Commentaries

Processing capacity, not mine output, decides who holds the real leverage. A commentary by Daniel Gros

Italy’s media have fixated on the false claim that the 2026 budget “favours the rich,” instead of scrutinising what the document actually contains. A commentary by Lorenzo Bini Smaghi

Giorgia Meloni’s Italy wants to preserve each Member State’s ability to block decision-making at the European level. A commentary by Marco Buti, and Marcello Messori

The Commission’s proposal to strengthen ESMA is exposing national-level resistance to deeper integration. A commentary by Lorenzo Bini Smaghi

Despite some noteworthy initiatives currently undertaken by the European Commission, a fully operational digital identity for businesses (and citizens) is still not in sight. A commentary by Giorgio Presidente

Global geopolitical tensions show no sign of easing any time soon, deepening the climate of uncertainty for both businesses and savers. A commentary by Lorenzo Bini Smaghi

Developing countries often lack access to the capital needed to fund their low-carbon transition. The ability to find solutions to increase financial flows towards them will be – once again – a decisive element guaranteeing success or failure of COP30. A commentary by Joseph Christopher Proctor, and Romain Svartzman  

In Italy, persistent stigma around monetary benefits discourages people from speaking up. A commentary by Sara Ciconali (Caritas Ambrosiana)

National authorities are imposing additional capital buffers on banks for reasons unrelated to the objectives set by European Regulators. A commentary by Lorenzo Bini Smaghi

The bankruptcy of a little-known US car parts company exposes the risks created by years of easy money, weak oversight, and renewed deregulation. A commentary by Ignazio Angeloni

Currently, manufacturers are requesting permission to continue using combustion engines. But would such a step backward truly benefit European consumers and workers? A commentary by Francesco Zirpoli

A message by the Nobel laureate Mohammed Yunus with concrete policy proposals to inform the first EU anti-poverty strategy.

Global economic forecasts show little concern for mounting geopolitical uncertainty, but the risks are real. A commentary by Lorenzo Bini Smaghi

The European Commission is working on its forthcoming anti-poverty strategy. A successful Italian experiment offers a potential large-scale solution. A commentary by Michela Carlana

Our technologies advance faster than our understanding of them – and that widening epistemic gap may pose humanity’s greatest risk. A commentary by Joel Mokyr, 2025 Nobel Laureate in Economics.

By most fundamentals, the single currency should be weakening, yet it keeps rising against the dollar and other major currencies. It may have to do with the ECB’s monetary stance. A commentary by Lorenzo Bini Smaghi

 Despite tighter US monetary policy and stronger growth, the greenback has depreciated against the euro - with major implications for Europe. A commentary by Marco Buti, and Marcello Messori 

Mitigating the risks of budget substitution, procurement delays, and legal derogations. A commentary by Edith Wagner

The euro–dollar exchange rate has returned to its 1999 debut level as Trump’s policies unsettle markets and reopen questions about the balance of power between the two currencies. A commentary by Ignazio Angeloni

Stronger-than-expected growth and persistent inflation cast doubt on further easing, raising tensions with Trump and investors. A commentary by Lorenzo Bini Smaghi

Limited volatility suggests that European markets now view U.S. elections as external political events rather than systemic risks requiring defensive positioning. A commentary by Corrado Botta

Scientific evidence shows that climate change is already the third-largest driver of biodiversity loss globally, a threat that will intensify if climate change worsens. Conversely, biodiversity loss worsens climate change. A commentary by J. Christopher Proctor, and Romain Svartzman

The fall in the BTP–Bund spread says more about Berlin’s fiscal drift than Rome’s newfound virtue. A commentary by Ignazio Angeloni

The ECB’s plan could duplicate private solutions, burden taxpayers, destabilise banks, and breach the EU ban on financing member states’ public debt. A commentary by Lorenzo Bini Smaghi

Why a binding minimum income must anchor the EU’s anti-poverty strategy. A commentary by Pietro Galeone.

