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  • Author: Danièle Hervieu-Léger
  • Publication Date: 01-2021
  • Content Type: Policy Brief
  • Institution: Robert Schuman Foundation (RSF)
  • Abstract: Crises reveal the state of a policy, reveal its ambiguities, strengths and shortcomings, and sometimes force a redefinition or clarification of its guiding principles to ensure its sustainability, if not its survival. Although at the height of the crisis, there is a reflex to completely overhaul what already exists, the constants and structuring considerations quickly tend to dampen the ardour for reform.
  • Topic: Reform, European Union, Trade, COVID-19, Adaptation
  • Political Geography: Europe
  • Author: Sachka Stefanova-Behlert, Martina Menghi
  • Publication Date: 04-2021
  • Content Type: Policy Brief
  • Institution: Robert Schuman Foundation (RSF)
  • Abstract: We live at a time of deep and radical transformations. The pandemic has accelerated many of the changes that were already underway and has brought new challenges to the surface. Among the most affected realms of our societies, we undoubtedly find work and the freedom of movement of people. In Europe, it is precisely at the intersection of these two elements that the posting of workers lays. In this field, we are also at a crucial moment because the pandemic arrived just a few months before the deadline for the implementation of the changes related to the revision of the Posting of Workers Directive. Hence, it has become even more urgent to understand how all these changes have impacted the posting of workers as well as propose solutions to facilitate workers and companies in this adaptation path. That is key if we are to safeguard an important instrument of the European single market. This is exactly the merit of this article and its two co-authors: offering a first and clear account of the characteristics of posting of workers during the pandemic, identifying the main challenges faced by Member States, EU institutions and businesses, while also identifying some potential future developments, despite the climate of great uncertainty surrounding us.
  • Topic: European Union, Crisis Management, Pandemic, COVID-19
  • Political Geography: Europe
  • Author: Alexandre Kateb
  • Publication Date: 02-2021
  • Content Type: Policy Brief
  • Institution: Robert Schuman Foundation (RSF)
  • Abstract: According to official statistics, the African continent has been relatively spared by the Covid-19 pandemic compared to Europe, America and Asia. The factors behind the low incidence of coronavirus in Africa are not fully understood. According to the WHO, the African continent has benefited from certain structural factors such as the limited international connectivity of most African countries, with the exception of some regional "hubs" such as Johannesburg, Casablanca, Addis Ababa and Nairobi. Incidentally, the most 'connected' African countries such as Morocco and South Africa have incurred the highest prevalence rates of Covid-19, which may lend credence to this explanation.
  • Topic: International Relations, European Union, Pandemic, COVID-19
  • Political Geography: Africa, Europe
  • Author: Vedran Džihić, Paul Schmidt
  • Publication Date: 03-2021
  • Content Type: Commentary and Analysis
  • Institution: Istituto Affari Internazionali
  • Abstract: In societies devastated by the pandemic, the EU needs to leave its conventional tool-box behind and urgently speed up the Europeanisation of its neighbours in Southeast Europe. The coronavirus pandemic has deepened the vulnerabilities affecting Western Balkan countries and exposed the weakness of their state institutions, especially in the health sector and social protection. At the same time, related to the limited effectiveness of the EU enlargement process over the past years, the progress of reforms has stagnated and some countries have even experienced concerning regressions in the rule of law. The outbreak of the coronavirus crisis has meanwhile increased the presence of other geopolitical players in the region, mainly in the context of competition over vaccinations, not only of China but also of Russia and the United Arab Emirates. Awareness is growing that the EU and the West is not the only available partner. As other powers not known for their democratic practices use or misuse the Western Balkans to promote their interests, the vision of a free, democratic and truly European Balkans is no longer self-evident.
