D’Errico, Marco; Macchiarelli, Corrado; Serafini, Roberta
This paper discusses how income inequality developed during the current crisis in euro area
countries, as well as the role played by each income source. Based on an extended definition
of income – including additional components which do not appear in the standard Eurostat
definitions – we complement the information provided by the Gini index and quantile ratios
by computing an alternative inequality indicator, developed by Zenga (2007), and its
decomposition by income source. While broadly confirming the distributional effect of the
crisis documented in previous studies, we find that in specific countries the level of inequality
appears higher when alternative measures are taken into account, and...
Cesaroni, Tatiana; De Santis, Roberta
Current account (CA) dispersion within European Union (EU) member states has been
increasing progressively since the 1990s. Interestingly, the persistent deficits in many
peripheral countries have not been accompanied by a significant growth process able to
stimulate a long run rebalancing as neoclassical theory predicts. To shed light on the issue
this paper investigates the determinants of Eurozone CA imbalances, focusing on the role
played by financial integration. The analysis considers two samples of 22 OECD and 15 EU
countries, three time horizons corresponding to various steps in European integration,
different control variables and several panel econometric methods. The results suggest that
within the OECD and EU groups,...
Crescenzi, Riccardo; Pietrobelli, Carlo; Rabellotti, Roberta
This paper contributes to the current debate in both Economic Geography and International Business on the nature and strategies of Multinational Enterprises (MNEs) from emerging countries (EMNEs). The paper fills a relevant gap in the existing literature by shedding new light on the location strategies of EMNEs at the national and regional level, looking at their investment drivers and systematically comparing them with those of multinationals from advanced countries (AMNEs). The empirical analysis looks at the location choices of MNEs in the European Union (EU-25) regions and unveils that EMNEs follow distinctive location strategies. Their attraction into large regional markets...
What are the likely consequences of Brexit for the status and rights of British citizenship? Can
the fact that every British national is an EU citizen mitigate the possible negative
consequences of the UK’s withdrawal from the EU on the plane of rights enjoyed by the
citizens of the UK? These questions are not purely hypothetical, as the referendum on June 23
can potentially mark one of the most radical losses in the value of a particular nationality in
recent history. This paper reviews the possible impact that the law and practice of EU
citizenship can have on the conduct of Brexit negotiations and surveys the...
Bilgel, Fırat; Can Karahasan, Burhan
This study seeks to estimate the economic effects of PKK terrorism in Turkey in a causal
framework. We create a synthetic control group that reproduces the Turkish real per capita
Gross Domestic Product (GDP) before PKK terrorism emerged in the second half of the 1980s.
We compare the GDP of the synthetic Turkey without terrorism to the actual Turkey with
terrorism for the period 1955-2008. Covering the period of 1988-2008, we find that the Turkish
per capita GDP would have been higher by an average of about $1,585 per year had it not
been exposed to PKK terrorism. This translates into an average of 13.8 percent...
Iordanoglou, Chrysafis; Matsaganis, Manos
Grexit was narrowly averted in summer 2015. Nevertheless, the view that Greece might be
better off outside the Euro area has never really gone away. Moreover, although Marine Le
Pen’s bid for the French presidency was frustrated in May 2017, in Italy a disparate coalition,
encompassing Beppe Grillo’s Movimento Cinque Stelle as well as Matteo Salvini’s Lega Nord, has
called for a referendum on exiting the Euro. In this context, our argument that Grexit cannot
save Greece may be of some relevance to national debates elsewhere in Europe. The paper
examines the case for Grexit by offering a detailed account of its likely effects. Its structure...
Concern for economic and social conflicts remains one of the most defining features
of contemporary political and constitutional systems. This is particularly evident in
Western democracies where political alignments are traditionally conceived along
the left-right divide, a conflict line whose current configuration is reminiscent of the
ideological cleavages associated with the 19th and 20th Century class struggles. This
type of conflict (hereafter, first type conflicts), alongside playing a crucial role in the
shaping of national political identities, has prominently featured in constitutional
history as one of the main variables contributing to the rise of constitutional
Europe must wake up to the urgent need to enable pan-European public offerings and to recognise the economic imperative of fostering vibrant capital markets for financing enterprises.
Retail and corporate banks have to cope with legacy issues that impede their efficiency and reactivity. In particular, different norms within groups are still used for accountancy, cost allocation systems and product hierarchies. Also, the share of IT spending used to maintain existing IT systems remains high. Yet, many of the banks’ activities are being rapidly digitalised, especially in consumer finance. The potential of data analytics is being gradually unleashed at different stages of the products. In that context, regulators should favour the digitalisation of banks while alleviating related risks. They should also build on this mutation to raise consumers’...
Tagliapietra, Simone; Zachmann, Georg.
Under the Paris Agreement, the European Union has committed to cut its greenhouse gas emissions to 40 percent below 1990 levels by 2030. Between 1990 and 2015, emissions decreased significantly in all sectors with the exception of transport, which has seen a 20 percent increase. Transport is thus becoming a key obstacle to EU decarbonisation and more aggressive policies are needed to decarbonise this sector. A particular focus should be decarbonisation of road transport because it is responsible for more than 70 percent of overall transport emissions. Decarbonising road transport would also improve air quality i.
