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11. Reforming European Economic Policies

Author:
Olivier Marty and Damien Ientile
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
Despite the European Union's ambitious response, the current crisis is a stark reminder of a nagging problem: the challenge, in practice, to the principles and concepts governing major European economic policies. This situation can be seen in monetary policy, budgetary rules, trade policy, competition, the European budget and the structure of the euro zone. It fuels resentment between Member States and populations and, paradoxically, it encourages economic divergence. It is also undermining the legibility and credibility of European action in the eyes of the public. It therefore would seem advisable to reform the European economic framework in a pragmatic rather than radical way.
Topic:
Reform, Budget, Economic Policy, and Trade Policy
Political Geography:
Europe

12. Adapting to change: Time for climate resilience and a new adaptation strategy

Author:
Marco Giuli, Annika Hedberg, and Sofia López Piqueres
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
European Policy Centre (EPC)
Abstract:
Even if we were to radically change our behaviours and economic policies now, it wouldn’t be enough to stop all of the economic, societal and environmental impacts of climate change. The EU and its member states need to start thinking seriously about how our societies will adapt to this new reality. Climate mitigation alone will not be enough to stop the dramatic effects of climate change and will have to go hand in hand with adaptation efforts. That is the sobering reality European decision- and policymakers need to keep in mind when developing climate action measures. Given the close interconnections between ecosystems, people and economies in a globalised world, there are strong reasons for EU member states to join forces, pool risks and cooperate across borders. This paper, therefore, calls on the EU to mainstream adaptation and shift its focus from reacting to disasters to a more proactive approach that prioritises prevention, risk reduction and resilience building. During the presentation of the new EU climate law yesterday, European Commission President von der Leyen hinted that member states would be required to develop and implement strategies that do just that.
Topic:
Climate Change, European Union, Economic Policy, and Resilience
Political Geography:
Europe

13. The European Banking Union

Author:
Pery Bazoti
Publication Date:
08-2019
Content Type:
Policy Brief
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The decade of the economic crisis has highlighted in the most apparent way the flaws and weaknesses in the original architecture of the Economic and Monetary Union as well as the need for decisive reforms. In this effort, the European Banking Union constitutes one of the most ambitious projects of the European Union with the intention of establishing a single system of banking supervision and resolution based on a common regulatory framework. The three pillars of the banking union, analysed in the present policy brief- the Single Supervisory Mechanism, the Single Resolution Mechanism and the European Deposit Insurance Scheme– not only safeguard the banks against future financial crises but also ensure that their potential resolution will not be at the expense of the European taxpayers. Yet, there are also significant challenges that come with the establishment of the banking union; the lack of agreement on a system of risk sharing among the member states has, so far, hindered the creation of the third pillar, the European Deposit Insurance Scheme. Moreover, the new dual role of the ECB, in monetary policy and in banking supervision, and the tendency of banks to buy domestic government debt, raise questions about the efficacy of the European Banking Union under its current design.
Topic:
Government, European Union, Banks, and Economic Policy
Political Geography:
Europe

14. Deeper Regional Integration and Global Value Chains

Author:
Nakgyoon Choi
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Recently, international trade has become regional rather than global. This paper aims to test if deeper regional integration contributes to the organization of global value chains along the regional clusters including Asia, Europe, and America. We estimate the impacts of deep regional integrations on global value chains by region, investigating the implications of mega FTAs for global value chains by scenario. We use not only data on trade in value added but also global value chains participation indexes which reflect the global value chains better than domestic value added in goods and services exports. The estimation results reveal that a deep regional trade agreement has heterogeneous effects on global value chains depending on the regional clusters. In particular, Asia turns out to import more intermediate goods than Europe and America while RTA member countries tend to import more intermediate goods from Europe than Asia and America.
Topic:
International Trade and Finance, Regional Integration, Economic Policy, and Exports
Political Geography:
Europe, Asia, Global Focus, and North America