  • Topic: European Union, Institutions, Pandemic, COVID-19
  • Political Geography: Europe, Eastern Europe, Balkans
  • Author: Nicoletta Pirozzi
  • Publication Date: 03-2021
  • Content Type: Commentary and Analysis
  • Institution: Istituto Affari Internazionali
  • Abstract: The European Union is struggling to recover from the COVID-19 pandemic, which has swept through European societies and economies, causing more than 500,000 deaths (and counting) and a GDP downturn of –6.4 per cent in 2020. This is the third big crisis – and possibly the most dramatic – to impact the EU over the last 12 years, following the economic and financial crisis in 2008– 2010 and the extraordinary influx of migrants arriving on European shores in 2015–2016. All these crises produced asymmetrical consequences on the member countries and citizens. The already marked differences among member states have been exacerbated, making a unified response by EU institutions difficult in the process and suboptimal in the outcome. Indeed, especially during the first wave of the pandemic in Europe, the actions and statements of national leaders revealed a deep rift within the EU and the Eurozone, leading to nationalistic moves in border control and the export of medical supplies. Citizens were therefore exposed to the negative consequences of a Union with limited powers in sectors such as health and crisis management. Meanwhile, important decisions such as the approval of the Next Generation EU package and the new budget for 2021– 2027 risked ending in failure due to the opposition of some member states.
  • Topic: Regional Integration, Crisis Management, COVID-19
  • Political Geography: Europe
  • Author: Nicola Bilotta
  • Publication Date: 12-2021
  • Content Type: Special Report
  • Institution: Istituto Affari Internazionali
  • Abstract: The last decade has witnessed a progressive change in what had long been considered global priorities for achieving growth. The global financial crisis of 2007–2008 and the following European sovereign debt crises of 2011–2012 have brought to light important pitfalls in the functioning of globalized financial markets. Trade and financial liberalization policies have at times caused severe strains in some communities, raising concerns over the effects of rapid increases in international integration. Environmental and social risks have come to the forefront of the policy debate. The COVID-19 pandemic has brought enormous challenges to what was the normal way of living. All these events have had far-reaching consequences on the global economy. Currently, the world is facing at least three major shocks that are affecting health (COVID-19), prosperity (the recession) and the planet (climate change). These have been chosen as the three keywords for Italy’s G20 Presidency. These shocks are different in nature and have very diverse effects across countries, regions and municipalities. This calls for differentiated and targeted responses that take into account the specific needs of individual communities.
  • Topic: Climate Change, Infrastructure, G20, Economic Growth, Investment, Integration, COVID-19
  • Political Geography: Europe, India, Vietnam, Philippines, United States of America, Congo
  • Author: Mehdi Lahlou
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: The coronavirus pandemic has turned into a global economic crisis with severe social effects in the least developed countries, particularly in Africa. Pre-existing challenges related to widespread poverty, demographic growth, food insecurity and governance issues have been exacerbated by the pandemic. While migration remains one of the key elements of the partnership agenda between Africa and the European Union, the aggravating socioeconomic situation in the African continent due to the impact of COVID-19 and its implications for migration dynamics requires going beyond business-as-usual approaches. The renewed scenario calls for a more comprehensive and development-oriented approach to migration, requiring new policy initiatives addressing the wider set of conditions that, beyond constituting developmental challenges in their own right, also drive migration in North Africa as well as in Sub-Saharan African countries.
