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Begin New Search Content Type Policy Brief Publication Year within 10 Years

61. Strategies for Assessing Triple Nexus Initiatives and Integrating Peace Aspects – Insights from Niger

Author:
Christina Plesner Volkdal
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:
The Triple Nexus approach represents a paradigm shift in how international organizations, including UNICEF, address complex crises that span humanitarian, development, and peace dimensions. UNICEF must navigate the delicate balance between adhering to the humanitarian principles of neutrality, impartiality, independence, and humanity while engaging in development and peace-building activities that may require aligning with government policies and engaging in politically sensitive contexts. There is a significant challenge in developing metrics and methodologies to measure the synergies and outcomes of the Triple Nexus approach effectively. This includes quantifying how initiatives contribute to peace interacting with humanitarian and development outcomes. UNICEF's approach in Niger, implementing food security policies to respond to humanitarian needs while simultaneously operating as a development program, holds the potential to positively impact peace in the region, thus aligning with the Triple Nexus framework.
Topic:
Development, International Organization, Food Security, Crisis Management, and UNICEF
Political Geography:
Africa and Niger

62. Two Years at the Forefront: Exploring the needs and experiences of women-led, women’s rights and LGBTQIA+ led organizations two years into the Ukraine humanitarian response

Author:
Charlotte Greener
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
Two years on from the escalation of the war in Ukraine, Oxfam spoke with a number of people leading the work of local and national women-led organisations (WLOs), women’s rights organisations (WROs), LGBTQIA+ led organizations, and other local non-governmental organizations (NGOs) addressing the needs of women, girls and gender minorities in Poland and Ukraine. We wanted to understand how the humanitarian crisis has impacted them, personally and as organizations, and their needs and priorities for the future. At the beginning of the humanitarian crisis following the escalation of the war in Ukraine, local WLOs, WROs and LGBTQIA+ led organizations were some of the first on the ground responding to their communities’ needs, both within Ukraine and in neighboring countries, and two years on, they are still at the forefront of providing assistance. The conversations that we had with these organisations highlighted that they are facing key challenges in continuing to sustain their vital role in responding to humanitarian needs; the need for greater investment in their voice and agency as decision-makers in the humanitarian response; and the need for flexible support to these organisations that allows them to carry out their important work across all stages of the response to the humanitarian crisis.
Topic:
Human Rights, Women, Refugees, LGBT+, Humanitarian Crisis, Civil Society Organizations, Gender, and Humanitarian Response
Political Geography:
Europe, Ukraine, and Poland

63. Inflicting Unprecedented Suffering and Destruction: Seven ways the government of Israel is deliberately blocking and/or undermining the international humanitarian response in the Gaza Strip

Author:
Oxfam Publishing
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
Over five months into the Israeli mass atrocities on the Gaza Strip, in response to the horrific 7 October 2023 attacks by Palestinian armed groups, a meaningful and safe humanitarian response is made impossible by the government of Israel. In this briefing we outline seven fundamental humanitarian access constraints.
Topic:
War Crimes, Atrocities, Palestinian Authority, Humanitarian Response, Blockade, 2023 Gaza War, and Forced Displacement
Political Geography:
Middle East, Israel, Palestine, and Gaza

64. Climate Plans for the People: Civil society and community participation in national action plans on climate change

Author:
Duncan Pruett and Christina Hill
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
In 2024, all countries will be updating and submitting their Nationally Determined Contributions (NDCs). These national climate plans outline commitments towards tackling climate change. These plans impact all walks of life and must therefore be inclusive of the whole of society. By examining recent practices across 11 countries, Oxfam found that NDCs were not sufficiently inclusive, often failing to involve civil society and communities who bear the burden of climate change and the impact of climate transition plans. This paper explores who the main actors are in NDCs, which stakeholders have not been included, and why. In order to foster a sustainable, equitable, and inclusive social, economic, and political environment for climate action, the paper makes recommendations for the UN, governments, donors, international agencies and civil society.
Topic:
Civil Society, Climate Change, Participation, Adaptation, and Mitigation
Political Geography:
Global Focus

