Publications

Eu governance
2024 - n° 135 23/10/2024

“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).

Stefano Feltri, Thomas Gomart
Financial Markets
2024 - n° 132 16/10/2024

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).

Claudia Buch
competitiveness
2024 - n° 129 09/10/2024

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.

Massimo Bordignon
competitiveness
2024 - n° 126 30/09/2024
A credible low-cost path to decarbonize energy systems and transport, which together account for 60% of emissions, now exists. Unfortunately, political obstacles to the rapid adoption of these clean-energy solutions have emerged, owing to NIMBYism in advanced economies and tensions between the West and China.
Daniel Gros
Eu governance
2024 - n° 123 18/09/2024

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. 

Catherine De Vries
2024 - n° 119 12/09/2024

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.

Capucine Nobletz, Romain Svartzman and Simon Dikau
Eu governance
2024 - n° 118 12/09/2024

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

Laurenz Guenther
Social Inclusion
2024 - n° 114 26/07/2024

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.

Zachary Porreca
competitiveness
2024 - n° 112 16/07/2024

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.

Daniel Gros, Philip-Leo Mengel, Giorgio Presidente
Financial Markets
2024 - n° 111 15/07/2024

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.

Ignazio Angeloni
Eu governance
2024 - n° 110 15/07/2024

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.

Francesco Nicoli
Eu governance
2024 - n° 107 09/07/2024

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%.

Francesco Nicoli
war Ukraine elections
2024 - n° 104 05/07/2024

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. 

Enrico Letta
Financial Markets
2024 - n° 102 01/07/2024

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). 
 

Carlo Favero, Massimo Amato, Dev Srivastava
Eu governance
2024 - n° 97 10/06/2024

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.

Carlo Altomonte
Social Inclusion
2024 - n° 93 05/06/2024

"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.

Pietro Galeone
Social Inclusion
2024 - n° 92 05/06/2024

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?

Pietro Galeone
Eu governance
2024 - n° 89 03/06/2024

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.

Simon Hix
competitiveness
2024 - n° 87 22/05/2024

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. 

Sanne van der Lugt
competition
2024 - n° 83 22/04/2024

The EU is encouraging other countries to follow its lead and support the green transition. This requires massive subsidies in many different sectors.  Why should the EU then complain if other countries outcompete it in terms of subsidizing the production of green goods?   

Daniel Gros, Weinan Hu
Keywords: Car, Automotive, Subsidies
competition
2024 - n° 80 26/04/2024

European automakers currently face increasing pressures. While the region’s manufacturers long dominated global sales revenues, several competitors from Asia have recently moved into the top ten.  But European companies have faced similar difficulties before, and the responses of the region’s automakers and policymakers to previous challenges offer insight for the present, especially on the issues of global competition and energy transition.  

Grace Ballor
sfondo updates
2024 - n° 77 17/04/2024

It is now over two years since Russia launched its brutal full-scale invasion of Ukraine. Ever since those early days, a broad network of CEPR economists has been working intensively with colleagues in Ukraine and across the international research and policy communities to explore how to tackle the big economic challenges of the war and how to plan for the country’s post-war reconstruction. 
 

Elena Carletti
competitiveness
2024 - n° 76 15/04/2024

It is often assumed that Germany’s economic relations with China are so important that Berlin tends to take a softer stance on China-EU relations than its EU partners – or at least that this used to be the case until most recently. In particular, it is feared that German industry might be more vulnerable to disruptions of the supply of Chinese inputs than other European countries. However, this impression of a greater dependency of German industry and its supply chains from China is not borne out by the data.

Samina Sultan
Digital & Innovation
2024 - n° 75 08/04/2024

Through its missions and governance, Horizon Europe does not meet the innovation challenge and anchors our industry in the mid-tech range. This report argues that current European efforts, while laudable, are insufficient, in both quantity and quality. Important reforms are required to enable Europe to compete in the value-creating space. 

Daniel Gros, Giorgio Presidente, Jean Tirole, Clemens Fuest, Philippe-Leo P. Mengel
green transition
2024 - n° 74 05/04/2024

The concept of green backlash has recently become more salient in the news, in part due to the widespread farmers’ protests held in a number of European countries. However, there is so far not much robust empirical evidence of an electoral penalty against governments that implement ambitious climate policies.