  • Topic: Economics, Migration, European Union, Mobility, Asylum, COVID-19
  • Political Geography: Africa, Europe, North Africa
  • Author: Pyoung Seob Yang, Cheol-Won Lee, Suyeob Na, Taehyn Oh, Young Sun Kim, Hyung Jun Yoon, Yoo-Duk Ga
  • Publication Date: 04-2021
  • Content Type: Policy Brief
  • Institution: Korea Institute for International Economic Policy (KIEP)
  • Abstract: China’s investment in the European Union (EU) increased significantly during the European financial crisis, but has been on the decline in recent years. The surge of Chinese investment has raised concerns and demands for analysis on the negative effects it could have on the EU companies and industries. In this context, the present study aims to analyze the main characteristics of Chinese investment and M&A in Europe, major policy issues between the two sides, the EU’s policy responses, and prospects of Chinese future investment in Eu-rope, going on to draw important lessons for Korea. To summarize the main characteristics of China's investment in Europe, the study found that the EU's share of China's overseas direct investment has continued to increase until recently. Second, investment in the Central and Eastern European Countries (CEECs) is gradually increasing, although it is still insignificant compared to the top five destinations in the EU: Netherlands, Sweden, Germany, Luxembourg and France. Third, China's investment in the EU is being made in pursuit of innovation in manufacturing and to acquire high-tech technologies. When it comes to China's M&A in Europe, the study found that the proportion of indirect China's M&As (via third countries (e.g. Hong Kong) or Chinese subsidiaries already established in Europe) was relatively higher than direct ones. Empirical factor analysis of investment also shows that China's investment in the EU is strongly motivated by the pursuit of strategic assets. Other factors such as institutional-level and regulatory variables are found to have no significant impact, or have an effect contrary to expectations. This suggests that China's investment in the EU is based on the Chinese government's growth strategy, and accompanies an element of national capitalism Today, It is highly expected that the COVID-19 pandemic will have a reorganizing effect on the global value chain (GVC) and Foreign investment regulation in the high-tech sector motivated by national security is emerging as a global issue as the US and the EU are tightening their control. As Korean companies are not free from the risk of falling under such regulations, a thorough and careful response is required. And for the Korean government, it is necessary to prepare legal and institutional measures regulating foreign investment in reference to the US and the EU.
  • Topic: Foreign Direct Investment, Financial Crisis, European Union, Economy, Economic Growth, Global Value Chains, COVID-19
  • Political Geography: China, Europe, Asia, Korea, United States of America
  • Author: Johan Norberg
  • Publication Date: 03-2021
  • Content Type: Policy Brief
  • Institution: European Centre for International Political Economy (ECIPE)
  • Abstract: During the Covid-19 pandemic, Europe has benefitted strongly from being an open economy that can access goods and services from other parts of the world. Paradoxically, some politicians in Europe think that dependence on foreign supplies reduced the resilience of our economy – and argue that Europe now should wean itself off its dependence on other economies. In this Policy Brief, it is argued that self-sufficiency or less economic openness is a dangerous direction of policy. It would make Europe less resilient and less capable of responding to the next emergency. It is key that people, firms and governments can get supplies from other parts of the world. It is diversification, not concentration of production, that will make Europe more resilient when the next emergency hit. We don’t know where the next crisis will come from. Nature will throw nasty surprises at us, and we will make stupid mistakes, some of which will have devastating consequences. What we do know, though, is that we stand a better chance to fight the next emergency if we get richer and improve our technology. The best policy for resilience is one that encourages specialisation and innovation – and, when the emergency hit, allow for people to improvise in search for solutions. For that to happen, we need openness to goods, services and technology from abroad.
  • Topic: Health, International Political Economy, Innovation, Economic Cooperation, Pandemic, COVID-19
  • Political Geography: Europe, Global Focus
  • Author: Julia Anderson, Francesco Papadia, Nicolas Véron
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: n 2020, European governments mitigated the economic impact of COVID-19 lockdowns and other pandemic-fighting programs through a host of initiatives, including efforts to support credit, such as guarantees for bank loans, particularly to small and medium-sized enterprises. This paper presents detailed information about these national credit support programs in the largest national economies of the European Union (France, Germany, Italy, and Spain) and the United Kingdom. The information was collected through thorough examination of published material and extended exchanges with national authorities and financial sector participants. The analysis focuses on (1) how countries positioned themselves on the many tradeoffs that emerged in designing and implementing the programs; and (2) what explains differences in usage across countries and its leveling off everywhere in the second half of 2020.
