necessary step, but not a sufficient one. The Alliance still lacks a unifying strategy capable of addressing the full spectrum of contemporary threats. To meet this moment, the Alliance must move beyond rhetorical unity and procedural adaptation. It must invest in strategic foresight, develop doctrine fit for 21st-century warfare, and ensure political decision-making can match the speed and ambiguity of modern threats. The Hague Summit may have set a new trajectory, but it is what follows – doctrine, strategy, and credible action – that will determine whether NATO remains a force capable of deterring not just war, but instability itself.
Topic:
NATO, European Union, Transatlantic Relations, and Land Tenure Security
Political Geography:
Europe and North America

2948. Strengthening the Supply-Side Innovation in EU Telecommunications

Author:
Fredrik Erixon, Oscar Guinea, and Dyuti Pandya
Publication Date:
06-2025
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The telecommunications sector is central to the EU’s competitiveness, not only providing the infrastructure that underpins digital connectivity but also serving as a key driver of innovation. Recent EU reports already highlight the persistent structural challenges faced by the EU telecommunication sector: market fragmentation, low investment levels, divergent spectrum policies, and an urgent need to bolster digital sovereignty. However, a critical dimension in this discussion often receives far less attention: the supply of the underlying technologies that power telecommunications infrastructure. In this domain, EU companies remain competitive. In 2023, 27 EU-headquartered firms were among the world’s top 2,000 R&D spenders in telecommunications, accounting for 16 percent of global sectoral investment. These figures underscore that, while Europe may lag in investment and infrastructure, it still holds strategic leadership in telecom innovation and technology development. Central to Europe’s success are standard development organisations (SDOs), technical standards, and Standard Essential Patents (SEPs). SDOs provide collaborative forums where companies jointly develop technical standards that ensure interoperability, reduce fragmentation and foster innovation. Complementing this, SEPs protect the innovations embedded within these standards, granting European companies vital licensing revenues that sustain their research efforts. This system is particularly important for EU firms, which tend to be smaller than their global competitors; it enables them to specialise in cutting-edge technology development and commercialise their innovations globally without needing to dominate manufacturing or end-user markets. As competitiveness in telecommunications increasingly depends on the pace and adoption of innovation, the EU faces both a challenge and an opportunity. European firms have the potential not only to supply critical technologies but to drive breakthroughs in connectivity which are linked to the development of other technologies such as artificial intelligence (AI) or quantum technologies. However, to stay competitive, the EU must reinforce its position on the supply side, where its companies still operate at the technological frontier.
Topic:
European Union, Innovation, Supply, and Telecommunications
Political Geography:
Europe

2949. Mapping the Quantum Ecosystems: How Are Economies Positioning Themselves for Innovation Success

Author:
Fredrik Erixon, Andrea Dugo, Dyuti Pandya, and Elena Sisto
Publication Date:
09-2025
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Quantum technologies are among the most complex and promising innovations of our time. Their advancement relies not only on breakthrough science, but also on the capacity of countries, institutions, and companies to collaborate across borders, sectors, and disciplines, bringing together the expertise and resources needed to turn innovation into market-ready solutions. No country or region alone is in the lead – this is not a race between China and the US. Nor is quantum a development that will elevate one country to “supremacy” or “dominance”: cloaking fields of technology development in the terminology of military strategy rather risks making us less capable of understanding what is going on. For the economic and strategic benefits to be captured, countries and regions need to build structures of collaboration that allow researchers and companies to tap into frontier developments and share the costs of complex knowledge generation. An important way to measure the quantum competitiveness of countries is to benchmark the profile and strength of their collaborative structures. Using the ECIPE Quantum Database, this study analyses over 18,400 bilateral quantum partnerships involving more than 4,100 institutions across over 110 countries between 2018 and 2024. These partnerships encompass universities, research institutes, government agencies, startups, and large firms. Based on the findings these collaboration patterns reveal, we go a step further to not only map the interactions between different players but also identify a scheme of four quantum archetypes that help show where countries stand in the global quantum ecosystem. One dimension of this scheme reflects the level of industry involvement in quantum collaborations relative to a country’s GDP, serving as a proxy for commercial focus and economic prioritisation. The other captures how well-connected a country is internationally through direct quantum partnerships (see Figure a).
Topic:
Economy, Institutions, Innovation, Industry, Specialization, and Quantum Computing
Political Geography:
Global Focus

