Overview publications

This report highlights the effects of international sanctions on Russia's economic performance up to mid-2024. Despite monetary tightening, Russia's early 2024 economic growth remained strong due to a tight labor market and continued credit expansion. The fiscal outlook has improved with more positive short- and medium-term projections despite increased military and social spending. The trade surplus remained almost unchanged, masking declines in both exports and imports. 

Rising protectionism and geoeconomic tensions pose a major challenge, especially for the EU. In many cases, however, the key to strengthening economic security lies in deepening international trade relations, not in protecting domestic production. This policy brief presents four propositions on the future direction of the EU’s foreign economic policy.

Well-intentioned measures such as polling place reassignments can have unintend-ed consequences, such as a shift from in-person to postal voting and a temporary decline in overall voter turnout. The drop in turnout is due to inattentive voters missing the deadline to apply for an absentee ballot.

Companies in the EU spend much less on R&D than their competitors in the US and focus their innovation activities on mid-tech rather than high-tech sectors (IT hard-ware, software, biotechnology, pharmaceuticals). Reforms of EU innovation policy are necessary to avoid the “mid-tech trap,” i.e., the traditional dominance of the same companies, especially from the automotive sector.

Both Germany and the US are among the most innovative and entrepreneurially ac-tive countries in the world. Nevertheless, they face different challenges: the strengthening of incremental innovative entrepreneurship in Germany versus the continuous promotion of radical and disruptive entrepreneurship in the US.

Russia’s invasion of Ukraine has raised the question of whether the issue of external border security and defense needs to be more closely integrated within the European Union. Many proposals are under discussion aimed at assigning the EU with tasks that are currently performed at national level. Most EU members have increased their defense spending in the past year or plan to do so soon. However, whether an EU defense union is politically achievable remains controversial. It entails additional costs and ‒ even more importantly ‒ the member states would have to give up some of their sovereignty. The project is linked to the plan to build a robust and efficient defense industry. This is because European arms production has so far suffered from national fragmentation and chronic underfunding.

In the new legislative period, the EU Commission will need a well-thought-out economic policy agenda to respond to the changed geopolitical challenges and to strengthen its competitiveness. This policy brief analyzes the main economic challenges ahead.

Climate change has an effect on all areas of development in poor countries due to its impact on the agricultural sector. The EU development policy should support innovative financial mechanisms for family farms and work towards the opening of product markets and the free movement of people.

By international comparison as well as compared to other EU policies, the EU’s Cohesion Policy evaluation system is far developed and institutionalized. This report analyses the remaining gaps and shortcomings in the Cohesion Policy evaluation system against principles established by the OECD and others and provides recommendations on how to further improve it.

Over the past decade, crises have shaped public perceptions of the EU. Despite the rise of EU-critical parties, the EU and its institutions still enjoy higher levels of trust than national governments.