15. The Global Impact of Brexit Uncertainty

Author:
Tarek A. Hassan, Laurence van Lent, Stephan Hollander, and Ahmed Tahoun
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Using tools from computational linguistics, we construct new measures of the impact of Brexit on listed firms in the United States and around the world: the share of discussions in quarterly earnings conference calls on costs, benefits, and risks associated with the UK’s intention to leave the EU. Using this approach, we identify which firms expect to gain or lose from Brexit and which are most affected by Brexit uncertainty. We then estimate the effects of these different kinds of Brexit exposure on firm-level outcomes. We find that concerns about Brexit-related uncertainty extend far beyond British or even European firms. US and international firms most exposed to Brexit uncertainty have lost a substantial fraction of their market value and have reduced hiring and investment. In addition to Brexit uncertainty (the second moment), we find that international firms overwhelmingly expect negative direct effects of Brexit (the first moment), should it come to pass. Most prominently, firms expect difficulties resulting from regulatory divergence, reduced labor mobility, trade access, and the costs of adjusting their operations post-Brexit. Consistent with the predictions of canonical theory, this negative sentiment is recognized and priced in stock markets but has not yet had significant effects on firm actions.
Topic:
Economics, Political Economy, Regional Cooperation, Brexit, Global Political Economy, and Economic Policy
Political Geography:
Britain, United States, United Kingdom, Europe, and European Union

16. The Impact of the State on the Quality of an Economic System: A Cross-Country Analysis

Author:
Maciej Bałtowski and Piotr Kozarzewski
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
The paper discusses the role of the state in shaping an economic system which is, in line with the welfare economics approach, capable of performing socially important functions and achieving socially desirable results. We describe this system through a set of indexes: the IHDI, the World Happiness Index, and the Satisfaction of Life index. The characteris-tics of the state are analyzed using a set of variables which describe both the quantitative (government size, various types of governmental expenditures, and regulatory burden) and qualitative (institutional setup and property rights protection) aspects of its functioning. The study examines the “old” and “new” member states of the European Union, the post-communist countries of Eastern Europe and Asia, and the economies of Latin America. The main conclusion of the research is that the institutional quality of the state seems to be the most important for creation of a socially effective economic system, while the level of state interventionism plays, at most, a secondary and often negligible role. Geographical differentiation is also discovered, as well as the lack of a direct correlation between the characteristics of an economic system and the subjective feeling of well-being. These re-sults may corroborate the neo-institutionalist hypothesis that noneconomic factors, such as historical, institutional, cultural, and even genetic factors, may play an important role in making the economic system capable to perform its tasks; this remains an area for future research.
Topic:
Demographics, Economy, Economic Growth, State, Economic Policy, Institutions, Trade, and Welfare
Political Geography:
Europe, Eastern Europe, Asia, Latin America, and European Union

17. An Expanded View of Government’s Role in Providing Social Insurance and Investing in Children

Author:
Sandra E. Black and Jesse Rothstein
Publication Date:
01-2019
Content Type:
Policy Brief
Institution:
Economics for Inclusive Prosperity (EfIP)
Abstract:
While private provision of goods often yields the efficient outcome, there are a number of goods that are not efficiently provided in the private market. Here, we outline two such situations: investments in child care and education, and insurance against risks created by business cycles, poor health, and old age. Because private markets work poorly for these goods, and the costs of market failure are large, standard economic reasoning implies a significant role for government provision. The reduction in economic insecurity that this would bring could help to improve political stability as well, by reducing the stakes that people perceive in discussions of trade, immigration, technological change, and countercyclical policy (Inglehart and Norris, 2016). Many observers (e.g, Hacker, 2018) have pointed to economic anxiety as a potential contributor to populist reactions in the U.S. and many European countries; a public sector that acts to reduce the risk that households face could ameliorate this, generating political spillovers and improving the state of the country more broadly.
Topic:
Economics, Education, Health, Health Care Policy, Children, Economic Policy, and Economic Theory
Political Geography:
United States and Europe