 Italy’s debt risk is rooted in economics; France’s in politics. A commentary by Lorenzo Bini Smaghi

Rome has long been better at divisions than mergers. Now, Italy’s newest banking giant must prove it has a credible plan — and the right people to execute it. A commentary by Ignazio Angeloni

The digital euro should be seen as more than a monetary instrument. It is a social experiment in how Europe can combine technological progress with democratic legitimacy to deliver digital infrastructures at scale. A commentary by Claudio Tebaldi 

The question is not whether the EU needs deeper and more liquid capital markets, but how to create them. One obstacle lies in the structure of EU capital markets law. A commentary by Giovanni Strampelli, and Rüdiger Veil 

Markets once sighed with relief when Donald Trump shelved the idea of firing the Fed chair. That comfort was misplaced. A commentary by Lorenzo Bini Smaghi

Ursula Von der Leyen calls for a tougher stance on Israel, forcing the Council to weigh economic ties against the Union’s principles. A commentary by Giorgio Presidente

French politics highlights the vicious cycle of cuts, disillusionment, and populist advance. A commentary by Catherine E. De Vries

 One year on, the European Commission has applauded Mario Draghi’s proposals — but failed to apply them. A commentary by Marco Buti, and Marcello Messori

 Italy’s recurring debate on “extra-profits” misses the point — such levies weaken lending and harm the wider economy. A commentary by Lorenzo Bini Smaghi

As pressure on central banks grows, the Eurozone’s institution cannot avoid greater responsibility. A commentary by Ignazio Angeloni

Europe’s most decisive investment lies not in institutions or markets, but in its young citizens. A commentary by Stefano Caselli

 Europe’s true problem is not irrelevance, but its difficulty in managing its relevance. A commentary by Lorenzo Bini Smaghi

Not every crisis makes Europe stronger and more united, as the EU’s reaction to the second Trump administration shows

Propping up EU firms hit by US tariffs with public funds risks taxing Europeans to subsidise American consumption and federal revenues. A commentary by Marcello Messori

Europe’s exemption from US tariffs in aerospace highlights what the continent lacks elsewhere: unity, scale, and strategy. A commentary by Lorenzo Bini Smaghi.

If public awareness of the need to protect nature increases and new tools are developed, this will pave the way for credits that generate revenue for those who protect, rather than destroy, natural resources.  A commentary by Sylvie Goulard

The IMF’s estimate—suggesting internal EU trade barriers amount to a 44% tariff— cited even by Mario Draghi in an Ft article lacks solid analytical foundations. A commentary by Lorenzo Bini Smaghi

The EU Commission struggles to reconcile scarcity of funding, sustainability goals and the consensus of small farms. A commentary by Pietro Galeone, and Federica Maria Raiti

Funding Innovation in Europe with the Next Framework Programme: a commentary by Daniel Gros, and Giorgio Presidente

With its proposed Space Label and strict oversight regime, the EU aims to lead on responsible space governance. Yet this pioneering effort could turn into a stress test for the Union. A commentary by Simonetta Di Pippo 

Why European monetary sovereignty is at stake. A commentary by Lorenzo Bini Smaghi

For the first time, the EPP can forge shifting coalitions with partners whose visions for Europe are fundamentally at odds—paralysing policy-making and exposing the Union’s underlying fragility. A commentary by Marco Buti, and Marcello Messori

As the old saying goes, the proof of the pudding is in the eating. A commentary by Lorenzo Bini Smaghi.

Interview with Dagmar M. Schuller, CEO and Co-Founder of audEERING, on the findings of the joint IEP@BU–EconPol/ifo report on European innovation policy. By Stefano Feltri.

Europe must tackle its "internal tariffs" in response to Trump’s protectionism, but carefully. A commentary by Marco Buti, and Marcello Messori.

Anyone who holds even a small amount of power clings to it and is unwilling to let go. This is why European countries are determined to keep their right of veto. A commentary by Lorenzo Bini Smaghi

Budgetary targets are politically expedient but of little policy value. A commentary by Andrea Gilli

The US President attacks a central bank that is merely applying the lessons of the post-Covid era. A commentary by Lorenzo Bini Smaghi

A Critical Analysis of Regulatory Evolution, Stakeholder Alignment, and the Rise of Passive Resistance within the EU Framework. A paper by Pascal Durand.