  • Topic: Government, European Union, Finance, Fiscal Policy, COVID-19
  • Political Geography: United Kingdom, Europe
  • Author: Gary Clyde Hufbauer
  • Publication Date: 03-2021
  • Content Type: Policy Brief
  • Institution: Peterson Institute for International Economics
  • Abstract: Open Sub-navigation BackOpen Sub-navigation Publications Back Policy Briefs Working Papers Books PIIE Briefings Open Sub-navigation Commentary Back Op-Eds Testimonies Speeches and Papers Topics & Regions PIIE Charts What Is Globalization? Educational Resources Open Sub-navigation Back Senior Research Staff Research Analysts Trade Talks Open Sub-navigation Back RealTime Economic Issues Watch Trade & Investment Policy Watch China Economic Watch North Korea: Witness to Transformation 中文 Open Sub-navigation Back All Events Financial Statements Global Connections Global Economic Prospects Stavros Niarchos Foundation Lectures Trade Winds Open Sub-navigation Back News Releases Multimedia Media Center Open Sub-navigation Back Board of Directors Staff Employment Contact Annual Report Transparency Policy POLICY BRIEF VIEW SHARING OPTIONS Will industrial and agricultural subsidies ever be reformed? Gary Clyde Hufbauer (PIIE) Policy Brief21-5 March 2021 Photo Credit: REUTERS/Denis Balibouse One economic argument for government subsidies is that they are necessary to compensate firms and industries for benefits they provide to society at large but cannot capture in the prices they charge for goods or services. For example, subsidies to renewable energy are defended because renewable energy limits carbon emissions. When a major economy subsidizes extensively, however, its trading partners are drawn into the game, with losses all around. As the prisoner’s dilemma suggests, a better outcome would entail mutual restraint. But the goal of mutual restraint is no less difficult in international trade than it is in international arms control. Both the European Union and the US federal system try, in different ways, to regulate industrial subsidies. Hufbauer examines efforts to contain unjustifiable subsidies and proposes modest improvements, bearing in mind that as countries struggle to overcome the global economic downturn resulting from the COVID-19 pandemic, there is little appetite for restoring a free market economy—one in which firms compete with minimum government assistance or regulation. Selective upgrading of the rulebook may nevertheless be possible.
  • Topic: Agriculture, Government, Reform, European Union, Regulation, Manufacturing, Industry, COVID-19, Subsidies
  • Political Geography: Europe, North America, United States of America
  • Author: Alessia Amighini, Yukon Huang, Tyson Barker, Eduardo Missoni, Giulia Sciorati, Haihong Gao, Elisa Sales, Maximilian Kärnfelt, Paola Magri
  • Publication Date: 06-2021
  • Content Type: Special Report
  • Institution: Italian Institute for International Political Studies (ISPI)
  • Abstract: The coronavirus pandemic that has rocked China since December 2019 has posed a gruelling test for the resilience of the country’s national economy. Now, as China emerges from its Covid-induced "recession", it feels like the worst is behind it. How did China manage to come out almost unscathed from the worst crisis in over a century? This Report examines how China designed and implemented its post-Covid recovery strategy, focussing on both the internal and external challenges the country had to face over the short- and medium-run. The book offers a comprehensive argument suggesting that, despite China having lost economic and political capital during the crisis, Beijing seems to have been strengthened by the “pandemic test”, thus becoming an even more challenging “partner, competitor and rival” for Western countries.
  • Topic: Politics, Science and Technology, Economy, Resilience, COVID-19
  • Political Geography: China, Europe, Asia
  • Author: Monika Grzegorczyk, Mario Mariniello, Laura Nurski, Tom Schraepen
  • Publication Date: 06-2021
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: The pandemic has shown that many workers can efficiently work remotely, with benefits for wellbeing and even productivity. The European Union should develop a framework to facilitate hybrid work.
