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2. European energy solidarity: strengthening the EU’s crisibility
- Author:
- Aline Bartenstein
- Publication Date:
- 02-2023
- Content Type:
- Policy Brief
- Institution:
- Robert Schuman Foundation (RSF)
- Abstract:
- By default, when the EU is hit by a crisis, member states tend to have a national sovereignty reflex. When Italy was hit hard by the Covid-19 pandemic, the first reaction was to close its borders and restrict the export of urgently needed medical equipment. National interest superseded the call for European solidarity. Although member states have repeatedly managed to unite and – in the face of the polycrisis – developed a certain crisibility, no one would have been surprised if member states had preferred to seek their own advantage when Russia started the war in Ukraine on 24 February 2022. Nearly one year later, member states are (still) united – some declaring this as never before – and a gas or electricity crisis has so far been averted. This unity, which certainly threatened to crumble in the face of Hungarian opposition, German hesitancy, and the different approaches to dealing with the war, leads us to the question of what is different this time? Certainly, the EU's identity has been profoundly challenged by the war since its peacekeeping credentials – the EU is even a recipient of the Nobel Peace Prize – were perceived to be at risk. Was is this identity-threatening experience that united the member states? Or was it the recognition of Russia as a common foe that strengthened the bond between them?
- Topic:
- Sovereignty, European Union, Solidarity, Energy, and Regional Politics
- Political Geography:
- Russia, Europe, and Italy
3. Can the EU still wrest the Balkans from their blighted history?
- Author:
- Jean Bizet and Fabrice Hugot
- Publication Date:
- 02-2023
- Content Type:
- Policy Brief
- Institution:
- Robert Schuman Foundation (RSF)
- Abstract:
- It is perhaps necessary, first of all, to recall why the name "Western Balkans" is still used to describe this peninsula in south-eastern Europe, why this imprecise geographical concept is preferred to any other name. To answer this question is to recognise from the outset the difficult fate suffered by this part of Europe: if we prefer to speak of the Balkans, it is quite simply because only geography is stable in this region.
- Topic:
- European Union, History, Geography, Regional Politics, and Russia-Ukraine War
- Political Geography:
- Europe and Balkans
4. Geopolitical and Technocratic: EU International Actorness and Anne PINTSCH Russia’s War Against Ukraine
- Author:
- Anne Pintsch and Maryna Rabinovych
- Publication Date:
- 02-2023
- Content Type:
- Policy Brief
- Institution:
- Robert Schuman Foundation (RSF)
- Abstract:
- Russia’s full-scale invasion of Ukraine on 24 February 2022 marked the start of the largest and most brutal war at the heart of the European continent since World War II. It inevitably came as a “cold shower” for the EU and Member States’ politicians, demonstrating with absolute certainty the fragility of the international and European security order. The EU responded to the invasion with unprecedented sanctions against Russia and Belarus and multifaceted resolute support to Ukraine. The latter included the breaking of many previously existing taboos, such as the first ever use of the European Peace Facility to procure weapons for a third country at war or offering collective protection to about 8 million Ukrainian citizens and residents, fleeing the war
- Topic:
- European Union, Geopolitics, Resilience, Technocracy, Regional Politics, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, and Ukraine
5. Gender equality in Europe: a still imperfect model in the world
- Author:
- Stefanie Buzmaniuk
- Publication Date:
- 03-2023
- Content Type:
- Policy Brief
- Institution:
- Robert Schuman Foundation (RSF)
- Abstract:
- In a world where women's rights are once again being challenged from all quarters, Europe remains the place where women live best. Within the Union, however, there have been some setbacks, difficulties persist, and progress is still required in the political, economic and social fields to achieve true gender equality.
