| Opinion
| Working Paper
The agenda to fix the euro is hampered by conflicting national interests. Creditor countries demand fiscal house cleaning and debtor countries ask for risk sharing. There is currently a political deadlock about how the adjustment burden should be distributed, perpetuating a state of vulnerability that is not in the collective interest of euro area members. This column, part of the Vox debate on euro area reform, argues that overcoming this coordination failure requires reforming the political governance of the EU, rather than just its economic governance. ...Details
The European Commission’s Allowance for Growth and Investment (AGI) has proposed investment incentives in its two-step approach towards the Common Consolidated Corporate Tax Base (CCCTB). In this latest EconPol working paper, the authors demonstrate that the AGI strengthens investment incentives in high-tax countries and decreases the CCCTB-induced investment push towards low-tax countries. They also demonstrate that the AGI decreases tax competition and that a sufficiently generous AGI reduces tax competition between countries when introduced with the CCCTB. ...Details
With Trump’s trade policies becoming apparent, China has emerged as enemy number one. Meanwhile, other trading partners – particularly smaller ones - are being pressured to introduce concessions with advantages for the US. A key question for the rest of the world is what economic fallout to expect from this trade war. EconPol researcher Daniel Gros suggests that the US will attempt to put similar pressure on the EU, but it is unlikely that this pressure will succeed. But with the US expected to pursue its policy of trying to isolate China with other smaller trading partners, the political and systemic costs of the Sino-US trade war could be considerable in the long run. ...Details