65. Unaccountable Adaptation: The Asian Development Bank’s overstated claims on climate adaptation finance

Author:
Sunil Acharya, Rasmus Bo Sørensen, and Hans Peter Dejgaard
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
Despite positioning itself as the ‘climate bank of Asia and the Pacific’, it is difficult to ascertain the Asian Development Bank’s claims of climate adaptation finance. Oxfam analysed the bank’s 2019–2023 climate finance portfolio and conducted a detailed assessment of 15 climate adaptation projects, comprising 43% of reported adaptation finance for FY 2021 and 2022. Oxfam found that the Asian Development Bank (ADB) hugely overstates the reported amounts with potential over-reporting of 44% in average for the assessed projects. This briefing paper calls for a transformative shift in the ADB’s adaptation finance strategies. The ADB must improve the accuracy and transparency of climate finance reporting and realign financial flows with the needs of the region's most vulnerable communities.
Topic:
Climate Change, Development, Finance, Accountability, Transparency, Adaptation, and Development Finance
Political Geography:
Asia

66. Beyond Crises: The future of Special Drawing Rights as a source of development and climate finance

Author:
Didier Jacobs
Publication Date:
06-2024
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
The allocation of Special Drawing Rights (SDRs) during the COVID-19 pandemic has generated considerable interest in using SDRs as a tool for development and climate finance. This policy brief argues that the monetary logic that underpins SDRs justifies regular allocations of at least $200 billion a year, and more than doubling the share of low-and middle-income countries. Once allocated, governments can use SDRs in multiple ways, including to fund some development or climate projects. The brief also discusses reforms to deepen the SDR system in the interest of all countries.
Topic:
Development, Climate Finance, Sustainable Development Goals, Economic Policy, and IMF
Political Geography:
Global Focus

67. Decoding China’s Technology and Industrial Policy: Seven Terms You Need to Know

Author:
Barry Naughton, Siwen Xiao, and Yaosheng Xu
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:
China’s technology and industrial policy programs have grown in scope and intensity since 2020, but the vocabulary used to describe them is vague and often misleading. This policy brief decodes seven essential terms and shows that they have concrete and complementary meanings. When understood in concert, they reveal the establishment of a large-scale, government-directed program of mission-oriented research, development, and application. Together these terms outline a substantial expansion of the Chinese government’s direct role in organizing economic activity, and hint at some of the limits of that expansion.
Topic:
Economics, Industrial Policy, Science and Technology, Research and Development, and Terminology
Political Geography:
China and Asia

68. The Quantum Race: U.S.-Chinese Competition for Leadership in Quantum Technologies

Author:
Juljan Krause
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:
Quantum computing is poised to unleash innovation across various sectors, from materials science to pharmaceutical and medical research, finance, logistics, and even climate change management. Quantum computing also has the potential to provide the backbone for future artificial intelligence and autonomous systems that cannot be realized with digital hardware alone, while quantum communication can strengthen security in cyberspace. For these reasons, quantum technologies feature prominently in the emerging technologies race between the United States and China. In this policy brief, IGCC postdoctoral fellow Juljan Krause analyzes China’s advances in quantum communication, which aim to signal China’s technological leadership while protecting Chinese communications from foreign surveillance. He argues that Chinese leadership in quantum communication will have strategic repercussions, particularly as it is likely to give China’s efforts to shape global industry standards additional momentum. Even if quantum communication has no immediate military implications, policymakers should consider how the technology could embolden China further.
Topic:
Industrial Policy, Science and Technology, Innovation, and Quantum Computers
Political Geography:
China, Asia, and Indo-Pacific

