Publications
Trumponomics Faces Market Test: Implications for Europe
The heightened risk aversion triggered by Trump's policies has not spread to Europe, where optimism prevails regarding more cohesive and responsive policymaking. A commentary by Lorenzo Bini Smaghi
A firm but measured response, aligned with rules and European interests, is better than excessive conciliation with the US administration. Here's why. A commentary by Lorenzo Bini Smaghi
From Germany's debt choices to Italy’s stance on rearmament, Ambassador Luigi Mattiolo analyses how the EU is evolving in the age of Trump. An interview by Stefano Feltri
European countries should plan for a Peace Enforcement mission and prepare for either Non-Combat Security Assistance and Support or for Mobile Rapid Reaction Force in order to be prepared for a “what if conflict resumes”. A Policy Brief by Andrea Gilli, Mauro Gilli, and Niccolò Petrelli
The administration’s emphasis on stablecoins risks eroding the Federal Reserve’s independence and could weaken the dollar’s global standing. A commentary by Ignazio Angeloni
Berlin’s pledge to do “whatever it takes” on military and infrastructure spending raises government bond yields across the continent. A commentary by Ignazio Angeloni
Voluntary certification is a novel approach that can restrict the harmful practices of some dominant platforms and motivate and reward emerging platforms that align their practices with the public interest. A Policy Brief by Dovev Lavie, Oreste Pollicino, and Tommaso Valletti
Financial discipline, growth potential, and deeper EU integration reassure investors amid rising defense budgets. A commentary by Lorenzo Bini Smaghi
A coalition of most EU Member States plus the UK and Norway should create a European Security Fund to provide Ukraine with a reliable source of financing, large enough to substitute the US. A Policy Brief by Daniel Gros
The normalisation of war in political discourse is forcing a renegotiation of the European welfare state, a delicate balancing act that will determine whether defence budgets remain sustainable in the long run. A commentary by Stephanie Hofmann & Catherine E. De Vries
The explicit goal of the new US administration is to protect the US tech industry and to dismantle European regulations, reverting to bilateral arrangements where the strongest naturally prevails. A commentary by Lorenzo Bini Smaghi
The EU, along with the UK and Norway, has the resources and capabilities to sustain Ukraine’s fight and provide security guarantees if Putin agrees to a ceasefire. A commentary by Daniel Gros
Should China and the US – where major market players are based – manage to sideline Europe in its regulatory isolation, the EU’s influence may wane. A commentary by Marco Bassini.
After the 2008 financial crisis, the ECB's supervision restored the soundness of euro area banks. Now, it has the opportunity to build a banking sector of continental dimension. A commentary by Ignazio Angeloni.
Trump’s ambitions to extend U.S. influence over neighboring countries align with Karl Haushofer’s notorious geopolitical doctrine. A new global order is emerging, and Europe may not be part of it. A commentary by Andrea Colli
As 80 years ago, today’s large states aim to impose their will on smaller nations. This time, however, no European leader is at the table. Will incoming German Chancellor Merz change this? A commentary by Catherine De Vries
The Trump II Administration is likely to throw a wrench in coordination across European states in nearly every forum except one: the IMF and multilateral financial institutions. A Policy Brief by Catherine De Vries, and Sienna Nordquist
The shared opposition of environmentalists and farmers to the EU-Mercosur trade deal reflects concerns about economic liberalization at the expense of ecological and social equity. A commentary by Pietro Galeone, Joseph Christopher Proctor, Romain Svartzman
The US President has halted plans for a central bank digital currency: a mere show of strength to undermine the Fed’s independence. A commentary by Ignazio Angeloni
The incumbent’s full control over a pivotal realm of power implies several risks related to the incumbent’s behavior. The first temptation is to self-justify the strict control over AI technology “for the good of mankind” . A commentary by Andrea Colli
European policymakers keep pushing the narrative that boosting AI development is key to European competitiveness. But stakes are much higher, because super-intelligent AI will confer enormous geopolitical leverage to those who control it.
This report focuses on how the EU can manage global trends in the digital ecosphere, with a particular emphasis on the rules that it has set to govern relationships between platforms and businesses
The global financial system is at a crossroads of two related processes: post-crisis reform—the so-called Basel III—that is missing its final stage, and the new political course in the United States, where the incoming administration has declared war on all pre-existing rules.
If European leaders resist the temptation to retaliate against Trump’s protectionism, Europe could actually benefit from increased U.S. tariffs on China. A commentary by Daniel Gros.
A recently published report by the Institute for European Policymaking, written by a multidisciplinary team of researchers at Bocconi University and the Toulouse School of Economics, provides timely insights into these challenges and offers concrete policy recommendations across three critical areas
The German economy is weak not because of a lack of investment, but because of the sectors it goes into. German industry has specialised in mid-tech sectors, like automotive, that are now under increasing competitive pressure from China. A commentary by Daniel Gros
Former U.S. Treasury Secretary Larry Summers has acknowledged that the neutral interest rate will be higher than previously expected. This shift carries significant implications for public finances.