- Topic:
- Human Rights, European Union, Women, Inequality, and Gender
- Political Geography:
- Europe
6. Rule of law: the uncertain gamble on conditionality
- Author:
- Eric Maurice
- Publication Date:
- 03-2023
- Content Type:
- Policy Brief
- Institution:
- Robert Schuman Foundation (RSF)
- Abstract:
- Will 2023 be the year when Hungary and Poland join the ranks of Member States that respect the values of the European Union? Nothing is less certain because, in Budapest as in Warsaw, the reforms demanded by the Union have not yet been implemented. In early February Polish president Andrzej Duda, referred a law which was supposed to bring an end to disciplinary abuses against judges to the Constitutional Court. The Hungarian government has still not completed reforms to make public procurement more transparent and to strengthen the fight against corruption. The fact that these measures are being discussed indicates however that the balance of power has changed. 2022 was a pivotal year in the European Union's efforts to combat breaches of the rule of law in its Member States. For the first time, a range of new and old tools, specific or not, structural or conjunctural, were used to try to reverse the trend that has been developing for several years, mainly in Hungary and Poland, of undermining the independence of the judiciary, systems of checks and balances, and certain rights that are considered fundamental.
- Topic:
- European Union, Rule of Law, Judiciary, and Regional Politics
- Political Geography:
- Europe, Poland, Romania, and Hungary
7. Digital Sovereignty: For a Schuman Data Plan
- Author:
- Arno Pons
- Publication Date:
- 01-2023
- Content Type:
- Policy Brief
- Institution:
- Robert Schuman Foundation (RSF)
- Abstract:
- On 9 January, the European Commission launched the first cooperation and monitoring cycle for the achievement of the European Union’s digital decade by 2030. If, in the digital field, Europe faces issues of sovereignty, it is because it has left the sector open for over twenty years to the American Tech giants, who have imposed a game whose rules that have never been understood here. Either because these rules were inaccessible to the European Union (Moore and Metcalfe laws), or because we accepted that there were no rules of the game (code is law).
- Topic:
- Markets, Science and Technology, Infrastructure, Law, European Union, Data, European Commission, and Digital Sovereignty
- Political Geography:
- Europe
8. Higher Renewable Energy Targets in Germany: How Will the Industry Benefit?
- Author:
- Gilles Lepesant
- Publication Date:
- 01-2023
- Content Type:
- Policy Brief
- Institution:
- Institut français des relations internationales (IFRI)
- Abstract:
- “Deutschland – Einstieg in die Deindustrialisierung?” – “Germany, the beginning of deindustrialisation?” asked the German economic newspaper Handelsblatt in the context of the spike in energy prices that has put at risk thousands of companies across Germany in 2022. Whereas some sectors such as steel, glass and chemicals have been seriously hit, the manufacturing industries operating in the areas linked to the energy transition (such as renewable energies and hydrogen production) should benefit from decisions taken to reach climate neutrality. Will the German industry benefit from the ambitious commitments agreed by the new coalition? The boom and bust of the solar sector in 2011 are a reminder that a strong internal demand does not necessarily translate into strong and resilient supply chains on the national territory. In the context of generous support schemes, several companies emerged in the 2000s benefiting from the strong demand for solar panels before being overwhelmed by Asian competitors. Nowadays, more than 90% of solar panels are imported from China. The level of ambition of the Federal government for the Energiewende has dramatically increased with the new coalition elected in 2021, the share of renewables to be reached in the power mix by 2030 being set at 80% (against 47% in 2022). The German wind industry has however been affected by a slowdown of the expansion of capacities, several rounds of onshore wind and solar auctions being in 2022 undersubscribed. The added value of the Energiewende in terms of job creation has been ambivalent so far. The country’s current industrial geography might be partly reshaped with the efforts made by northern and eastern States to deploy renewables and green hydrogen at large scale. Stakes are high for southern Germany since new spatial patterns are emerging in the automotive sector too. While Chinese competition in the solar and wind manufacturing sectors is tough, the Inflation Reduction Act has reinvigorated discussions around a stronger industrial policy.