69. Decoding the Global Goal on Adaptation at COP28

Author:
Olivia Fielding
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
International Peace Institute (IPI)
Abstract:
Although adaptation has historically received less attention than mitigation, finance, and more recently loss and damage, it remains a key aspect of climate action as we near the Paris Agreement’s 1.5°C threshold. This paper discusses the agreement on a framework for the Global Goal on Adaptation (GGA) as one of the most important outcomes of the twenty-eighth UN Climate Change Conference (COP28) in Dubai, providing an overview of and key takeaways from the document. The final decision text contains language on long-term transformational adaptation, which was seen as a success by many developing countries. It also sets targets for a finalized list of thematic areas—a contentious subject and another success for many developing countries. These targets explain what success looks like, ultimately aiming for the high-level objective of well-being for people and planet, while leaving the details of achieving this objective to countries. The text also includes targets for the iterative adaptation cycle. In addition, there were a number of paragraphs on means of implementation, though many developing countries saw these as a failure, as they provide little new or significant language. The next step will be to develop indicators for the targets in the GGA framework. Ideally, the negotiators should set the strategic direction of this process while leaving the selection of indicators to experts. It will be important to keep the list of indicators short, account for data gaps, and draw on existing indicators to the extent possible. While there is much work to be done to give life to the GGA framework adopted at COP28, it has the potential to be the new guiding light for climate action.
Topic:
Climate Change, Adaptation, and Conference of the Parties (COP)
Political Geography:
Global Focus

70. Gender Inclusion in the Pandemic Agreement: A Growing Gap?

Author:
Sara E. Davies and Clare Wenham
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
International Peace Institute (IPI)
Abstract:
There is increasing evidence of the gendered outcomes and secondary effects of epidemics and pandemics. Women make up a disproportionate share of the healthcare workforce, absorb much of the additional unpaid labor during health crises, and are exposed to increased gender-based violence and insecurity around sexual and reproductive healthcare during pandemics, among other effects. A gender-sensitive approach to health emergencies is essential for pandemic preparedness, prevention, response, and recovery. Despite the World Health Organization’s (WHO) awareness of these impacts, it does not systematically consider them in its pandemic preparedness and response. WHO’s historical “add women and stir” approach is evident in the proposed amendments to the International Health Regulations (IHR), whose attention to gender focuses primarily on committee representation. Gender sensitivity is also limited in the drafts of the WHO Convention, Agreement or Other International Instrument on Pandemic Prevention, Preparedness and Response (CA+), currently in development. Gender-inclusive language in the CA+ is essential for effective international coordination to prepare, prevent, respond to, and recover from health emergencies. This paper examines the extent to which gender has been included in the zero-draft CA+ process through a desk review of the drafts that have been published (as of March 2024), focusing on explicit mentions of gender and women. The report documents the progress to date on integrating gender equality into the CA+ and offers the following recommendations for CA+ negotiators, WHO, and member states. Future drafts of the CA+ should have provisions that address a wider range of the gendered impacts of pandemics; WHO should develop an IHR/CA+ repository; INB negotiators should directly engage relevant UN entities to recommend methods of integrating gender into the CA+; States that claim to have a principled stance on gender equity should transparently champion gender-inclusive language; and The CA+ should consider and incorporate initial lessons learned from the implementation of the gender-inclusive language in the IHR’s Joint External Evaluation (JEE) of states.
Topic:
Women, Pandemic, Inclusion, WHO, and Gender
Political Geography:
Global Focus

71. Advancing Feminist Foreign Policy in the Multilateral System: Key Debates and Challenges

Author:
Evyn Papworth
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
International Peace Institute (IPI)
Abstract:
Since the first feminist foreign policy (FFP) was adopted by Sweden in 2014, sixteen countries have either published an FFP or announced their intention to do so. Some proponents of FFPs have indicated that these policies can be a way to democratize and transform multilateralism, integrating feminist approaches and principles into multilateral institutions and leading to more inclusive and equitable outcomes. This requires seeing FFPs as not just a “women’s issue” but also as a way to reinvigorate an outdated and inequitable system through transformational change and the interrogation of entrenched power dynamics, including in areas such as trade, climate, migration, and disarmament. One obstacle to realizing the potential of FFPs is that there is no single definition of feminist foreign policy. Part of the challenge is that there are many interpretations of feminism, some of which reflect a more transformative, systemic approach than others. Ultimately, there is no single way to “do” feminism, and approaches to FFP should, and will, vary. If FFP is to survive and grow, it will encompass contradictions and compromises, as with all policymaking, and civil society and member states will have to collaborate to advance feminist principles in the multilateral arena. To explore the future of FFPs, the International Peace Institute, in partnership with the Open Society Foundations and in collaboration with the co-chairs of the Feminist Foreign Policy Plus (FFP+) Group, Chile and Germany, convened a retreat on Feminist Foreign Policy and Multilateralism in July 2023. Drawing on insights from the retreat, this paper discusses five ongoing debates that FFP-interested states should meaningfully engage with: Militarization, demilitarization, and the root causes of violence; Global perspectives and postcolonial critiques; The branding and substance of FFPs; The domestication of FFPs; and Accountability and sustainability.
Topic:
Foreign Policy, Feminism, and Multilateralism
Political Geography:
Global Focus