A message from the President of the Republic of Italy Sergio Mattarella on the occasion of the annual event of the Institute for European Policymaking

Trump’s defeat offers a cautionary tale for the European Union. A commentary by Lorenzo Bini Smaghi

A great legacy of the European Council of Milan is the image of a Europe that does not need to be either unanimous or uniform in order to proceed toward its development, precisely insofar as one can trust one another. A commentary by Marta Cartabia

No municipality, no government, no company functions on the basis of unanimity. Why should the European Union content itself with this constraint? A commentary by Sylvie Goulard

Milan 1985: When Politics—and Italy—Propelled Europe Forward. What About Today?  By Mario Mont

Regulators now face a delicate balancing act: fostering innovation while preserving stability and public confidence—particularly in money as a store of value and a reliable medium of exchange. A commentary by Ignazio Angeloni

Forty years ago, Milan hosted the pivotal 1985 European Council where, for the first time, a vote was called — breaking with tradition and setting Europe on a new course. By Catherine De Vries 

Eurobonds can be issued to provide new resources or to become the safe asset for the European financial market, not both. A commentary by Lorenzo Bini Smaghi

At the June 1985 European Council meeting, in Milan, the diverging views about the future of Europe – its identity as a common trading area or as a more cohesive bloc – were bound to clash strongly, given the fact that the meeting was intended to consider various proposals for the reform of the European institutions. A paper by Andrea Colli

At the Castello Sforzesco, in the 1985 meeting, the European Council agreed with the Commission’s conclusion that an internal market could provide the economic and social “crisis management” the Community needed and secure its global economic competitiveness. A paper by Grace Ballor

A political deadlock between a pro-European government and a euroskeptic president could weaken the country's standing within the EU and undermine the European response to Russia’s invasion of Ukraine. A commentary by Catherine De Vries

In response to US protectionism, many governments decry fragmentation in the European market — barriers they themselves enforce. A commentary by Lorenzo Bini Smaghi

While the proof of the pudding will be, as always, in the eating, the UK-EU 19 May Summit can justly be said to have laid out an enticing menu. A commentary by Sir Alan Dashwood

In this paper, we unpack the logic—and the unintended fallout—of the Trump administration’s tariff strategy. We present our analysis as an imagined conversation between President Trump and the late historian Carlo M. Cipolla. A paper by Marco Buti and Marcello Messori

The US-China tariff negotiations and a renewed focus on the long term should not lead the ECB to reconsider its decision. A commentary by Lorenzo Bini Smaghi

The European Union has the money to attract researchers under threat in the US and should coordinate a scheme to deploy it. A commentary by Heather Grabbe, and Daniel Gros.

To truly compete on the global stage, the eurozone must mutualise part of its public debt—and build a deeper, more efficient capital market. A commentary by Lorenzo Bini Smaghi

To enable the United Kingdom to take part in programmes on procurement, standardisation, interoperability, and industrial cooperation, a new institutional framework is needed—potentially inspired by the EU–Switzerland committee model. A commentary by Jonathan Faull 

It is time for an ambitious foreign policy, security and defence partnership (FSDP) between the EU and the UK, tailored to reflect the UK’s unique situation, which should be swiftly negotiated and concluded. A commentary by Alan Dashwood 

The discussion focused on progress made so far and the challenges that still lie ahead in shaping a new framework for UK–EU collaboration in security and defence.

Replacing the Chair is not enough to change monetary policy, as Trump would like — namely, to lower interest rates to boost economic growth. A commentary by Lorenzo Bini Smaghi

The real challenge is not the size of successful tech firms per se, but how their scale is leveraged — whether to support vibrant ecosystems or to entrench monopolistic control. A commentary by Francesco Decarolis.