- Topic:
- European Union, Electricity, Renewable Energy, Wind Power, Hydrogen, and Energy
- Political Geography:
- Europe and Germany
9. How Sweden Can Use its EU Presidency to Build the Civilian Security Dimension of the Eastern Partnership
- Author:
- Michal Baranowski, Mikołaj Bronert, Maximilian Kaminski, and Elene Kintsurashvili
- Publication Date:
- 01-2023
- Content Type:
- Policy Brief
- Institution:
- German Marshall Fund of the United States (GMFUS)
- Abstract:
- The EU’s Eastern Partnership (EaP) lacks a security dimension and this is an urgent reform need. In particular, the EU should become the leading provider of civilian security support in the EaP countries, particularly Ukraine. But significant weaknesses in this policy field inhibit its capability to do so. Sweden’s long-term focus on the EaP, its experience in augmenting domestic cyber and hybrid resilience as well as in placing the civilian aspect at the heart of its national security, and it its leading contribution to the EU’s Common Security and Defense Policy (CSDP) missions put it in a unique position to be a champion of the security dimension of the EaP during its presidency of the Council of the EU. Sweden can do so by pushing for: a EU-NATO memorandum of understanding on the EaP; the provision of a rapid financing mechanism to assist EaP countries in nonmilitary defense; a more coordinated training, planning, and implementing process for CSDP missions between EU actors and the EaP countries; a more targeted approach towards EaP countries; and prioritization of deepening of cooperation with EaP countries in the domain of hybrid threats.
- Topic:
- Security, Foreign Policy, NATO, European Union, and Partnerships
- Political Geography:
- Europe, Eastern Europe, Sweden, and Central Europe
10. Why the proposed Brussels buyers club to procure critical minerals is a bad idea
- Author:
- Cullen Hendrix
- Publication Date:
- 05-2023
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Concerned about critical mineral supply chains and its own strategic vulnerabilities, the European Union is advancing a buyers club to procure minerals critical to the clean energy transition, such as bauxite, cobalt, lithium, and nickel. The European Union is deeply dependent on imports of both raw and processed critical minerals and materials and thus highly exposed to global price volatility. The door appears to be open for the United States or other EU trading partners and like-minded countries to join this club. Decarbonization is not the only impetus behind the proposed Brussels buyers club. Both the European Union and United States view China’s dominance of critical mineral supply chains as a national security issue, because these minerals are key inputs to modern military technology. Hendrix agrees that supply chains for critical minerals desperately need widening to meet projected global demand and tackle climate change mitigation, but he warns that a purchasers club would not be a step in the right direction. A buyers club would be prone to free riding, set up distributive conflicts within the European Union, and reduce the share of climate mitigation benefits accruing to critical mineral–producing countries, many of which are developing and middle-income economies.
- Topic:
- Economics, National Security, European Union, Supply Chains, and Minerals
- Political Geography:
- China and Europe
11. The international tax agreement of 2021: Why it’s needed, what it does, and what comes next?
- Author:
- Kimberly Clausing
- Publication Date:
- 04-2023
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- In 2021, more than 135 jurisdictions agreed on transformative new international tax rules that would establish a minimum tax rate of 15 percent on multinational corporate income regardless of where it was reported. In December 2022, the European Union unanimously moved forward to implement this minimum tax, and other countries, including South Korea, Japan, Australia, Canada, and the United Kingdom, are also either implementing the tax or taking substantial steps toward implementation. In tandem, the United States should also reform its international tax system and adopt a stronger minimum tax. While the future of the international agreement is uncertain, it has important implications for the ability of governments worldwide to create tax systems that are administrable, fair, and efficient. The agreement also demonstrates important guiding principles for the future of multilateral cooperation on global collective action problems, including efforts to protect public health from future pandemics, address nuclear proliferation, and resolve territorial conflicts. US progress on international tax reform would enhance much needed international cooperation on these issues.