72. The changing dynamics of European electricity markets and the supply-demand mismatch risk

Author:
Conall Heussaff and Georg Zachmann
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Meeting Europe’s 2030 climate targets will require massive clean-electricity investment. To facilitate these investments, state-backed de-risking schemes such as contracts for difference (CfDs) are needed. Their role in supporting renewables has been consolidated by the European Union’s recently agreed electricity market design reform. Under such state-backed schemes, the distribution of costs between the market and the state will depend on the balance of supply and demand. Lower demand will decrease spot-market prices, reducing market costs but increasing the cost to CfD-issuing states. If electrification of European energy demand does not keep pace with the electricity supply expansion, tens of billions of euros annually could be channelled through state contracts, generating costs that must ultimately be recovered from consumers. A cost-efficient, managed transition will require European coordination of electricity supply, demand and network investments. Clean electricity supply and demand should be synchronised through a combination of state interventions and market mechanisms. Undersupply of clean power will mean a failure to meet climate targets, but oversupply can be costly too. To manage the costs of renewable de-risking schemes and to accelerate energy-system decarbonisation, flexible electricity systems should be promoted, policies to encourage electrification could be implemented and cost-recovery arising from state-backed renewable support schemes should be fair.
Topic:
Climate Change, Markets, Electricity, Energy, and Supply and Demand
Political Geography:
Europe

73. Overcome divisions and confront threats: Memo to the Presidents of the European Commission, Council and Parliament

Author:
Maria Demertzis, André Sapir, and Jeromin Zettelmeyer
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
In the last five years, the European Union managed to find its way through a series of major shocks, including the pandemic and the 2022 surge in energy prices. The response was in many ways remarkable, including unprecedented EU borrowing to fund the NextGenerationEU economic recovery programme and a coordinated reduction in energy demand. However, these crises have left the EU in a bruised state. The pandemic recession and energy-support measures have squeezed fiscal space. Higher energy prices have persisted and EU industrial competitiveness has been eroded. The productivity and per-capita income gap with the United States has widened. Meanwhile, the world around the EU has become more threatening and fragmented. The military situation in Ukraine remains precarious. China has become both more authoritarian and more assertive. The US shift toward protectionism has become entrenched. There is less consensus for measures to combat climate change. In the face of all this, the challenges confronting you are substantial. In the next five years, you must continue to support Ukraine while implementing measures to reinvigorate EU growth, meet the 2030 climate targets and lay the ground for meeting the 2040 goals, and secure faster emissions reductions beyond the EU’s borders. Social cohesion needs to be restored to head off threats to the EU model. More needs to be done to improve EU external security. Promoting growth and enhancing cohesion will entail further deepening of the single market in areas with the highest growth impact, doing more to support innovation and defending competition, openness and multilateralism. Safeguarding the European Green Deal means boosting green industrialisation and fair burden-sharing, while scaling up international climate finance. Strengthening security requires continued support for Ukraine and the addressing of economic security risks. Underpinning all of this, a serious effort must be made to improve EU governance – and it must be done without creating further division.
Topic:
Security, European Union, European Parliament, European Commission, Energy, Regional Politics, Competition, European Council, and Threat Assessment
Political Geography:
Europe

