News Archive

The European Commission’s proposals for the post-2020 Common Agricultural Policy (CAP) are under discussion, and these cautious reform ideas have set the parameters for upcoming negotiations. CAP will continue to have a two-pillar structure of direct payments and rural development, with a seven-year budget of €365 billion. As before, almost three-quarters of the budget - €265 billion - is reserved for direct payments to farmers. However, ‘European added value’ must be urgently applied to CAP, say Friedrich Heinemann and Stefani Weiss, who summarise their recommendations to justify direct payments in their latest opinion piece for EconPol.

China’s economy continues to grow apace, creating a worrying new form of economic and political competition for Europe and the US. While private entrepreneurship and free pricing play a growing role in China, the state continues to control economic developments in many sectors and owns almost all of the banking system. Is Chinese state capitalism about to outperform market economies in science and technology? Will its role in developing and emerging economies reduce the influence of the West? Clemens Fuest, president of the ifo Institute and director of the Center for Economic Studies at the University of Munich, examines Europe’s ability to compete with this third type of inter-system competition.

The impact of international trade and protectionism on the European economy will be examined at EconPol Europe’s annual conference on the 19 and 20 November, with a keynote speech by Jean-Luc Demarty, Director General for Trade at the European Commission. The challenges of EU trade policy making will be the focus of day one of the conference, discussed by a policy panel including Maria Åsenius (Head of Cabinet to Commissioner Malmström), Sébastien Jean (Director of CEPII), Bernd Lange (Chair of European Parliament’s Committee on International Trade), Andrea Montanino (Chief Economist, Confindustria) and Eckart von Unger (Senior Manager, BDI).

Authors of a new study conducted jointly by the Centre for European Economic Research (ZEW), Mannheim, and the ifo Institute for the EconPol Europe research network recommend that policymakers should do more to encourage citizens to identify with Europe. The authors suggest that Pan-European political consciousness could be encouraged by having citizens vote for European party lists, rather than national party lists in the European elections. An EU Citizens’ Assembly, say the report’s authors, should serve as a platform to discuss specific political issues and propose potential solutions. Europe could also raise its profile overseas through shared EU embassies and consulates.

The third bail-out programme for Greece ended in August, but the crisis isn’t over. Nine years after the crisis broke, public debt still amounts to 180 percent of gross domestic product, a level incompatible with stable economic development. There have been improvements: the increase in public debt has been brought to a halt, exports of goods and services almost match the level of imports, and unemployment fell below 20 percent in June 2018, the lowest rate since September 2011. But the country can only recover if it implements further reforms, and it must do so independently of further bail-outs. And, if we are to avoid a similar tragedy in Greece or elsewhere, the Eurozone must change too.