- Topic:
- Economics, Treaties and Agreements, Reform, European Union, and Tax Systems
- Political Geography:
- Europe and Global Focus
12. Integrating US and allied capabilities to ensure security in space
- Author:
- Nicholas Eftimiades
- Publication Date:
- 04-2023
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- Over the last two decades, the world entered a new paradigm in the use of space, namely the introduction of highly capable small satellites, just tens or hundreds of kilograms in size. This paradigm has forever changed how countries will employ space capabilities to achieve economic, scientific, and national security interests. As is so often the case, the telltale signs of this global paradigm shift were obvious to more than just a few individuals or industries. Air Force Research Laboratory’s Space Vehicles Directorate began exploring the use of small satellites in the 1990s. The Air Force also established the Operationally Responsive Space program in 2007, which explored the potential use of small satellites. However, both research efforts had no impact on the US Department of Defense’s (DOD’s) satellite acquisition programs. The advancement of small satellites was largely driven by universities and small commercial start-up companies.1 The introduction of commercial and government small satellites has democratized space for states and even individuals. Space remote sensing and communications satellites, once the exclusive domain of the United States and Soviet Union, can now provide space-based services to anyone with a credit card. Eighty-eight countries currently operate satellites, and the next decade will likely see the launch of tens of thousands of new satellites.2 Commercial and government small satellites have changed outer space into a more contested, congested, and competitive environment. The United States has shared space data with its allies since the dawn of the space age.3 Yet it also has a history of operating independently in space. Other domains of warfare and defense policy are more closely integrated between the United States and its allies and partners. The United States has military alliances with dozens of countries and strategic partnerships with many more.4 In recent years, there have been calls to coordinate with, or even integrate allied space capabilities into US national security space strategy and plans. In this regard, the US government has made significant advances. However, much work needs to be done. There is pressure on the United States to act quickly to increase national security space cooperation and integration, driven by rapidly increasing global capabilities and expanding threats from hostile nations and orbital debris. This paper examines the potential strategic benefits to US national security of harnessing allied space capabilities and the current efforts to do so, as well as barriers to achieving success. The paper identifies pathways forward for cooperating with allies and strategic partners on their emerging space capabilities and the potential of integrating US and allied capabilities.
- Topic:
- Security, Defense Policy, NATO, National Security, European Union, and Space
- Political Geography:
- Russia, Europe, Canada, North America, and United States of America
13. Beyond launch: Harnessing allied space capabilities for exploration purposes
- Author:
- Tiffany Vora
- Publication Date:
- 04-2023
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- The “United States Space Priorities Framework,” released in December 2021, confirmed the White House’s commitment to American leadership in space.1 Space activities deliver immense benefits to humankind. For example, satellite imaging alone is crucial for improvements in daily life such as weather monitoring as well as for grand challenges like the fight against climate change. Such breakthrough discoveries in space pave the way for innovation and new economies on Earth. Exploration is at the cutting edge of this process: it expands humankind’s knowledge of the universe, transforming the unknown into the supremely challenging, expensive, risky, and promising. US allies and partners accelerate this transformation via scientific and technical achievements as well as processes, relationships, and a shared vision for space exploration. By integrating these allied capabilities, the United States and its allies and partners set the stage for safe and prosperous space geopolitics and economy in the decades to come. However, harnessing the capabilities of US allies and partners for space exploration is complex, requiring the balance of relatively short-term progress with far-horizon strategy. Space exploration has changed since the US-Soviet space race of the 1960s. In today’s rapidly evolving technological and geopolitical environment, it is unclear whether the processes, relationships, and vision that previously enabled allied cooperation in space, epitomized by the International Space Station (ISS), will keep pace. Here, China is viewed as the preeminent competitor for exploration goals and capabilities—as well as the major competitor for long-term leadership in space.2 This development drives fears of space militarization and weaponization, prompting protectionist legislation, investment screening, and industrial policies that can disrupt collaboration among the United States and its key allies and partners.3 Further complication stems from the rise of commercial space, with opportunities and challenges due to the decentralization, democratization, and demonetization of technologies for robotic and crewed space exploration. This paper serves as a primer for current US space exploration goals and capabilities that will be critical to achieving them. It highlights arenas where US allies and partners are strongly positioned to jointly accelerate space exploration while also benefitting life on Earth. This paper concludes with recommended actions—gleaned from interviews with international experts in space exploration—for the US government as well as allied and partner governments to increase the number and impact of global stakeholders in space exploration, to remove friction in collaboration, and to guide the future of space toward democratic values.