74. How to finance the European Union’s building decarbonisation plan

Author:
Ugnė Keliauskaitė, Ben McWilliams, Giovanni Sgaravatti, and Simone Tagliapietra
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
By 2030, the European Union must reduce emissions from the heating and cooling of buildings – responsible for 13 percent of EU emissions – by the equivalent of the annual emissions of Slovakia. This requires a near tripling of the current decarbonisation rate. But the time gap between high upfront costs and long-term payback from renovation works deter consumers from investing in energy renovation. To address these challenges, the EU has introduced a policy toolkit that includes strengthened price signals against fossil-fuel heating through emissions trading, and setting energy-consumption reduction targets in the Energy Performance Building Directive (EPBD). EU countries must take the EPBD targets seriously and implement policies to accelerate building retrofits and the adoption of clean heating. If they don’t, there is a risk that EU climate targets will not be met, and the costs for households of subjecting domestic heating to emissions trading could be almost twice the higher costs seen during the 2022 energy crisis. We estimate that achieving the EPBD’s energy savings targets requires filling an investment gap of about €150 billion per year up to 2030. This is a daunting but feasible goal. By leveraging energy savings from electrification and retrofitting to reduce renovation costs, the investment gap could be more than halved. Additionally, effective use of EU funds and emissions trading revenues will further shrink the gap. A mix of grants, preferential loans and obligations is needed, as no single policy will speed up energy renovations. Prioritising grants for the worst-performing buildings, often occupied by vulnerable consumers, will yield climate benefits and benefits in terms of improved air quality, health, productivity, energy security and lower future government outlays to alleviate energy poverty. Traditional public subsidies have not successfully engaged the banking sector, which now must help to foster private-public financing mechanisms. Countries also need to adjust relative energy prices for heating through taxation and subsidies, and expand one-stop-shops to streamline the renovation process for consumers.
Topic:
European Union, Carbon Emissions, Decarbonization, and Energy
Political Geography:
Europe

75. Re-energising Europe’s global green reach

Author:
Giovanni Sgaravatti, Simone Tagliapietra, and Cecilia Trasi
Publication Date:
06-2024
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The goals of decarbonisation, competitiveness and strategic autonomy will underpin the implementation of the European Green Deal during the 2024-2029 European Union institutional cycle. To strike the right balance between these sometimes conflicting objectives, EU policymakers should focus on both domestic and international aspects of the Green Deal. Domestically, they must ensure implementation of the agreed climate plan, avoiding inaction or delay. Internationally, they must establish a new green-diplomacy and partnerships strategy, which will support global decarbonisation while addressing competitiveness and strategic autonomy concerns. The current EU approach to green diplomacy is uncoordinated, lacking a clear strategy and appropriate resources. Given the EU’s limited share of annual global emissions, supporting decarbonisation abroad is fundamental to meet the global net-zero emissions goal. The EU’s green diplomacy and partnerships need to be strengthened and expanded in a pragmatic and coherent manner. The main priorities include focusing on the implementation of international emissions reduction pledges, a new diplomatic push for carbon pricing and international green taxation, the creation of streamlined partnerships for green industrialisation with major partner countries and the promotion of new global trade and climate agreements. To succeed in these, a revision of the current governance of EU global green action will be required.
Topic:
Climate Change, European Union, Partnerships, Carbon Emissions, and Green Transition
Political Geography:
Europe

76. The implications of the European Union’s new fiscal rules

Author:
Zsolt Darvas, Lennard Welslau, and Jeromin Zettelmeyer
Publication Date:
06-2024
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
European Union countries are required by the EU Treaty to keep their budget deficits within 3 percent of GDP, and their public debt within 60 percent of GDP. A new framework to enforce these rules is based on country-specific debt sustainability analyses (DSA) and uses a single indicator, a measure of public expenditure, as the annual fiscal policy target. These changes are welcome. To assess the sustainability of public finances, it is much better to focus on the likely evolution of the debt path than to rely on simple numerical rules. Public expenditures net of changes to tax policy are a far better target for fiscal policy than the deficit, since they are under the control of the government and cannot give rise to pro-cyclical fiscal policy (excess spending in good times, fiscal cuts in bad times). These features could increase the framework’s efficiency and improve compliance. However, the new framework also contains numerical safeguards to ensure a minimum pace of debt and deficit reduction. These might overwrite the DSA-based requirements and could undermine the rationale for the new rules and the incentives for compliance. The safeguards could also introduce some pro-cyclicality and, more importantly, could hold back increases in public investment. Our calculations show that the new framework will require ambitious fiscal adjustments from high-debt countries, though less than would have been required by the previous framework. Numerical safeguards will not be a significant constraint in the first application of the framework in 2024, except in the case of Finland. In the next application, in 2028, they imply for France and Italy greater fiscal adjustment than required by the DSA and the 3 percent benchmark. There is ambiguity about the consistency of the new fiscal rules and the largely-unchanged excessive deficit procedure (EDP), and whether proposed reforms and investment will influence the DSA. This could interfere with the successful application of the framework. We recommend that the EDP should require the same adjustment as the DSA, a method- ology should be developed to estimate the quantitative impact of proposed investments and reforms, and the DSA methodology should be revised. In case EU countries’ investment plans on aggregate do not fill the green public-investment gap, we recommend a new EU facility to foster such investments.
Topic:
Budget, European Union, Investment, and Fiscal Policy
Political Geography:
Europe

