European Policies
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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 first elected president of the European Council, Herman van Rompuy, discusses how to fix the decision-making process at the EU level
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.
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.
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.
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
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.
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.
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.
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.
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 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?
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.
Even though European banks do have solid Basel ratios, their profitability is insufficient to make them attractive for investors. This suggests that – from the market’s perspective - the system may not be as sound and stable as regulators believe
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.
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.
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.
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.
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.
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
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.
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.
To understand the feasibility of further integration, we study the extent and evolution of cultural and policy views heterogeneity in Europe leveraging international survey data. We calculate the distribution of cultural and policy views distance both across and within countries. We find that cultural heterogeneity has increased along both dimensions in the past but has decreased in the most recent wave.
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.
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.