April’s US inflation data will offer the first glimpse of the real impact of the global trade war that the US administration launched on the “Liberation Day”. A commentary by Ignazio Angeloni

A rise in US Treasury yields would immediately feed through into other countries’ borrowing costs, tightening global financial conditions. A commentary by Lorenzo Bini Smaghi

There are immediate liquidity problems, and then the choice between lowering inflation risk or supporting the economy. A commentary by Ignazio Angeloni

Tariff moves have also compromised the rest of the Trump administration’s strategy, from taxes to energy. A commentary by Lorenzo Bini Smaghi

Mainstream politicians must ensure that the state can once again be a force for good. This means investing in public service delivery, allowing houses to be built, and reducing administrative burdens. A commentary by Catherine De Vries

The ECB might counterbalance the impact of tariffs by steering the exchange rate, but that would be a mistake. Maintaining a focus on price stability is paramount.

The advantages of the Trump administration's ‘reciprocal’ tariff structure for EU industry on the US market are likely to outweigh the direct impact of the 20% tariff that EU exports will now face. A commentary by Daniel Gros

By supporting Marine Le Pen, members of the international nationalist coalition have put partisan solidarity before defending the interests of national taxpayers. A commentary by Sylvie Goulard 

The intrinsic contradictions of Trump’s strategy will strike the United States where it is most vulnerable: inflation and employment. In the ensuing moves of this chess game, it is vital to project both strength and flexibility. A commentary by Ignazio Angeloni

Amid Trump’s activism, many accuse Europe of lacking timely and effective decision-making. But distinctions are necessary. A commentary by Lorenzo Bini Smaghi

Weakening the EU climate corporate reporting in the name of competitiveness, or complementing it with specific measures to mitigate its negative economic impacts? A commentary by Sylvie Goulard, Mélanie Marten, Thomas Rowley, Romain Svartzman 

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

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

Financial discipline, growth potential, and deeper EU integration reassure investors amid rising defense budgets. A commentary by Lorenzo Bini Smaghi

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

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 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

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.

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 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

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.

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).

 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 16^th 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 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.

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. 

Project Beethoven allocates €2.51 billion to “…strengthen the Dutch chip industry and support the future growth of activities in the Brainport Eindhoven hub.”, “…investment in vocational and professional talent, and in sufficient space, good accessibility and affordable housing…”.  

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 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.

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. 

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.

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.

These findings stem from a survey conducted in December 2023, encompassing nearly 13,000 EU citizens. Our dataset is representative of the EU as a whole and, more specifically, of Belgium, France, Germany, Italy, the Netherlands, Poland, and Spain. In Italy, we interviewed 1,325 citizens. 

The U.S. Supreme Court will soon rule on three cases with important implications for the ability of social networks to moderate content, particularly when it comes to disinformation and political propaganda. These developments may also have an impact in Europe

With many new restrictive measures in place one would have expected trade to fall.  However, the most one can say is that globalisation has turned into slowbalisation. 

Elisabeth Braw, a widely respected expert in international relations and security, is currently a senior fellow at the Atlantic Council, a think tank based in Washington, D.C. Before transitioning to research, she was a journalist, a background that informed her recent book published by Yale University Press, titled Goodbye Globalization: The Return of a Divided World.

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.  

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. 
 

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.

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. 

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.

Why have energy and goods prices followed the traditional trajectory – first up, then down – but the services sector has remained plagued by inflationary pressures?

There's a prevailing skepticism regarding whether existing competition laws are equipped to curb the tendency of AI to foster prices above competitive levels, as these laws were originally crafted to target explicit collusion between companies

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.

If the EU (and other rich countries) is genuinely interested in tackling climate change, it has to ensure that adequate funding is available for adaptation and loss and damage. It can then justifiably expect all countries to pitch in with mitigation.

Italy must be compliant ex post, and not only ex ante, with the new fiscal rules if it intends to guarantee the long-term sustainability of its public debt.

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.

The climate diplomacy surrounding the COP28 summit has taken center stage in the inaugural session of the working lunch series organized by the Institute for European Policymaking in collaboration with the European Council on Foreign Relations and the SDA Bocconi School of Management. 

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.

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.

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.

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.

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.

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.