The empirical evidence does not confirm the hypothesis that the public debt tends to be more stable in countries where the (real) interest rate is systematically lower than (real) growth. On the contrary.
A policy Brief by Lorenzo Bini Smaghi
The geopolitical references in the inaugural address of the new US President are striking because they align closely with the concept of “classic geopolitics”—a vision of politics and international relations as an aggressive, zero-sum game. A commentary by Andrea Colli
Much of the impact of the new Trump Administration on Europe will depend on how the balance of power within the US plays out between the President and key corporate leaders, of Big Tech in particular
Both in the U.S. and Europe, the excess liquidity created over past decades has been only partially reabsorbed. It remains ready to fuel inflation if a matchstick is struck. A commentary by Franco Bruni
Linking relocation to a job in Ukraine would ensure that the return does not constitute a burden for Ukrainian public finances which are already under enormous strain
IEP@BU seeks to foster discussions—even on the most divisive topics—that are firmly rooted in data and rigorous analysis of empirical evidence
In a world where the number of smartphones is nearing that of people, and each device typically hosts two or three payment applications, the added value of X's new tool is limited
In a more dangerous and unstable world, Europe must thus prepare for war to maintain peace and its security: as Vegetius noted, si vis pacem para bellum. However, increasing budgets is not enough if the EU does not address key strategic questions.
In a nutshell, we see that 80 years of prime partnership have created a solid base of mutual appreciation and similar sensitivities. Europeans and Americans still see in the other their most valuable ally, NATO is highly regarded and cooperation trumps competition. However, eight years of American hyper-polarisation at home and mixed messaging abroad have taken their toll. In 2024, 63 percent of Europeans agree that it is time for Europe to go its own way.
Reduced economic insecurity generates not only a direct increase in demand for populist commitments but also a change in culture in the direction of lower trust and prevalent exclusionary rhetoric, which in turn are further indirect channels through which populist movements thrive
We must be realistic about the level of structured cooperation we can expect to be able to achieve with the EU in the immediate term. But we should be ambitious
Remarks by Sir Jonathan Faull, Chair of European Public Affairs, Brunswick Group.
The foreign policy landscape is shifting fast, and it is time to overcome the post-Brexit- mutual diffidence.
It defies any sense of equity that countries facing rising sea levels, or like Pakistan which suffered a flash flood in 2022, submerging a third of the country, should borrow on commercial terms to cope.
The discussion explored practical ideas around the process of establishing a broad and deep partnership between the United Kingdom and the European Union in the areas of foreign, security, and defence policy.
Lack of integration of capital markets is a major source of weakness and declining competitiveness of the European economy. While efforts to complete harmonization of capital market legislation in this domain should retain highest priority in the new Commission’s work programme, there is room to advance integration by exploiting the STS regulation introduced by the EU in 2017 as part of its broader efforts to implement the CMU.
The main finding is that at the peak of the latest tightening cycle, the ECB monetary policy stance was no more restrictive than it was at the peak of the two preceding ones; actually, probably less.
A second term for Donald Trump could structurally intensify the trend toward trade fragmentation, heightening tensions, particularly between the United States and China, the world’s two largest economies.
The narrative of the EU as a peace project is that it allowed Europeans to reject military investments on the basis of the excuse that we were living in a post-war society. This is not true.
The fact that prices have risen considerably compared to four years ago will matter more to most voters when voting, and not that they have caused growth to slow.
The Honorary President of the IEP@BU Mario Monti opened the international conference "Democracy Today," organized by the Konstantinos Karamanlis Foundation in Athens, on the occasion of the fiftieth anniversary of Greece's transition to democracy
The age demographics in key swing states reveal a significant number of young potential voters who are more likely to support Kamala Harris. However, young voters are historically the least likely to turn out at the polls.
Europe will be called upon to make a difficult decision between pursuing the protectionist policies of the United States or taking advantage of the diplomatic and economic opportunities that American isolationism could offer.
“The Commission would like to be taking the lead on defense policy, but defense remains the domain of Member States”. Thomas Gomart is one of the most influential experts on foreign relations and geopolitics at the EU level: he has been director of the Ifri, Institute Francais de Relationes Internationales, since 2015. An expert in Russian geopolitics and the history of international relations, he has recently published the book L'accélération de l'histoire. Les noeuds géostratégiques d'un monde hors de contrôle ( Éditions Tallandier, 2024).
American, Chinese, and European policymakers seem convinced that supporting high-tech green industries is the key not only to a sustainable future, but also to a prosperous one. But the idea that green tech could form the foundation of a major economy is unrealistic.