2950. Breaking Barriers to Cloud Customer Choice: Unlocking Europe’s AI and Innovation Leadership

Author:
Matthias Bauer, Andrea Dugo, and Dyuti Pandya
Publication Date:
07-2025
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Cloud computing underpins digital transformation and is essential for unlocking the benefits of artificial intelligence (AI), automation, and scalable digital services. Yet Europe continues to lag behind global peers in both cloud and AI adoption. This underperformance is not merely technological; it is structural and it is costly. Without rapid progress, the EU risks missing out on over EUR 1.2 trillion in GDP gains across the private sector by around 2030. In the public sector alone, a shift to cloud particularly via a multi-cloud-first strategy could generate up to EUR 450 billion annually in efficiency and productivity gains across EU governments. A major, yet under-recognised barrier is the lack of cloud customer choice, the ability for businesses and public sector users to freely select, combine, and switch between cloud services. Without this, users face high switching costs, vendor lock-in, and reduced capacity to scale or integrate AI tools effectively. This paper asks: What are the main obstacles to cloud customer choice in the EU and what are the best avenues for advancing it? The analysis focuses on three key domains that shape the market at large – regulation, competition policy, and standard-setting bodies – examining how each can promote broader customer choice rather than be used narrowly to target individual, innovation-driven firms.
Topic:
European Union, Innovation, Artificial Intelligence, Cloud Computing, and Consumer Behavior
Political Geography:
Europe

2951. Seeing the Forest and the Trees: Recent Developments in the US Tariff Landscape

Author:
Lucian Cernat
Publication Date:
09-2025
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This short factual overview paper describes the complexity created by the tariffs imposed by the US, especially for small and medium enterprises (SMEs). The Policy Brief concludes by highlighting the importance of the EU “Access2Market” tool in addressing these new complexities, helping EU exporters gain access to the US market.
Topic:
Markets, European Union, Economy, Tariffs, and Micro-Small-Medium Enterprises (MSMEs)
Political Geography:
Europe, North America, and United States of America

2952. Mass Litigation and the Future of Litigation Funding in Ireland and Europe

Author:
Oscar Guinea, Dyuti Pandya, Vanika Sharma, and Renata Zilli
Publication Date:
10-2025
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Across Europe, collective actions are on the rise. Expanding liability regimes and the rapid growth of third-party litigation funding (TPLF) are fuelling a new wave of lawsuits that reach far beyond traditional consumer claims. Ireland has until now been shielded by common law restrictions on TPLF, but that protection is weakening. The transposition of the EU Representative Actions Directive (RAD) opens the door to new collective claims, including those backed by commercial funders that invest in such litigation in order to make a profit. Ireland is uniquely exposed to these developments. Its economic model relies heavily on foreign direct investment, particularly from the US. Of more than 460 collective action cases tracked in the EU over the past 18 years, 40 involved US companies, many of which operate their European headquarters from Ireland. Information and communication technology and life sciences sectors, two of Ireland’s most important economic engines, are among the most frequent targets of collective lawsuits. If the conditions for launching a collective action and granting access to TPLF become too favourable, Ireland – the only EU country with common law procedures, broad disclosure rules and English-language litigation could become an attractive venue for mass litigation. The supposed benefits of mass litigation are, in practice, limited. Evidence from the US and UK shows that consumers rarely receive meaningful compensation. Lawyers and funders capture the bulk of settlements, while claimants often receive token amounts. By contrast, the costs are large and measurable: higher legal expenses, falling market valuations, and weaker incentives for innovation. For Ireland, the scenario analysis suggests potential economic costs in the billions of euros, exceeding the annual public budget for infrastructure. The negative impact is not confined to domestic cases: collective actions pursued elsewhere against firms headquartered in Ireland also ripple back to the Irish economy through lost growth and reduced investment. These risks cannot be managed through national policy alone. The RAD’s cross-border provisions and the free flow of capital mean that litigation funding can reach Irish courts even if TPLF remains restricted domestically. This underlines the need for a coherent EU-wide framework. The European Parliament and more recently the UK Civil Justice Council (CJC) have called for tighter oversight, including transparency rules, limits on funder returns, judicial scrutiny of funding contracts, and liability for costs if cases fail. Minimum standards cannot be achieved by member states acting alone. Ireland has a chance to lead. As the incoming holder of the EU Council Presidency from July 2026, it will be well positioned to put the regulation of TPLF on the European agenda. A robust framework would not only protect consumers but also safeguard Europe’s competitiveness, reduce the risk of forum shopping, and ensure that litigation funding enables the delivery of justice rather than financial speculation via the courts. For Ireland, the stakes are high: the country has the most to lose if unchecked mass litigation undermines foreign investment and innovative industries upon which its prosperity rests.
Topic:
European Union, Regional Economy, Liability, and Mass Litigation
Political Geography:
Europe and Ireland