The Council and High Representative for foreign Affairs must ensure that Common Foreign and Security Policy do not deprive individuals of their rights, and must, as a matter of EU constitutional law, include in all instruments a jurisdictional clause indicating the national court responsible to ensure effective judicial protection.

If the European Union wants to have a global economic weight, it must equip itself with great European banking champions capable of attracting capital globally and able to support Europe as a development platform.

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.

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.

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.

The EU should be ready to offer candidate countries at least participation in the single market, partial access to the EU's budget, and observer status in EU institutions by 2030.

We use the pricing mechanism of perpetual loans by our proposed European Debt Agency to determine a dynamic yield corridor that captures idiosyncratic risk and filters liquidity risk.

On October 30, 2023, the Biden Administration issued the Safe, Secure and Trustworthy Development and Use of Artificial Intelligence Executive Order 14110, which marks a key development in the global race to regulate AI

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.

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

Whatever comes out of this election result, Dutch politics has become more volatile and complex in the coming years. This will likely have consequences not only for the Netherlands but also for the EU

La Nota di aggiornamento del Documento di Economia e Finanza indica che la stabilizzazione del debito pubblico italiano richiede il raggiungimento di un surplus primario superiore al 3% del Pil nel giro dei prossimi 3-4 anni. Una manovra restrittiva di questo tipo non ha precedenti storici.

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.

The EU negotiating delegation at the UN Dubai conference will put forward initiatives to phase out CO2-emitting fossil fuels and fossil fuel subsidies.

On November 9th, the Institute for European Policymaking organized its first in-person event in Brussels: The Impact of IRA on the EU Industrial Policy: Challenging Conventional Wisdom.

Ralph Ossa, a professor of Economics at the University of Zurich currently on leave, has been appointed as the WTO chief economist in the most challenging time for the organization.  In the first World Trade Report since his appointment, Ralph Ossa and his colleagues challenge the prevalent narrative of an inevitable decline of globalization that we have experienced in the last three decades.  

A continuous political drive will be necessary, at all levels of government, to guarantee enough momentum in terms of both the necessary implementation of the approved reforms, and the timely disbursement of the sum related to already authorized public investments.

Our analysis indicates that the budgetary documents presented by the Italian government are based on excessively optimistic forecasts regarding GDP growth, the effectiveness of budgetary measures and the revenues connected to privatizations. As a result, the very small projected decline in the public debt/GDP ratio is not likely.

How can broad public support for policy reforms and gridlock be overcome? The main mechanism for achieving this in political systems across the democratic world is open competition for the main executive office: the President of the Commission, in the case of the EU.  

As the path to fiscal sustainability narrows, so does Italy’s political capital to credibly advocate a radical reform of EU fiscal rules. Italy's primary balance will need to improve by 0.9% of GDP each year in both 2025 and 2026: similarly sized improvements were recorded in only 3 of the 20 years before the pandemic (2 of which were at the height of the Eurozone crisis, in 2011 and 2012).

Rebuilding trust in the EU would entail the recognition that the winners of yesterday are not the winners of today or tomorrow. In a world of endemic uncertainty and repeated shocks, to avoid zero-sum games, an insurance-based solidarity is needed where support will depend on who suffers more from the shocks.  

The EU directives on Women on Boards and on Pay Transparency have a clear objective: to reduce gender gaps in European countries. Assessing their effectiveness requires a thorough understanding of the outcomes of similar policies based on research.

The ongoing conversation among the European Union institutions that started when the Commission released its proposal also features a variety of views on which (and how many) authorities both at EU level and at Member State should lead the governance of AI.

The reduction in trade needed to achieve our climate ambitions would be out of reach. Border Carbon Adjustment is the way to go, but leakages remain sizeable.

Federal Reserve monetary policy has been more expansionary than the one predicted by the rule until the second quarter of 2022, then this tendency was reversed.  The evidence is very different for the case of the Euro area, where the observed policy rates are consistently below those predicted by the model and fluctuate outside the range compatible with the model-related uncertainty.