During the six months of tedious negotiations to put a German coalition in place, governments across Europe, and France in
particular, have been waiting impatiently for a push for European reform from Berlin. The new coalition agreement between the
Social Democratic Party (SPD), the conservative Christian Democratic Party (CDU) and her Bavarian sister party CSU puts
Europe high on the agenda, at least rhetorically. However, both domestic constraints and unbridgeable differences between
France and Germany could derail the reform agenda. If Chancellor Merkel wants to go beyond a muddling-through approach she
will have to invest a sizeable share of her political capital – domestically and...
Carrera, Sergio; Den, Hertog; Núñez Ferrer, Jorge
This study offers a comparative assessment of the frameworks for governance and oversight of selected EU trust funds (EUTFs) and the Facility for Refugees in Turkey (FRT). It explores how these EUTFs and the FRT add to and ‘mix’ the instruments set up under the EU Multiannual Financial Framework. It addresses the issue of their added value in light of the EU Better Regulation guidelines, their impact on the role of the European Parliament as a budgetary authority and the right to good administration. The study recommends reducing the complexity of the EUTF and FRT governance frameworks, and strengthening their...
Brender, Anton; Pisani, Florence
Each year, 25% of the world’s output is produced by less than 5% of the planet’s population. The juxtaposition of these two figures gives an idea of the power of the American economy. Not only is it the most productive among the major developed economies, but it is also a place where new products, services and production methods are constantly being invented. Even so, for all its efficiency and its capacity for innovation, the United States is progressively manifesting worrying signs of dysfunction. Since the 1970s, the American economy has experienced increasing difficulty in generating social progress. Worse still, over...
Rizos, Vasileios; Behrens, Arno; Drabik, Eleanor; Rinaldi, David; Tuokko, Katja
The circular economy is attracting significant interest worldwide, as evidenced by the numerous government strategies, business commitments and partnerships devoted to its development. At the EU level, the Action Plan for the Circular Economy and several other policy documents have demonstrated a strong commitment to move towards a low-carbon and circular economy. While the calls for a new economic model grow louder, it is clear that the transformation of markets and industries on a large scale will not be an easy achievement. It will require well-designed and ambitious policies to foster the transition as well as new business models.
Carrera, Sergio; Stefan, Marco
Border control, surveillance operations and expulsion of irregular immigrants – particularly through return flights – can pose serious challenges to human rights. Is Europe properly equipped to ensure effective access to remedies for alleged rights violations or possible abuses of force against immigrants and asylum seekers?
This book examines whether adequate complaint mechanisms and bodies are in place and to what extent they succeed in monitoring and redressing human rights violations in the context of border management and joint return flights. It makes three main contributions to the current policy and academic debate.
First, it sheds light on the fragmentation of the...
European banks have been criticized for holding excessive domestic government debt during economic downturns, which has been interpreted as indicative evidence of moral suasion. By using a novel bank-level dataset covering the entire timeline of the eurozone crisis, I first re-confirm that the crisis led to the reallocation of sovereign debt from foreign to domestic banks. This reallocation was only visible for banks as opposed to other domestic private agents and it cannot be explained by the banks’ risk-shifting tendency. In contrast to the recent literature focusing only on sovereign debt, I show that banks’ private sector exposures were (at...
Bank failures have multiple causes though they are typically precipitated by a rapidly unfolding funding crisis. The European Union’s new prudential liquidity requirements offer some safeguards against risky funding models, but will not prevent such scenarios. The speed of events seen in the 2017 resolution of a Spanish bank offers a number of lessons for the further strengthening of the resolution framework within the euro area, in particular in terms of inter-agency coordination, the use of payments moratoria and funding of the resolution process.
Claeys, Grégory; Sapir, André
With the European Globalisation Adjustment Fund (EGF), the EU now has an instrument to help workers negatively affected by trade find new jobs. However, only a small proportion of EU workers affected by globalisation receive EGF financing. How to improve the EGF? Revising the eligibility criteria to qualify for EGF assistance, enlarging the scope of the programme beyond globalisation and collecting more and better data to enable a proper evaluation of the programme.
This paper explores the potential role of industrial policy to stimulate post-crisis recovery in
South East Europe (SEE). Policy reactions in the region have focused on fiscal consolidation
and austerity, while the design of active industrial policies to improve competitiveness has
been less in evidence. The paper reviews the experience of industrial policies in the EU and
shows how these policies have evolved from vertical to horizontal approaches, and how the
latter versions of policy have been transferred to the accession states in SEE. The paper
reviews the evolution of industrial policies in eight countries of the region and the impact of
these policies on industrial production....
The European Commission continues to pursue its goal of building a stronger social Europe with the recent publication of the Social Fairness Package. Released on 13 March, it is a follow-up to the European Pillar of Social Rights (EPSR) adopted in November 2017.