2953. Memo to Ursula von der Leyen and António Costa: Make the Right Priorities for the EU-CELAC Summit 2025

Author:
Renata Zilli
Publication Date:
10-2025
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The EU–CELAC Summit in Santa Marta, Colombia, in November comes at a time when both regions need to get down to business. The EU-CELAC cooperation has long offered both sides opportunities to advance their economic and strategic interests, but so far, they have not used them. Past summits have rarely moved beyond lofty declarations and have not matched the level of expectations. Since the first Rio Summit in 1992,[1] successive joint meetings between the two regions have highlighted shared values and cooperation on democracy, economic development, and sustainability. Yet, two decades of summitry have not yielded the tangible progress that citizens and businesses expect. In a world of heightened geopolitical rivalry, technological disruption, and recurring supply shocks, Europe and Latin America should make a deeper investment in their relationship. For the European Union, reducing overdependence on a small number of suppliers has become a strategic priority. For Latin America and the Caribbean, diversifying trade and investment partners is essential to avoid being squeezed between the US and China in their strategic competition. A forward-looking agenda on trade and economic security can transform EU–CELAC relations into a strategic Atlantic partnership. This agenda should prioritise: Deepening EU-CELAC economic security cooperation to mitigate supply chain shocks and the weaponisation of economic dependencies through trade diversification. Promoting the integration of regional value chains by fostering diversified comparative advantages across CELAC countries, enabling each to specialise in different segments of production. Funding digital infrastructure: Utilise the EU-LAC Global Gateway Investment Agenda to plug investment gaps, specifically in digital transformation. Completing trade agreement implementation: Use the cooperation to propel the full implementation of Association and Trade Agreements between the EU and CELAC partners, and accelerate the ratification of signed agreements while pushing ongoing processes like the modernisation of agreements with Mexico Make the EU-CELAC cooperation a springboard for a “Coalition of the Willing” for a rules-based international trade. [1] The first high-level meeting between the European Community and Latin American and Caribbean countries took place in 1999, launching the EU–LAC Strategic Partnership. This dialogue evolved into the current EU–CELAC framework in 2013, when the Community of Latin American and Caribbean States became the EU’s formal counterpart, giving the relationship a more structured and political foundation
Topic:
Security, European Union, Economy, and Trade
Political Geography:
Europe, Latin America, and Caribbean

2954. A new kind of cognitive tool: Generative AI and the future of critical and creative thinking in education

Author:
Dominique Kelly and Jacquelyn Burkell
Publication Date:
10-2025
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
Since the 2022 release of ChatGPT, students have increasingly embraced the use of generative artificial intelligence (AI) in their schoolwork. These tools threaten to fuel misinformation and plagiarism; however, we contend that a deeper concern lies in how students’ use of generative AI could affect their cognitive development. Students can now offload tasks to generative AI that, if completed independently, would require them to build and exercise higher-order cognitive abilities (i.e., critical and creative thinking). Thus, we argue that repeated cognitive offloading through generative AI could hinder the development of students’ fundamental skills and undermine the core aims of educational institutions. We begin by comparing generative AI to two other cognitive tools – calculators and navigation systems – and explaining how the nature of work AI can perform differs from the nature of work that can be offloaded to these prior technologies. We then examine how the use of generative AI could impede the development of higher-order cognitive abilities in three educational use cases: essay writing, idea generation, and explanation of complex concepts. Lastly, we offer practical recommendations for educators concerning generative AI’s role in education. We suggest that educators delay students’ use of generative AI as a cognitive tool for complex tasks until the later stages of their schooling. At the same time, we note that educators could design activities that require students to interact with generative AI as a dialogue partner that asks questions, offers varied perspectives, and challenges assumptions – with potential to support, rather than hinder, students’ cognitive development.
Topic:
Education, Artificial Intelligence, Critical Thinking, ChatGPT, and Generative Models
Political Geography:
Global Focus