Silvia Pianta
Financial Markets
2024 - n° 72 21/03/2024

This paper shows that the current operational framework of monetary policy relying on excess liquidity, together with a high level of interest rates, produces a remarkable redistribution of interest payments across the national central banks of the Eurosystem, due to the rules governing the pooling of monetary income among them. This mechanism implies significant fiscal transfers across the member countries of the euro area. Our estimates for 2023 show that their size can be in the order of several billion euro. 

Angelo Baglioni
Eu governance
2024 - n° 71 19/03/2024

The polls for the forthcoming European Parliament elections indicate a further surge of the radical and/or sovereigntist right. This result might destabilize again traditional partisan and inter-institutional equilibria and weaken the support to EU authority at a time when serious challenges and difficult choices loom large. Does the EU risk plunging back into an “existential crisis”, as it happened a decade ago in the aftermath of the 2014 elections?  

Maurizio Ferrera
green transition
2024 - n° 70 12/03/2024

This policy brief highlights that while the green subsidies provided by the Inflation Reduction Act of the United States are homogeneous across beneficiaries, the subsidies associated with the Green Deal industrial plan are highly fragmented across European member States. We quantify the extent of resource misallocation due to this subsidy dispersion by using the model of Hsieh and Klenow (2009), calibrated on the EU electricity-producing industry. We compare both the actual allocation of subsidies, and a policy of subsidies coordinated at the EU level, to a hypothetical frictionless benchmark with no subsidies. We find that moving to coordinated subsidies can increase productivity by more than 30% with respect to the uncoordinated scenario, substantially reduce the productivity gap with the United States, and generate gains worth up to 6% of the EU value-added in the industries considered. Policy recommendations include greater EU-level coordination to minimize misallocation and enhance productivity. 

Carlo Altomonte, Giorgio Presidente
war Ukraine elections
2024 - n° 69 11/03/2024

The EU-sponsored Eurobarometer polls routinely estimate support for EU defence integration between 70% and 80% of respondents, while a recent poll by the independent Bertelsmann Stiftung polling branch, Euopinions, returned a 87% support level. However, the devil is in the details: what is meant by “European defence policy” can wildly differ between people, and these simple questions present no trade-offs. 

Francesco Nicoli
Eu governance
2024 - n° 68 23/02/2024

The pattern of macroeconomic catch-up seen in the EU’s enlargement process is a remarkably positive story - if largely unsung and still incomplete. The catch-up achieved so far constitutes a key backdrop to today’s debate about further enlargement.  Without the rapid growth of the most recently acceding states it would be impossible for the EU to contemplate taking further poor members.

Michael Emerson, Daniel Gros
Financial Markets
2024 - n° 67 21/02/2024

This paper, prepared on a request by the European Parliament, contributes to a reflection aimed at identifying ways to revive and upgrade the banking union, so as to enable it to cope with the major transformational challenges facing Europe as we move forward in the 21st century: Green, Digital, Geo-Strategic and Structural. 

Ignazio Angeloni
Financial Markets
2024 - n° 64 12/02/2024

The euro area has been subject to a series of very different shocks, some of which, such as the COVID-19 pandemic, were unprecedented. While the ECB’s reaction to these deflationary shocks was vigorous, it persisted too long with its expansionary measures and failed to see their inflationary impact when energy prices shot up. The future is likely to bring new challenges, but climate change might not be the most important threat to price and financial stability.

This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 15 February 2024.

Daniel Gros, farzaneh shamsfakhr
green transition
2024 - n° 58 11/01/2024

The current EU natural gas price cap on gas does not lower TTF volatility, fails to prevent price spikes, and has no significant impact on lowering inflation and commodity market volatility.

Corrado Botta
competitiveness
2024 - n° 26 25/01/2024

A key factor that policy often overlooks is substitutability. Almost every raw material has substitutes. A combination of substitution and some stock piling would be sufficient to de-risk the supply of raw materials to a large extent.