77. The economic case for climate finance at scale

Author:
Patrick Bolton, Alissa M. Kleinnijenhuis, and Jeromin Zettelmeyer
Publication Date:
06-2024
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
It will be impossible to contain the global temperature rise to 1.5 to 2 degrees Celsius above pre-industrial levels unless emerging market and developing economies (EMDEs) decarbonise much more rapidly. This policy brief examines the economic case for advanced-country financial support for replacement of coal with renewable energy sources in EMDEs. Such conditional financial support is necessary in the sense that an exit from coal consistent with keeping the global temperature rise to between 1.5°C and 2°C will not happen without it, desirable from the perspective of the financier countries, and financially feasible. Although the global economic benefits of phasing out coal are very large, the costs of exiting coal generally exceed the benefits to EMDEs. However, the collective economic benefits to advanced countries greatly exceed those costs. These net benefits are positive even for small coalitions of advanced countries (G7 or G7 plus EU). The fiscal costs of financing the coal exit in EMDEs (without China) are modest as a share of G7+EU GDP at about 0.3 percent of GDP per year, assuming public-sector participation in renewable energy investment costs through blended finance of around 25 percent. Although providing climate finance to EMDEs is economically desirable and feasible from the G7 perspective, it is not happening at the necessary scale, partly because of incentives and political-economy challenges. Advanced countries are more likely to be willing to commit financing to climate action outside their borders if they have more control over how this money is spent. Developing countries are reluctant to phase out coal unless sufficiently large financial support is forthcoming for renewable investments that are consistent with their development goals. These problems could be overcome by tying renewable finance to a coal phase-out. Already-existing Just Energy Transition Partnerships with South Africa, Indonesia and Vietnam are prototypes of this approach. They should be scaled up, with sufficient grants to pay for coal closures and the social transition in coal communities, by explicitly conditioning funding on a coal phase-out and through a stronger governance structure to implement these deals.
Topic:
Climate Change, Emerging Markets, Climate Finance, Renewable Energy, Coal, Carbon Emissions, and Emerging Economies
Political Geography:
Global Focus

78. Three risks that must be addressed for new European Union fiscal rules to succeed

Author:
Lucio Pench
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The debate on the reform of the European Union’s fiscal rules, the Stability and Growth Pact, has largely focused on their design. This nearly exclusive focus has distracted attention from the equally, if not more, important aspects of implementation. The reform, completed in April 2024, left implementation unaddressed, or at least open to very different potential outcomes. In particular, the reform failed to clarify the interplay between EU countries’ medium-term fiscal structural plans (MTFSPs), which embody the new focus on debt sustainability, and the excessive deficit procedure (EDP), which remains the main enforcement tool under the rules. The need for clarification is urgent as several countries are set to enter EDPs for breaching the SGP’s 3 percent of GDP deficit threshold at the same time as their first MTFSPs are endorsed in autumn 2024. There is a risk that the adjustment paths prescribed by EDPs may be at least temporarily less demanding than the debt-sustainability requirements of the MTFSPs would normally imply. Even if consistency between EDPs and MTFSPs is ensured from the start, inconsistencies may arise over time and be resolved in a way that further postpones the necessary adjustment. The main risk is that the 3 percent of GDP deficit might be perceived as the only target that matters for countries that enter EDPs in 2024, as repeated revisions of the MTFSPs undermine the cogency of the debt sustainability requirements. This scenario is likely to materialise if the countries are allowed to exit their EDPs upon bringing their deficits to or below 3 percent of GDP, while being still far from the necessary correction of the debt trajectory. It is important to shape countries’ expectations on the implementation of the upcoming EDPs in a way that is conducive to the immediate internalisation of the debt sustainability constraint implied by the new rules, rather than allowing it to be viewed as a distant objective. This change in expectations could be achieved by clarifying that, even if a country has been placed in an EDP only for breach of the deficit criterion, it should also satisfy the debt criterion for the procedure to be abrogated.
Topic:
Debt, Reform, European Union, Fiscal Policy, and Sustainability
Political Geography:
Europe