2955. What About Us? Consumer Response to the Digital Markets Act

Author:
Matthias Bauer and Dyuti Pandya
Publication Date:
10-2025
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The Digital Markets Act (DMA) was introduced as a landmark piece of EU legislation to change how consumers interact or engage with large online platforms. By restraining the power of the so-called gatekeepers, Brussels aimed to promote greater competition, improve privacy protections and make digital services more affordable. Two years into its application, however, the reality on the ground in EU, especially for the Central and Eastern European (CEE) Member States has proved far more sobering. Consumers have seen little evidence of cheaper or improved digital services. Many report greater friction in their online experience, while confidence and trust in platform privacy remains low. Most strikingly, consumer behaviour itself has hardly shifted: reliance on a handful of dominant players such as Google, Meta, and Apple still prevail. These findings suggest that the DMA, while ambitious in scope, has failed to deliver on its central promise of empowering Europe’s digital citizens. This study concludes that Europe must either consider replacing the DMA with a more flexible case-by-case enforcement or, at the very least, reform it by removing obligations that neither enhance consumer welfare nor improve market contestability.
Topic:
European Union, Regional Economy, Digital Markets Act (DMA), and Consumer Behavior
Political Geography:
Europe

2956. Privacy at a Price? An Empirical Analysis of GDPR’s Impact on EU Trade Flows

Author:
Elena Sisto and Erik van der Marel
Publication Date:
10-2025
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The introduction of the EU’s General Data Protection Regulation (GDPR) in 2018 created conditions that could raise the cost of trading services with the EU, especially where cross-border transfers of personal data are required. This paper examines whether the GDPR has truly affected trade in digital services between EU member states and third countries. Using a triple-difference strategy that compares EU trade with partners whose cross-border transfer regimes differ from the EU’s conditional model to a suitable control group, this paper accounts for the fact that, over time, many partners have adopted a similar conditional model (so-called spillovers), following the phenomenon known as the “Brussels effect.” Identification relies on two elements: sectoral data intensity, measured by the share of firms in each sector participating in the EU-US Data Privacy Framework (DPF), and partner regime alignment, distinguishing EU-style conditional regimes from non-aligned regimes. We estimate a structural-gravity PPML model with high-dimensional fixed effects, complemented by robustness checks using input-output-based intensity measures and a non-gravity triple difference on growth.
Topic:
European Union, Privacy, Trade, and GDPR
Political Geography:
Europe

2957. The Challenges of Reconstruction and Recovery: The Day After the War and the Future of Youth in Gaza

Author:
Ali Abdel-Wahab
Publication Date:
12-2025
Content Type:
Working Paper
Institution:
Pal-Think For Strategic Studies
Abstract:
Palestinian youth constitute a vital segment of society, representing approximately 22% of the total population. They live under the weight of chronic political deadlock, a dependent economy, and shrinking civil space. In other words, they are stuck in a constant struggle to redefine their identity and status according to the balance of power and the imposed political reality. In the Gaza Strip in particular, where the burden of the blockade that has been in place since 2007 coincides with modern colonial domination and internal political marginalization, a new generation has grown up knowing nothing but political isolation and division. This generation, which is ambitious and highly educated (unemployment among university graduates reached about 74% before the war), found itself shackled by a stifling economic reality and a political dead end, which eroded its confidence in the political system and its traditional structures. These circumstances produced a strong tendency toward “individual salvation,” with about 37% of young people seriously considering emigration in search of dignity and opportunities lost at home. The recent war, which has been waged on the Gaza Strip since October 2023, was not merely a military escalation, but a systematic military operation aimed at destroying both infrastructure and society, exacerbating existing crises to catastrophic levels. The 2023 war transformed the situation from a chronic crisis to one of total destruction of the urban, educational, and social infrastructure, with hundreds of thousands of displaced persons, the destruction of most universities and schools, and the emergence of the largest generation of people with disabilities in the modern history of Gaza. Thousands of young people have fallen victim, living under the weight of unprecedented collective psychological trauma and educational disruption that threatens to squander human capital. This tragic situation has transformed the issue of youth from a mere developmental challenge to a matter of national, social, and existential security.
Topic:
Reconstruction, Youth, Recovery, Post-Conflict, and 2023 Gaza War
Political Geography:
Middle East, Palestine, and Gaza

