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41. CEOs in Europe: Business Conditions, the COVID-19 Crisis, and Beyond

Author:
Ilaria Maselli and Bart van Ark
Publication Date:
05-2020
Content Type:
Special Report
Institution:
The Conference Board
Abstract:
The Conference Board and ERT have established a collaboration to create a new measure of CEO Confidence for Europe. The Conference Board Measure of CEO Confidence™ for Europe by ERT for the first half of 2020 is 34 (on a scale from 0 to 100). The report examines the survey results including CEO views about business and economic conditions now, conditions in six months, and the prospects for their own industry. The negative sentiment among business leaders resulted from the dramatic impact of the COVID-19 crisis which delivered a severe supply shock to the economy in Europe and around the world.
Topic:
Economy, Business, and COVID-19
Political Geography:
Europe

42. The Recycling of Lithium-Ion Batteries: A Strategic Pillar for the European Battery Alliance

Author:
Raphaël Danino-Perraud
Publication Date:
03-2020
Content Type:
Special Report
Institution:
Institut français des relations internationales (IFRI)
Abstract:
Although it is still marginal, the market for electric vehicles (EVs) is growing. According to the French Institute of Petroleum and Renewable Energies (IFPEN, Institut Français du Pétrole et des Énergies Renouvelables), EVs accounted for a little more than 2% of the light vehicle market in 2019. This was up by 54% compared to 2018, but EVs still only represent 0.8% of the global car fleet. That said, the International Energy Agency (IEA) estimates EVs could make up between 15% and 30% of vehicle sales in 2030. However, while European manufacturers have so far developed EVs such as the Renault Zoé or the BMW i3, they are highly dependent on Asian companies for the supply and manufacture of materials for cells and electric batteries, such as nickel, cobalt, lithium used to build precursors, or cathodes and their components. Asia provides more than 90% of world car battery output, half of which comes from China alone. European dependence is not only related to the manufacture of batteries, but occurs throughout much of their value chain, from extraction and processing of raw materials to the preparation of necessary treatment processes for recycling. The recycling market for batteries from small electronic objects (smartphones, computers, tablets, etc.) has also been led by Asian countries.
Topic:
Energy Policy, Environment, Regional Cooperation, Science and Technology, Business, and Recycling
Political Geography:
Europe and European Union

43. Strategies to Strengthen Socially Responsible Public Procurement Practices in German Municipalities: A Mapping Exercise

Author:
Maximilian Müngersdorff and Tim Stoffel
Publication Date:
01-2020
Content Type:
Special Report
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Socially Responsible Public Procurement (SRPP) is a tool to use the market power of the public sector to trigger private companies to provide socially responsible products and services. In this sense, SRPP contributes to achieving SDG 12 of the Agenda 2030 (“Ensure sustainable consumption and production patterns”). However, while regulations at EU level and within the member states encourage SRPP, German municipalities lack effective implementation of social criteria in their tenders. This gap seriously decreases the triggering effect of the country’s procurement expenditures of which municipalities account for more than 50 per cent. By triangulating interview data with secondary literature, this paper identifies success factors and triggers for the introduction and consolidation of SRPP practices in German municipalities. Our research shows that there is not one gold standard of implementing SRPP in a municipality (as suggested by most existing toolboxes and handbooks on the topic). Rather, our paper presents a compilation of various different entry points from which practitioners may embark on fitting pathways. Beyond this, we have translated the most crucial success factors and triggers into nine recommendations for political action, for example, with regard to clear and ambitious regulations; measures to ensure broad support for SRPP within the municipal administration; and approaches for a more strategic procurement management. Our research also highlights the role played by individuals, that is, the importance of personal commitment for successful implementation of SRPP. This finding, however, is problematic when it comes to transferring and upscaling good practices. To reach a high level of broad and ambitious SRPP action, the balance between individual, regulatory and institutional measures has to change for the benefit of the latter two.
Topic:
Governance, Regulation, Business, and Private Sector
Political Geography:
Europe and Germany