  • Topic: European Union, Work Culture, Innovation, Strategic Competition, Pandemic, COVID-19
  • Political Geography: Europe, Global Focus
  • Author: Gregory Claeys, Zsolt Darvas, Maria Demertzis, Guntram B. Wolff
  • Publication Date: 05-2021
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: The COVID-19 pandemic has led to the biggest global recession since the Second World War. Forecasts show the European Union underperforming economically relative to the United States and China during 2019-2023. Southern European countries have been particularly strongly affected. While the ICT sector has benefitted from the COVID-19 crisis, tourism, travel and services have suffered. Business insolvencies have, paradoxically, fallen. While total employment has almost recovered, the young and those with low-level qualifications have suffered employment losses. Inequality could rise. The pandemic may lead to medium to long-term changes in the economy, with more teleworking, possibly higher productivity growth and changed consumer behaviour. Policymakers must act to prevent lasting divergence within the EU and to prevent scarring from the fallout from the pandemic. The first priority is tackling the global health emergency. Second, we warn against premature fiscal tightening and recommend instead additional short-term support from national budgets. Over the medium term, fiscal policymakers will need to gradually move away from supporting companies through subsidies, towards tax incentives for corporate investment. A review of the European fiscal framework is needed to achieve the EU’s green goals more rapidly. The quality of public finances, how policymakers spend resources and the associated reforms are of central importance to prevent scarring. Improving the efficiency of insolvency procedures will be crucial for speedy and effective recovery. Targeted labour market policies for the young and less-qualified are needed. As teleworking becomes a more permanent feature of the EU’s labour markets, it will be crucial to adapt social security and taxation systems in the context of the single market for labour. The EU should resist protectionist calls in the wake of the pandemic. Rigorous competition policy enforcement and an integrated EU market have been beneficial for European convergence and growth. Capital markets have an important role to play in a speedy recovery.
  • Topic: Governance, European Union, Inequality, COVID-19
  • Political Geography: Europe
  • Author: Zsolt Darvas
  • Publication Date: 03-2021
  • Content Type: Working Paper
  • Institution: Bruegel
  • Abstract: GDP contractions are typically associated with within-country income inequality increases. While official income inequality data for 2020 will not be available for about two years, the already available employment data for 2020 shows that the difference between highly-educated and low-educated people in terms of job losses is correlated with the economic shock from the COVID-19 pandemic, suggesting that the depth of the economic recession is related to the increase in within-country income inequality in 2020. Scenarios based on historical patterns of recessions and within-country income inequality increases suggest relatively small increases in global income inequality in 2020. Factors mitigating global inequality increases in 2020 include larger GDP per-capita declines in richer advanced countries than in poorer emerging and developing countries, and the positive GDP growth of China, which suggests that within-country inequality in the world’s most populous country might have not changed much in 2020. In contrast, it is quite likely there was a significant increase in European Union income inequality in 2020, partly reversing the decline during the previous decades.
  • Topic: Poverty, European Union, Employment, Inequality, COVID-19
  • Political Geography: Europe
  • Author: Marek Dabrowski, Marta Dominguez-Jimenez
  • Publication Date: 01-2021
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: In the 2010s, the economic situation in the Middle East and North Africa (MENA) deteriorated as a result of lower oil and other commodity prices, a new round of domestic political instability, continuous intra-regional conflicts, stalled economic and governance reforms and, finally, the COVID-19 pandemic. The growth of real GDP, which slowed after the global financial crisis of 2008-2009, further decelerated in the second half of the 2010s and became negative in 2020 as result of the COVID-19 shock. Fiscal balances have deteriorated, even in the oil-exporting countries, and public debt has grown rapidly. MENA countries continue to face numerous long-term socio-economic and institutional challenges including high unemployment (especially youth unemployment), low female labour-market participation rates, the poor quality of education, costly and ineffective public sectors, high military and security spending, high energy subsidies and trade protectionism. Only comprehensive long-term reform programmes can address these challenges. The European Union is MENA’s second largest trading partner after the region itself, and is one of two main sources of foreign direct investment and a major aid donor. However, given the critical importance of the MENA region to its own security and stability, the EU’s engagement in conflict resolution and in supporting economic and political transformation of the region is insufficient and should be intensified. The EU should also update and upgrade its existing association agreements with the countries of the Southern and Eastern Mediterranean, including their free trade provisions.