2958. Preventing Crises in the Post-War Phase: Engineering Transitional Stability in Palestine Between International Recognition and Gaza Reconstruction Plans

Author:
Ali Abdel-Wahab
Publication Date:
10-2025
Content Type:
Working Paper
Institution:
Pal-Think For Strategic Studies
Abstract:
After a long and devastating war, Palestine stands at a critical crossroads that demands not only reconstruction but also a fortification of its future. The war has left Gaza in ruins—massive human and material losses, with thousands killed, tens of thousands injured, and widespread destruction of homes and essential infrastructure. Joint assessments by the United Nations, the World Bank, and the European Union estimate material damage in Gaza at around USD 30 billion, alongside USD 19 billion in economic losses due to the near-total halt of production and services. The most severely affected sector was housing (53 percent of total damage), followed by commerce and industry (20 percent), and then critical infrastructure—health, water, and transport—accounting for over 15 percent. Consequently, Gaza’s economy has nearly collapsed: prices have risen by more than 300 percent within a year, and the Strip—home to 40 percent of the Palestinian population—now contributes barely 3 percent to the national GDP. Public institutions, already fragile, have been unable to maintain basic services. Continuous power outages, water disruptions, and loss of connectivity have pushed systems to the brink. Gaza’s sole power plant has been completely non-functional since 11 October 2023, while most high-voltage feeder lines from Israel have been destroyed. Residents have been forced to rely on small diesel generators and solar micro-systems—both hindered by fuel shortages and combat damage. According to UN data, large portions of Gaza’s water and sanitation systems are out of service, solid waste has accumulated, and the risk of epidemics has grown sharply.
Topic:
Reconstruction, Institutions, Post-Conflict, and 2023 Gaza War
Political Geography:
Middle East, Palestine, and Gaza

2959. Pathways to Peacebuilding and the Promotion of Democracy and Civil Peace in Palestinian Society: Mechanisms and Strategies in the Recovery Phase (Mechanisms and strategies during the recovery phase)

Author:
Mansour Abu Karim
Publication Date:
08-2025
Content Type:
Working Paper
Institution:
Pal-Think For Strategic Studies
Abstract:
Over the past years, Palestinian society has experienced a state of instability resulting from the failure of the political settlement process, the internal Palestinian division, and the recurrence of wars as well as political, security, and economic crises. These factors have led to significant political and societal structural distortions, leaving profound repercussions on the Palestinian democratic experience and civil peace. This reality calls for the adoption of new policies and approaches to strengthen the process of building internal peace, protecting civil peace, and promoting a democratic approach in Palestinian society. ­­­­­­­­­­­­­­­­This paper addresses the pathways to building internal Palestinian peace, promoting democratic practices, and safeguarding civil peace during the recovery phase. It is organized into three main themes: the first provides a conceptual framework for peace, democracy, and civil peace; the second examines the key components of peacebuilding, democracy, and civil peace in Palestinian society; and the third explores mechanisms and policies for protecting the internal Palestinian front, resolving crises and disputes, and preserving political and social pluralism.
Topic:
Democracy, Armed Conflict, Peacebuilding, and Civil Peace
Political Geography:
Middle East and Palestine

2960. Displacement, Temporary Survival, and the Transformation of Social Bonds: How War Reshapes Community Networks and Collective Behavior in Gaza

Author:
Pal-Think for Strategic Studies Research and Studies Unit
Publication Date:
08-2025
Content Type:
Working Paper
Institution:
Pal-Think For Strategic Studies
Abstract:
This paper aims to analyze these disruptive transformations in depth and impartially for the benefit of policy experts, decision-makers, humanitarian actors, and civil society as a whole. The paper reviews the background of Gazan society before the war, then details the manifestations of social fragmentation (family, class, spatial) and their impact on women, children, and the most vulnerable groups in particular. It also addresses the conditions in shelters as hotbeds of tension, violence, and inequality. Finally, the paper offers realistic policy recommendations for dealing with this disruptive reality in the long term, focusing on rebuilding the social contract and supporting psychological and community recovery, rather than merely offering vague rhetoric about community resilience.
Topic:
Displacement, Networks, Resilience, Society, Fragmentation, and 2023 Gaza War
Political Geography:
Middle East, Palestine, and Gaza