44. Africa Increases Control over Natural Resources

Author:
Jędrzej Czerep
Publication Date:
11-2020
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
From October this year, new rules on the sale of cocoa beans entered into force, agreed between Côte d'Ivoire and Ghana—the crop’s two largest producers in the world—to ensure a profit for farmers. The agreement is an example of a departure from the raw material export model that is unfavourable to African producer countries. This change should increase the stability of African states. These processes will require a revision of the European business approach to Africa and the EU’s trade policy towards the continent.
Topic:
Agriculture, Natural Resources, European Union, Business, Exports, and Trade
Political Geography:
Africa, Europe, Ghana, and Côte d'Ivoire

45. Finding a European response to Huawei’s 5G ambitions

Author:
Valentin Weber
Publication Date:
05-2019
Content Type:
Policy Brief
Institution:
Norwegian Institute of International Affairs
Abstract:
This policy brief suggests that European countries should institute national reviewing boards overseen by intelligence agencies to vet Huawei equipment. If that is not feasible due to a lack of resources or capabilities especially among smaller countries, European governments should consider pooling resources and create a common reviewing board. This would also prevent duplication of efforts on national levels. European authorities should also demand from Huawei to clearly separate its international from its domestic business operations in order to further reduce the risk to the confidentiality, integrity, and availability of European mobile networks.
Topic:
Security, Science and Technology, Business, 5G, and Huawei
Political Geography:
China and Europe

46. Overcoming the Global Despondency Trap: Strengthening Corporate Accountability in Supply Chains

Author:
Alice Evans
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This paper re-examines why global collective action problems persist, and how to overcome them. Drawing on 140 interviews with campaigners, politicians, and businesses in 10 European countries, it suggests that many activists are stuck in a despondency trap. Never seeing radical reform, they lower their ambitions, and invest in more feasible but sub-optimal alternatives. This creates a negative feedback loop, in which the dearth of radical reform becomes self-fulfilling. But if reformists see advances at home and abroad, they may become more optimistic about collective mobilisation and break out of their despondency trap. This is shown by tracing the drivers of ground-breaking legislation. From 2018, large French firms must mitigate risks of environmental and human rights abuses in their global supply chains, or else be liable. This bill – the world’s first of its kind – was vociferously contested by businesses. But French campaigners and politicians persisted for four years, because they saw reasons for optimism. These include growing international support; public outcry; the French political culture (state intervention, and distrust of multinationals); together with a Centre-Left Government. Optimism galvanised relentless mobilisation. Legislative success in France then delivered a positive shock to activists across Europe, who were emboldened to launch similar campaigns and escape their despondency trap.
Topic:
Political Activism, Reform, Business, State, Multinational Corporations, Legislation, and Accountability
Political Geography:
Europe and France

47. Why do we need self-employed persons? Some economic reflections, mainly tax related ones

Author:
Adam Adamczyk, Leszek Morawski, and Jarek Neneman
Publication Date:
05-2019
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
For many years, we have been hearing about the need for innovation and entrepreneurship. Successive Polish government declare their support for entrepreneurs and expand the catalog of privileges, mainly related to taxes and mandatory contributions. Not infrequently, in these discussions the self-employed are equated with entrepreneurs. In this work, we will seek an answer to the questions: Who, then, are the self-employed? Are they really entrepreneurs? Should we support their activities? And finally the fundamental question: What does the economy get from the self-employed? In this work we point out that the differences in rates of self-employment between countries may result from differences in taxation on the labor provided by self-employed and salaried workers. In the main part of the work, taking advantage of the potential of the EUROMOD tax-benefit microsimulation model, we show that in Europe there is no single model of taxation of work conducted as one’s own business. In the majority of the tax-contribution systems we examined, the profitability of employment or self-employment changes along with changes in income. In light of the regressivity of the burdens on the self-employed, as a rule it begins to be profitable only above a certain income level. In the first part of the work we define the self-employed as those who run a business, and later we distinguish within this group entrepreneurs, meaning those who take on risk and create innovations. Discussing the advantages and disadvantages of self-employment from the point of view of the self employed and the employer, we point out that the benefits – including systemic (tax and contribution) benefits, outweigh the disadvantages. We also discuss in more detail the imposition of income tax on the self-employed. In the second part we present changes in the value of self-employment over the last 25 years. Here we use data from the World Bank and certain data points from the European Union Statistics on Income and Living Conditions (EU-SILC). They allow us to observe how the relationship between the self-employed and the economy is changing: The significance of services provided for other businesses is growing. Additionally, we can see that the significance of self-employment is falling. In Poland the level of (non-agricultural) self-employment is low. The dynamics of the rate of self employment indicate that the influence of legal regulations on the scale of self-employment is secondary. It seems that in this case, technological and demographic factors are much more significant.
Topic:
Demographics, Labor Issues, Employment, Business, Social Policy, Tax Systems, and Fiscal Policy
Political Geography:
Europe and Poland