The first elected president of the European Council, Herman van Rompuy, discusses how to fix the decision-making process at the EU level
On 16 October 2024, Claudia Buch delivered a lecture titled Bank Profitability: A Mirror of the Past, Creating a Vision for the Future at Bocconi University. The event was co-organized by the Baffi Center on Economics, Finance, and Regulation and the Institute for European Policymaking @ Bocconi University (IEP@BU).
The 16th meeting of the Conference of the Parties (COP 16) to the Convention on Biological Diversity (CBD), or "Biodiversity COP 16", will take place in Cali, Colombia, from October 21 to November 1.
The costs and benefits of sharing national sovereignty are different across EU countries. In our framework, costs mainly depend on the relative strengths of each national state and intermediate institutions.
Building on a previous analysis of the trends of convergence and divergence between peripheral and core EA-12 countries after the euro area sovereign debt crisis (Bordignon et al., 2023), this work investigates the long-term evolution of such differences in economic, institutional, and political outcomes, testing whether a pattern of convergence was finally resumed and comparing the effects of this crisis with those induced by the Covid-19 pandemic.
The UniCredit-Commerzbank deal is a test case for the ECB, which will reverberate into the future, and be a golden opportunity for its supervisory board to uphold its independence
This dismantling of the European Grean Deal would be one of the main mistakes that the Europeans could make. The often critics should not lead us to underestimate or marginalize people's desire to take action and deny the necessity to accelerate the transition.
Robust port infrastructure can significantly mitigate the risk of supply chain disruption, suggesting that government efforts are better targeted at improving the performance of ports and critical infrastructure more broadly, rather than implementing protectionist measures.
On September 19, mister Roth gave a lecture to Bocconi students titled “Europe at the Crossroads: Turning Today’s Poly-Crisis Into Tomorrow’s Poly-Opportunity”. Eleanor Spaventa, a professor of European Law at Bocconi and a member of the IEP@BU managing board, chaired the event co-hosted by IEP@BU and the Department of Legal Studies.
While the focus of the new Commission will be crystallizing over the months and years to come, this short analysis of the mission letters for the future Commissioners suggests that the recent intervention of Mario Draghi on Europe’s competitiveness has been agenda-setting for the policy priorities as defined by Commission President Ursula von der Leyen.
After a detailed presentation of the Green Deal’s main measures in each sector, we will focus on a few of them to analyze its failures or successes in greater detail.
The economic transformation required to reach global net zero goals relies on the mining and transformation of certain minerals and metals for the production of low-carbon technologies. Increasing global demand for these critical materials, combined with their uneven geographical distribution, raise potential supply issues that pose economic security and transition risks for the European Union. This report sets out the nature of the challenge, the policy responses and ways forward for the bloc.
The September 2024 state elections in Germany mark a low point in public support for the governing left-wing coalition and a high point for the populist right. Often overlooked, the elections might also mark the fading of the German socialist party Die Linke into political irrelevance. Its demise teaches us valuable lessons for modern European politics
The fight against poverty is not a new one. It has been a feature of national policies and academic research for many decades. However, the ways in which a State fights against poverty have changed over time, continuously evolving to approach new challenges through the adoption of new tools and policies.
The report on The Future of European Competitiveness presented by Mario Draghi provides a clarion call for economic reforms to stop Europe’s relative decline. This short comment cannot do justice to the report with over 300 pages of supporting material. We will concentrate just on two key messages regarding innovation and investment.
We find that the profitability of high-risk tech companies, associated with high rates of failure, is very dependent on the cost of restructuring, which itself is driven by employment protection legislation.
As Europe begins to face the start of its own relationship with fentanyl, it is paramount that policymakers learn from the lessons of American and Australia in crafting their response. Policymakers need to bear in mind that drug users are consumers who will respond to the changing economic environment wrought by their efforts.
The mobile telecom sector is often taken as a case study of fragmentation of the single market leading to less investment and a loss of technological leadership. However, a closer examination of the data suggests that the fragmentation also implies more competition leading to lower prices for consumers in Europe.
A popular thesis in policy circles is that there is an “investment gap” that Europe needs to fill to face the great challenges of our times, such as the digital and green transitions. However, the notion of the “investment gap” used by policymakers is often vague and therefore it risks legitimate a wasteful allocation of public resources.
After revisiting the pros and cons, this paper concludes that, all in all, the rationale for introducing an ECB-sponsored digital euro for citizens, retailers, and producers, is not solidly established. Today’s highly dynamic, innovative, and efficient digital payment ecosystem does not require such an instrument, which would unavoidably duplicate existing applications and probably struggle to match private innovation.
If Trump is elected in November 2024, the security outlook of Europe could deteriorate very fast as Russia may attempt to seek the opportunity of taking NATO off balance. It is therefore essential that the Commission and the forthcoming Defence Commissioner begin the policy planning and design well in advance and preferably as soon as they take office, as to move past preliminary negotiations and have blueprints ready for approval should the situation require it.