79. How to de-risk: European economic security in a world of interdependence

Author:
Jean Pisani-Ferry, Beatrice Weder di Mauro, and Jeromin Zettelmeyer
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Pandemic-related supply disruptions, the energy crisis provoked by Russia’s invasion of Ukraine and economic coercion by China have put economic security high on the European Union policy agenda. The question is how exactly the EU should ‘de-risk’ its external economic relationships without foregoing the benefits of trade. The standard answer is that it should identify product-level trade dependencies, mainly on the import side, and reduce them, mainly through diversification of suppliers, while otherwise maintaining maximum trade integration. This Policy Brief argues that this answer falls short. First, product-level dependencies cannot be identified reliably even with sophisticated analysis and data. As a result, both ‘missed dependencies’ and ‘false positives’ are inevitable. Second, external shocks and coercion could be propagated through exports, productive assets held abroad and financial channels as much as through imports. The analysis has five main implications Import de-risking should focus on a few product categories for which the costs of supply interruptions would be unquestionably large. This reduces false positives. De-risking and/or buffers to deal with exports and financial coercion require more attention. De-risking must be complemented by raising resilience against all shocks, whatever theirorigin. This requires a deeper and broader European single market. De-risking and resilience must be complemented by deterrence. A sufficiently high probability of chronic trade conflict – or one very large conflict – may justify reducing overall integration with a large trading partner, on both the export andimport sides. EU economic security policies have been right to emphasise the reduction of import dependence on chips and critical raw materials, and the creation of a powerful legal instrument to deter coercion (the Anti-Coercion Instrument). In most other respects, there is room for improvement.
Topic:
European Union, Risk, Trade, Imports, Economic Security, and Interdependence
Political Geography:
China and Europe

80. Broader border taxes: a new option for European Union budget resources

Author:
Pascal Saint-Amans
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
There is widespread agreement on the need for new resources to fund the European Union's budget in order to meet increasing spending demands, not least repayment of debt incurred as part of the EU’s post-pandemic economic recovery. In particular it is seen as desirable that the EU should have ‘own’ resources, or reliable ongoing revenue streams. But there is little agreement on what new own resources could consist of. Limited reform so far has led to the introduction of a levy paid by EU members depending on plastic packaging waste generated in their territory and not recycled. Meanwhile, the European Commission has proposed resources for the EU budget from emissions trading revenues, and from levies collected under the EU carbon border adjustment mechanism (CBAM). There proposals are pragmatic and move in the right direction, but do not go far enough. The debate about own resources should focus on whether the EU will be able to build genuine own resources based on common tax policies. The EU suffers from ‘tax leakage’ in which profits are shifted from high-tax to low-tax EU countries, and from there onto no or low-tax non-EU jurisdictions, often without the application of withholding taxes. It may not be too much of a stretch to compare this situation of tax leakage with the situation addressed by CBAM – a quasi-tax at the border. So far, an opportunity for what could be seen as a tax at the border of the internal market, aiming to protect the market from harmful competition, may have been missed. Such a tax could reflect the undertaxed profit rule agreed as part of the international deal on the corporate minimum tax. Focusing on protecting the revenues of EU members by common tax borders could offer scope for new own resources.
Topic:
Budget, European Union, Borders, and Tax Systems
Political Geography:
Europe