  • Topic: International Trade and Finance, Governance, European Union, Trade, COVID-19, Economic Crisis
  • Political Geography: Europe, Middle East, North Africa
  • Author: Zsolt Darvas
  • Publication Date: 01-2021
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: The estimation of payments from the European Union’s COVID-19 economic recovery fund, Next Generation EU (NGEU), to each EU country in 2021-2026 involves uncertainties, yet the overall magnitudes can be estimated with a reasonable degree of precision. In contrast, estimating member states’ contributions to the repayment of EU debt (which will be issued to finance NGEU spending) is burdened with enormous difficulties, primarily related to the uncertainty of gross national income projections up to 2058. Some numerical scenarios can be put forward to illustrate the difficulties in estimating the amounts of such future contributions.
  • Topic: Economics, Governance, European Union, Macroeconomics, COVID-19
  • Political Geography: Europe
  • Author: Engjellushe Morina, Florian Bieber, Vuk Viksanovic, Jovana Marovic, Faruk Ajeti, Vedran Dzihic
  • Publication Date: 03-2021
  • Content Type: Video
  • Institution: Austrian Institute for International Affairs (OIIP)
  • Abstract: The global pandemic is changing the world. The Western Balkans were hit severely and are currently struggling with the rapid increase in numbers of Covid-19 infections. The state-of-the-play in the region is shaped by the dynamics of the pandemics but also by underlying structural problems, by the “return of geopolitics’ in the Balkans and question marks put behind the EU-Enlargement and new transatlantic relations. What we see at display right now is a sort of 'vaccine nationalism' threatening to replace the European solidarity. We see China rapidly increasing its influence, EU struggling to find a strong common policy towards the region and new expectations (for some) or even fears (for some others) related to the new Biden Administration. The debate seeks to explore this new game in the (post)covid Balkans. Are non-Western players using the pandemic with their ‘vaccine politics’ to fill Western’s gap or to challenge Western’s influence in the Balkans? What is the role of the EU and what the future prospects for enlargement? Will China’s increased influence in the Western Balkans hinder its transatlantic aspirations? How will the Biden administration meet the new challenges in the region? In cooperation with the Ministry of Defense (bmlv), the Austrian Marshall Plan Foundation, and the European Council on Foreign Relations (ECFR)
  • Topic: Geopolitics, Transatlantic Relations, Vaccine, Pandemic, COVID-19
  • Political Geography: China, Europe, Balkans
  • Author: Mathilde Tomine Eriskdatter Giske
  • Publication Date: 03-2021
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: This research paper examines the concept 'resilience' as a response to the constantly changing environments and turbulence of the world. While resilience is used by several international organisations and nation states, there is still a lack of consensus regarding what the concept really means – it denotes both resisting change and being willing to adapt at the same time. This paper offers some clarity and argues that a temporal dimension is needed when applying the concept of resilience.
  • Topic: Security, NATO, International Organization, European Union, Pandemic, Resilience, COVID-19
  • Political Geography: Europe
  • Author: Shahin Vallée, Jérémie Cohen-Setton, Dominik Buhl
  • Publication Date: 05-2021
  • Content Type: Policy Brief
  • Institution: German Council on Foreign Relations (DGAP)
  • Abstract: Germany’s plan to return to its debt brake creates a serious risk of premature fiscal tightening. Given that the fiscal divide between Europe and the US will widen sharply in 2021, a hasty return to European and German fiscal rules would stifle recovery and undermine efforts to rebuild transatlantic ties in trade and macroeconomic cooperation. This paper proposes several practical options to attenuate the fiscal drag associated with a return to the debt brake and calls for a broad debate on its reform.
  • Topic: Debt, European Union, Finance, Transatlantic Relations, COVID-19
  • Political Geography: Europe, Germany, United States of America