The former managing director of the ESM discusses the long-term consequences of the Euro crisis and its aftermath.

While American and European central bankers might prefer to focus on their progress in tamping down inflation, there is no use pretending that they did not play a significant role in creating the problem.

The ratification of the modified ESM treaty by the Greek parliament took place easily, and smoothly, without the usual political tensions. The text was submitted to the plenary on the 28th of June 2021 and a week later, on July 6th, it was adopted by a large majority. Only the Greek Communist Party and minor parties of the extreme left and right voted against it. It was practically a non-issue for the mainstream Greek political parties and Greek citizens. Why so?

With the establishment of the ESM, the original form of the states' own responsibility for their budgetary policy (no bailout clause), which was central to Germany, has been permanently softened.

While banks are now profiting from the new interest rate scenario, the ultimate long-term effect of heightened interest rates on bank performance remains uncertain.

L'Inflation Reduction Act (IRA), firmato dal Presidente degli Stati Uniti Joe Biden quasi un anno fa (agosto 2022), è il primo importante provvedimento per contrastare il cambiamento climatico che il parlamento degli Stati Uniti abbia mai approvato. La ragione principale di questo successo è che l’IRA non impone oneri all’industria USA ma garantisce molti sussidi.

Bite-back occurs when an innovation has unexpected and unintended effects. It is probably the case that in most cases such consequences are negative, but that is not invariably the case. Bite-back happens because a new technology is by definition an exploration into the unknown, and so it is impossible to predict precisely whether it will do more or less of just very different things from what it was meant to do.

A detailed analysis suggests that the handicap for European producers in the US market will be limited. This small negative effect is likely to be overwhelmed by the much-increased market, implying that the IRA leads to increased opportunities for exports of electric vehicles and renewable inputs to the US. Our calculations suggest that over time the US market for electric vehicles could increase by a factor of 4 and renewables installations should also increase by hundreds of percent. A commentary by Daniel Gros.

As a possible reform of its dispute settlement procedures, the WTO membership should consider carving out trade actions taken under the national security exception (GATT Article XXI) as a case where trading partners have the right to bring non-violation claims but do not have the right to bring violation claims.

The proliferation of advanced generative AI models has unequivocally highlighted what was already foreseeable since the advent of the algorithmic era. The traditional notion of "consent" is no longer a viable proposition in the context of an algorithmic society. Given the increasing sophistication of emerging AI generative models, which legal basis could be a reasonable alternative?

American protectionism has been reinvented in the name of “national security”. Yet, the belief that a country can achieve its own “nationally security” unilaterally is debatable.

Given the common monetary policy in Europe, term premia on bonds issued by different countries are an immediate gauge of the heterogeneity in the transmission mechanism of monetary policy in Europe and of the need for intervention to protect the Euro area against it.

The dynamics of nominal government bond yields at different maturities play a central role in shaping the response of the real economy to monetary and fiscal policy interventions. Yields can be decomposed into two unobservable components: the sequence of expected one-period rates and the term-premia.

So much international trade happens in dollars that it would be very difficult to turn the tide against the currency any time soon.

If Russia's invasion and assault on Ukraine can be unequivocally classified as aggression, then the response to this violation must also adhere to international legal standards.

A concise introduction into the workings of large language models is presented. We start with an introduction to the attention mechanism, the core of the transformer architecture, which is then followed by a discussion of the steps needed to engineer the base model, a generatively pretrained transfromers (GPT), to a working chatbot like ChatGPT.

“You can do some pretty impressive things with AI as a technological platform, but I am not necessarily an optimist because there are also some very negative paths that AI could take as a technology. We have a confluence of factors that make the negative use of this technology much more probable than positive use”, MIT economist Daron Acemoglu argues.

Il dibattito sulla riforma del Meccanismo Europeo di Stabilità (MES) - che l’Italia rimane l’unico Paese UE a non avere ratificato - è tornato al centro del dibattito politico italiano. All’interno della maggioranza di governo sembrano coesistere due linee di opposizione alla ratifica – una “ideologica” e una “strategica”. Entrambe sono fallaci.