Daniel Gros
Social Inclusion
2023 - n° 57 28/12/2023

On December 200,2023, The European Parliament and the Council agreed on five key proposals of the New Pact on Migration and Asylum proposed by the EU Commission in September 2020 and aimed at creating a uniform system of regulations and policies around migration and asylum for the EU. The main aim of the new pact was to replace the Dublin system which relied heavily on first-country-of-entry criteria creating a burden for frontline member states.

Angelo Martelli
Social Inclusion
2023 - n° 56 22/12/2023

Without a serious change in the regulations, or a substantial investment in the bureaucratic capacity and the infrastructure for migrants, Dublin is bound to be more real on paper than in practice and many ports of entry are likely to remain in a constant state of emergency.

Pietro Galeone
Digital & Innovation
2023 - n° 55 22/12/2023

While increased bureaucratic documentation might make the European AI research landscape less appealing, better documentation will likely result in more thorough and potentially meaningful research.

Dirk Hovy
Eu governance
2023 - n° 54 21/12/2023

The new framework has a higher degree of built-in flexibility. By tailoring fiscal adjustment to the situation of individual countries, the reform overcomes one major issue with the previous set of rules – namely the excessive use of flexibility clauses and overlays, to soften the otherwise too strict uniform adjustment paths.

Silvia Merler
Digital & Innovation
2023 - n° 53 20/12/2023

In the absence of crystal-clear considerations to be drawn on the legal domain, it is advisable to refrain from celebrating the AI Act (as well as its alleged substantial failure) as a turning point or a historical achievement. Let the final legal provisions speak, first.

Marco Bassini, Oreste Pollicino
Financial Markets
2023 - n° 50 14/12/2023

Inflation rates in the euro area and US increased sharply in 2022, in part following large energy price shocks. This column analyses the pass-through from energy prices to core inflation since the 1970s for the US and Germany. It shows that this pass-through is not constant over time, but time-varying. Pass-through from energy to inflation during the 1970s was high in the US, but not in Germany. Both countries experienced high pass-through in 2022, but this has declined in the most recent quarters, consistent with a return to more normal inflation dynamics.

Pietro Galeone, Daniel Gros
Eu governance
2023 - n° 49 14/12/2023

As the discussion on the next EU enlargement that might include Ukraine in the bloc proceeds, the support of European citizens to support Ukrainians remains solid but not as solid as in the recent past. Eupinions - a Bertelsman Stigtung project - has monitored how the EU sentiment has evolved towards Ukraine over 18 months.

Stefano Feltri
Eu governance
2023 - n° 48 11/12/2023

We identify specific industrial products that are projected to be in high demand in the EU and can be realistically produced given North African countries’ existing capabilities. Specializing in these products, North African countries can diversify their export basket, which has been shown to correlate positively with economic development.

Carlo Altomonte, Giorgio Presidente
Financial Markets
2023 - n° 45 04/12/2023

There is no doubt that monetary policy reacted late to the rising inflationary pressures experienced in 2021-22. The major central banks subsequently caught up rapidly and hiked interest rates at an unprecedented pace. However, as inflation reached its peak at the end of 2022 and has been falling since then, central banks may once again be late in adjusting their policies.

Lorenzo Bini Smaghi
Eu governance
2023 - n° 43 30/11/2023

The way the EU Commission and governments envisage launching future enlargements without strengthening the EU in parallel could have negative consequences for all Europeans, in the EU and in candidate countries.

Sylvie Goulard
Financial Markets
2023 - n° 42 29/11/2023

The US and the euro area have similar headline inflation rates, but very different drivers. In the US, inflation is mainly driven by housing costs. By contrast in the euro area energy now provides an important negative element, that is offset to a large extent by still increasing food prices

Pietro Galeone, Daniel Gros
competitiveness
2023 - n° 39 24/01/2024

On November 13, the Institute for European Policymaking co-organized with IAI, the Istituto per gli Affari Internazionali, an event in Rome dedicated to discussing the implication of the US Industrial Reduction Act on European industries and, specifically, on Italian companies.

Stefano Feltri

IEP@BU Contributors