48. Dynamic Interactions Between Financial and Macroeconomic Imbalances: A Panel VAR Analysis

Author:
Amat Adarov
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
We use Bayesian and GMM panel VAR frameworks to study interactions between financial cycles and macroeconomic imbalances based on a global sample of 24 countries spanning the period 1998‑2012. We find that financial cycles play an important role in shaping macroeconomic imbalances with expansions inducing economic overheating and a downward pressure on public debt-to-GDP ratios, and vice versa. Bank-based economies exhibit a deeper and faster response of business cycles to financial misalignments, while the impact in market-based economies is milder, but more persistent, as well as more significant for current account and public debt dynamics. Financial cycles invoke a particularly strong reaction of current account balances and especially public debt ratios in the euro area.
Topic:
Finance, Business, Economic Growth, and Macroeconomics
Political Geography:
Europe

49. Financial Cycles in Europe: Dynamics, Synchronicity and Implications for Business Cycles and Macroeconomic Imbalances

Author:
Amat Adarov
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Using dynamic factor models and state-space techniques we quantify financial cycles for twenty European countries over the period 1960Q1–2015Q4 capturing imbalances across credit, housing, bond and equity markets. The paper documents the existence of slow-moving and persistent financial cycles for all countries in the sample, many of which also exhibit high cross-country synchronicity. Spillover analysis points at the significant role the global financial cycle and a common latent region-specific factor, the European financial cycle, play in shaping national financial market dynamics. Estimations using Bayesian panel VAR models to assess interactions between external and internal macroeconomic imbalances suggest that financial cycles are an important driver of business cycles and public debt dynamics, with much stronger shock transmission observed in the euro area and systemic European economies.
Topic:
European Union, Finance, Business, Economic Growth, Macroeconomics, and Financial Stability
Political Geography:
Europe

50. Strong Firms, Weak Banks: The Financial Consequences of Germany’s Export-Led Growth Model

Author:
Benjamin Braun and Richard Deeg
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The financial foundation of Germany’s manufacturing success, according to the comparative capitalism literature, is an ample supply of long-term capital, provided to firms by a three-pillar banking system and “patient” domestic shareholders. This premise also informs the recent literature on growth models, which documents a shift towards a purely exportled growth model in Germany since the 1990s. We challenge this common assumption of continuity in the German financial system. Export-led growth, characterized by aggregate wage suppression and high corporate profits, has allowed non-financial corporations to increasingly finance investment out of retained earnings, thus lowering their dependence on external finance. This paper documents this trend and shows that business lending by banks has increasingly been constrained on the demand side, reducing the power – and relevance – of banks vis-à-vis German industry. The case study suggests a need for students of growth models to pay greater attention to the dynamic interaction between institutional sectors in general, and between the financial and the non-financial sectors in particular.
Topic:
Finance, Business, Banks, Institutions, and Corporations
Political Geography:
Europe and Germany