In June 2024, the EU has unleashed a powerful weapon in its arsenal against money laundering and terrorist financing: a comprehensive package of new rules designed to close loopholes, enhance transparency, and strengthen enforcement.
Identifying the appropriate level of spending is difficult and there is not really any science about this. This is because different considerations play a role, including military strategy to political psychology.
There are lessons to be learned by comparing the most recent elections in France and the UK. The French electoral system is characterized by two-turn constituency elections where several short-listed candidates qualify for a second round should no-one reach more than 50% of the votes in the first round. The British system, conversely, assigns a given constituency seat to whoever wins the plurality in a given constituency, regardless of whether or not the candidate reaches 50%.
While defense procurement and production remain fragmented across Europe and the EU and its member states invest less in their security and defense than the US, new EU and EU-sponsored initiatives demonstrate that Europeans are aware of this and attempt to reduce these shortcomings – political and fiscal obstacles notwithstanding.
A key area of frustration for voters on both the left and the right is the poor performance of the NHS. With ever-longer waiting lists for hospital appointments and declining local services, voters are deeply concerned about the state of their beloved health service.
Defense expenditure in EU members rose by 50% (net of inflation) between 2015 and 2023, with an increase in the expenditure-to-GDP ratio (Figure 2, referring to the current EU members). The increase involved all EU members, including not NATO members during the period under consideration.
European politics has become more fragmented which makes governing a tall task, but also makes the EU more political. After decades of being perceived as too technocratic and distant, the fight for the European Union’s top jobs became more highly anticipated and much more political.
The latest European Defence Industrial Strategy outlines a commitment to support investments by Member States and the European defence industry in the development and market introduction of cutting-edge defence technologies and capabilities.
EU firms should be able to satisfy a large share of the increases in defence expenditure that are required immediately to support Ukraine and also those in the medium and longer-term
The European Sovereign Bond market gyrations erupted in the wake of President Emmanuel Macron’s call for a snap parliamentary vote after his party’s defeat to Marine Le Pen’s National Rally in the European elections have sparked a debate on the opportunity of an activation of the Transmission Protection Mechanism (TPI).
Europeans want policymaking that is culturally more conservative, for example, better protection of external borders and more priority on the wellbeing of European natives rather than third-country immigrants.
Imposing such high tariffs on BEVs from China without any evidence of damage to EU industry does not make sense and will only backfire on the ability of EU industry to export their own cars.
The paper explores the evolution of the EU's policy on disinformation, evaluates its current strategies, and discusses future perspectives, emphasizing the importance of transparency and accountability in the digital age.
The main consequence of not achieving an integrated financial market is that Europe will not be able to finance the huge investment requirements needed for its ambitions in the fields of climate transition, energy security, digital evolution, defense, etc…
It is therefore possible that even the election of the Commission President will not change the overall picture, with the real game taking place whenever the European Parliament is called to vote on the fundamental choices that Europe will face in the coming years, from managing the digital and green transitions to fundamental decisions on the common defense and security policies.
The elections for the European Parliament of June 6-9 had a clear winner, the extreme right, and also a clear loser, the economy.
After decades of being perceived as too technocratic and distant, the fight for the European Union’s top jobs has become highly anticipated and much more political
"I live in Milan, I vote for Europe." This is the name of the initiative through which the Municipality of Milan, the European Parliament, and the Institute for European Policymaking at Bocconi University worked together to chat with Milanese residents about Europe.
C’è una sorta di meccanismo “Comma 22” che alle elezioni europee si declina così: i giovani sentono la politica come distante dai loro problemi e per questo votano meno, ma proprio perché votano meno la politica dà loro meno peso. Come si risolve?
Aging is quite possibly bringing havoc to social security systems across the rich World. It is happening slowly, but it is destiny
There is a large positive effect of new membership to the EU without cost to previous members. The EU enlargement seems to be a positive sum game.
In our first forecast for the EP 2024 elections based on our model, in January 2024, we predicted a “sharp right turn”. In our latest forecast, and our final one before the election, we are still forecasting that the next EP will be considerably more right-leaning than the current one, and that the two groups to the right of the EPP will be considerably larger than they currently are.
The Fed and the ECB conducted monetary policy reviews in 2019-2020, when most of the above shocks were still in the making or yet to come. Both of them seem largely obsolete today, or at least incomplete. There is no appetite to restart them.
ASML has a global monopoly on EUV, the most advanced lithography technology that is on the Wassenaar Arrangement list of dual-use technologies and requires an export license. The Dutch government approved the export license of EUV-technology to China in 2018. The US government was not pleased and tried to press its ally to consider the security issues.
Whatever one thinks of the European project, a collision course with Brussels is not only a waste of time, but will also likely undermine the Dutch position in the world.