18. Europe Is the Key Player in Syria: An Alternative Template for Transition

Author:
Bassma Kodmani
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
As long as military means prevailed in deciding the fate of Syria, the European Union could not alone induce any decisive change in the dynamics of the conflict, and Assad was vindictively seeking to prove that the European Union’s ability to influence the conflict was nil. Assad’s luck was that Putin was determined to prevent his fall and threw his full weight behind him to maintain his rule. When the guns finally fall silent, should the key countries of Europe and the EU itself simply accept as “a sad reality” the fact that the Syrian regime is back in full control of the country? Will they channel funds for humanitarian, post-emergency and early recovery purposes through the State’s financial system knowing full well that European tax payers’ money might be massively diverted to end in the pockets of Assad’s family and the kleptocracy around him,1 and serve to pursue his sectarian scheme of changing the demographics of Syria along religious and ethnic lines? Framing the discussion in terms of accepting Assad and rehabilitating him or not is disempowering for the EU. It assumes that military force alone is what determines the outcome of the conflict and the political fate of the country. If it follows this rationale, Europe would be annihilating everything it stands for; it would serve as a helping hand in Assad’s strategy to bury the civil society groups it helped organize and silence the democratic forces and all those within the different sectors of society who want a Syria that resembles Europe in terms of its values and its political system on the other side of the Mediterranean. The EU’s declared position that there will be no reconstruction without political transition in Syria is an honorable one, but this position still needs to be operationalized if the EU is to turn it into a policy and use its full clout to shape the resolution of the conflict.
Topic:
Europe Union, Humanitarian Intervention, Military Intervention, and Economic Policy
Political Geography:
Africa, Russia, Europe, and Syria

19. The Strategic Potential of the Emerging Wider European Economic Area

Author:
Michael Emerson
Publication Date:
02-2018
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Critical, independent evaluations of the current European Neighbourhood Policy have not been dissipated by a recent review of the policy. At the same time, however a new reality has emerged, which the author of this paper suggests might be called the Wider European Economic Area (WEEA). This area covers the EU, EEA/EFTA states, the Balkans, and the East European states that now have Association Agreements (and DCFTAs) with the EU. This comprehensive map of all of Europe, with the exception of the Russian-led Eurasian Economic Union, already has a growing and impressive array of common economic instruments at its disposal. A few South Mediterranean states also participate in certain areas. This CEPS Policy Insights paper argues that this seemingly endogenous process deserves to be advanced more explicitly by the EU in a WEEA initiative, which could be launched by a ‘green paper’ from the EU institutions and supported by soft institutionalisation with a policy forum. Further possible extensions of the process are also discussed, notably the conditions under which there might be cooperation with the Eurasian Economic Union, and linkages to the Chinese-sponsored new Silk Road. A WEEA initiative could well complement current thinking about giving renewed impetus to the EU’s own integration, including ideas under the broad heading of a multi-speed Europe.
Topic:
Treaties and Agreements, European Union, Economic Policy, and Regional Politics
Political Geography:
Europe, Eastern Europe, and Balkans

20. Critical Political Economy

Author:
Bastiaan van Apeldoorn
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
The Kolleg-Forschergruppe (KFG)
Abstract:
European integration is a fundamentally open-ended and contested process. Within the ‘mosaic of European integration theories’, critical political economy perspectives highlight the imbalances and structural power asymmetries of the European project, and how they have become manifest in the multiple crises in Europe. How to account for both the origins and consequences of this crisis has become a key question for scholars and students of European integration. We argue that critical political economy (CPE) has an important and unique contribution to make here. Unlike other approaches, CPE seeks to uncover the deep connections between the (internal) dynamics of the European integration process and the dynamics of global capitalism, arguing that European integration, or disintegration for that matter, takes place in a global, structural context that shapes and conditions both form and content of the integration process. In this paper, we provide an overview of the key concepts, methodology and arguments of a critical political economy perspective on European integration. Following a discussion of the core conceptual framework, the paper then proceeds with an integrated analysis of EMU as a political project, with a particular focus on continuity and changes within the political economy of neoliberalism. The Euro crisis here serves as a contemporary reference point to illustrate the strengths and contributions of critical political economy perspectives to the overall mosaic of European integration theories.
Topic:
Diplomacy, Regional Cooperation, Regional Integration, and Economic Policy
Political Geography:
Europe