- Topic:
- Security, Defense Policy, NATO, National Security, Science and Technology, European Union, Partnerships, and Space
- Political Geography:
- China, Europe, and Asia
14. Building Resilience? The Cybersecurity, Economic & Trade Impacts of Cloud Immunity Requirements
- Author:
- Matthias Bauer
- Publication Date:
- 03-2023
- Content Type:
- Policy Brief
- Institution:
- European Centre for International Political Economy (ECIPE)
- Abstract:
- EU Member States should call on the EU’s Cybersecurity Agency (ENISA) and the European Commission to abandon immunity requirements in the proposed EU Cloud Certification Scheme (EUCS). With immunity requirements in the EUCS, the EU risks opening a Pandora’s box, paving the way for data localisation, foreign ownership restrictions, and local establishment requirements in digital industries globally leading to rising trade tensions. ENISA’s current proposal could increase policymakers’ appetite for data localisation in the EU. It would empower the European Commission and Member State authorities to exclude foreign businesses from domestic cloud services markets and set a dangerous precedent for any data-intensive sector. The list of “sectors of high criticality” could be logically extended to both existing services (e.g., financial services) and to new technologies and business models, such as IoT in the energy and healthcare sectors, and autonomous driving in the transport sector. Non-EU jurisdictions would be pressured to respond in kind. EUCS immunity requirements would increase cloud adopters’ exposure to cybersecurity risks. Data localisation often creates obstacles to an integrated management approach towards cybersecurity risks. Country of headquarter and foreign ownership restrictions in the proposed EUCS risk removing global frontier cybersecurity technologies from Member State markets. Excluding these and other EU and non-EU companies from EU Member States could result in a long-lasting security deficit of EU cloud adopters vis-à-vis organisations that are still able to use reliable and often best-practice cloud services offered by providers from outside EU Member States. Immunity requirements in the EUCS are discriminatory by design. They could provoke retaliatory measures by EU trading partners, either unilaterally or through WTO or bilateral FTA (e.g., UK-EU) Dispute Settlement. Local establishment requirements and foreign ownership restrictions would by design discriminate against foreign cloud providers. US-headquartered companies, which currently serve more than 75% of the EU market, would be most affected by EU immunity requirements.[1] Depending on US preferences and the scope of the proposed EUCS, the EU could be subject to retaliatory tariffs of up to USD 12 billion worth of EU goods exports or equivalent restrictions for EU services exports to the US. Other governments could lodge complaints via the WTO as well (e.g., Singapore, Japan, Canada and others, where cloud development is advancing rapidly). EU suppliers are currently in no position to manage a broad-based transition to cloud, and thus such requirements would delay significant efficiency and security gains that current foreign suppliers could offer. A blanket exclusion of non-EU cloud vendors would also likely undermine Europe’s objective to achieve a 75% cloud adoption rate for EU enterprises. Sensitive European businesses and public sector organisations would have to delay migration and make do with legacy systems for a very long time. Contrary to large countries, these negative impacts would be much more pronounced for smaller EU Member States, which lack the presence of large domestic incumbents and generally rely much more on an open international trading regime for digital services. ENISA’s cloud certification scheme should be limited to technical and transparency requirements. Immunity requirements for non-personal data should be addressed in bilateral initiatives such as the EU-US Trade and Technology Council (TTC) or agreements requiring a company that sought to offer services of the highest level of sensitivity to be headquartered in a country granted adequacy with EU data protection rules, or a country that is an adherent to the OECD’s Trusted Government Access principles, or (concerning the US) a participant in the upcoming Trans-Atlantic Data Privacy Framework. Excluding foreign companies from operating in the EU would have far-reaching consequences. If that is the intent, it should require a sound legal analysis and the decision should be taken through a formal legislative procedure at the EU level.
- Topic:
- Economics, Markets, European Union, Cybersecurity, Digital Economy, Trade, and Resilience
- Political Geography:
- Europe
15. The Economic Dividend of Competitiveness
- Author:
- Fredrik Erixon, Oscar Guinea, Philipp Lamprecht, Elena Sisto, and Erik van der Marel
- Publication Date:
- 03-2023
- Content Type:
- Policy Brief
- Institution:
- European Centre for International Political Economy (ECIPE)
- Abstract:
- In a world of technological and economic rivalry, the EU must devote increased attention to its competitiveness. Higher levels of competitiveness will help the EU build a more prosperous economy which will in turn produce innovation and resources to address the great challenges of our time. ECIPE published a study presenting a competitiveness compass with concrete policy recommendations that will improve EU’s competitiveness. These policy recommendations, once implemented, will bring tangible benefits to the EU economy in the form of higher levels of trade and productivity. This report presents five scenarios in which the EU pursues competitiveness policies that lead to higher economic growth.
- Topic:
- Economics, Science and Technology, European Union, Economic Growth, and Competition
- Political Geography:
- Europe
16. Building a Mature UK Trade Policy
- Author:
- David Henig
- Publication Date:
- 03-2023
- Content Type:
- Policy Brief
- Institution:
- European Centre for International Political Economy (ECIPE)
- Abstract:
- Global Britain has not delivered according to the hopes expressed by supporters of leaving the EU. Trade with the rest of the world has not grown to make up for leaving a bloc with seamless trade, early Free Trade Agreements with Australia and New Zealand are of minor economic significance, and it is hard to discern much of a strategy beyond completing a few more similar deals. Meanwhile the world of trade policy is transformed since 2016, negatively. The US has essentially declared its national interests to be more important than global rules, while the EU wants to act unilaterally as the global regulator. In both, the climate crisis is being used as an excuse to reintroduce protectionist measures threatening economic damage and global stability. Expectations of what a UK outside of the EU could achieve were exaggerated, but nonetheless the country could be doing a lot better in its trade policy. There is no good reason for such tensions as exist with a broad range of frustrated stakeholders, the absence of clear purpose on UK strengths such as services, or the defensiveness that seemingly takes pride in secrecy and resistance to proper scrutiny. Adjustment time was inevitable, but six years should have been enough.
- Topic:
- Economics, European Union, Free Trade, and Trade Policy
- Political Geography:
- United Kingdom and Europe
17. Reforming Standard Essential Patents: Trade, Specialisation, and International Jurisprudence
- Author:
- Fredrik Erixon and Oscar Guinea
- Publication Date:
- 04-2023
- Content Type:
- Policy Brief
- Institution:
- European Centre for International Political Economy (ECIPE)
- Abstract:
- The European Commission is considering a radical overhaul of the system governing Standard Essential Patents (SEPs). A leaked proposal suggests that the Commission wants to take control over the registration of SEPs, take efforts to regulate their essentiality, and intervene in negotiations over royalty rates if parties do not come to an agreement. The underlying assumption is that such a system will benefit SEP implementers and the European economy, and that the common holders of SEPs will be cut down a size or two. The logic behind this policy is that, since there are more SEP implementers than holders, any change in favour of implementers will have a net positive effect on the EU economy. However, this is doubtful. The EU is a R&D powerhouse for many of the technologies protected under SEPs and since most of the global production of the goods using these technologies is done outside Europe, the EU is a net exporter of innovation and a receiver of revenues from the licensing of these technologies. Using data on trade, specialisation, and market revenues, this paper comes to a different conclusion: the EU economy is likely to be a net loser if the balance between holders and implementers is changed. Moreover, there is a general and fundamental interest for Europe to preserve a system of standards and SEPs that allows it to punch above its weight in international policies and practices in standards and patents.
- Topic:
- Reform, European Union, Trade, Patents, Specialization, European Commission, and Jurisprudence
- Political Geography:
- Europe
18. Trade and Competitiveness: Putting the Firm at the Centre of the Analysis
- Author:
- Lucian Cernat and Oscar Guinea
- Publication Date:
- 06-2023
- Content Type:
- Policy Brief
- Institution:
- European Centre for International Political Economy (ECIPE)
- Abstract:
- The European Commission published its communication for the long-term competitiveness of the EU. Trade and Open Strategic Autonomy were among the selected policy areas that will drive EU competitiveness in the future and trade with the rest of the world as a share of EU Gross Domestic Product (GDP) was the selected indicator to measure progress. This Policy Brief proposes a new set of indicators that complement this and similar indicators that focus on the value of trade. Using the Trade by Enterprise Characteristics (TEC) database, this paper produces indicators that measure the number of exporters, non-EU suppliers, non-EU customers, and foreign companies. By putting the firm at the centre of the analysis, these indicators offer insights that complement policy-makers’ views on trade and competitiveness.
- Topic:
- European Union, GDP, Trade, Strategic Autonomy, European Commission, Economic Competition, and Competition
- Political Geography:
- Europe
19. The EU can manage without Russian liquified natural gas
- Author:
- Ben McWilliams, Giovanni Sgaravatti, Simone Tagliapietra, and Georg Zachmann
- Publication Date:
- 06-2023
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- The European Union has committed to eliminate all Russian fossil-fuel imports by 2027. Progress has been made, with sanctions on oil and coal already introduced. The glaring exception is natural gas, on which the EU has so far refrained from imposing limitations, owing to greater dependence on Russia. Nevertheless, pipeline gas imports have fallen by four-fifths following Russia’s weaponisation of gas supplies. However, Russia’s exports of liquified natural gas (LNG) to the EU have increased since the invasion of Ukraine. The EU needs a coherent strategy for these LNG imports. Our analysis shows that the EU can manage without Russian LNG. Anticipated impacts are not comparable to those felt in 2022 as Russian pipeline gas dried up. The regional impact would be most significant for the Iberian Peninsula, which has the highest share of Russian LNG in total gas supply. Meanwhile, the global LNG market is tight, and we anticipate that Russia would find new buyers for cargos that no longer enter Europe. We discuss the options available to the EU. Wait-and-see implies delaying any action until 2027, while soft sanctions would discourage additional purchases but not break long-term contracts. We argue instead for an EU embargo on Russian LNG, to reduce exposure to an unreliable and adversarial entity, and to limit the extent to which EU consumers fund the Russian state. The embargo may be designed to allow purchases only if they are coordinated via the EU’s Energy Platform, with limited volumes and below market prices. This could be accompanied by the implementation of a price cap on Russian LNG cargos that use EU or G7 trans-shipment, insurance or shipping services.
- Topic:
- European Union, Gas, Energy, and Green Economy
- Political Geography:
- Russia and Europe
20. Can Chinese growth defy gravity?
- Author:
- Alicia Garcia-Herrero
- Publication Date:
- 06-2023
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- Chinese growth, astounding since the beginning of the reform era, has slowed in the last decade. We offer a baseline estimate (based on the current trend) of China’s medium-term growth rate, which we project to fall to 2.4 percent by 2035. Several factors create uncertainty around this baseline. China’s rapid aging is already incorporated into our long-term growth scenario, but its impact on growth will depend on how China’s remaining urbanisation process spreads over time, how the shrinking labour supply affects labour productivity and whether the decline in total factor productivity growth, reflecting the lack of reform during the last decade and possibly the rising role of the state, can be reversed. Investment in China, for decades the largest factor in China’s growth, is expected to contribute less to growth given the increasingly low return on assets, particularly on state-led investment. The rapid piling up of public debt is also becoming a heavy burden for the Chinese economy. Finally, the COVID-19 pandemic may have left significant scarring effects, such as structurally high youth unemployment and low investment confidence. On the upside for China, the rise in human capital and research and development expenditure may support innovation and growth, but the magnitude of this effect is uncertain, because it is unclear if higher innovation will translate into higher total factor productivity, and because of the United States’s push to contain China technologically.
- Topic:
- Industrial Policy, European Union, Economic Growth, and COVID-19
- Political Geography:
- China, Europe, and Asia