News Archive

Out of the more than 40 countries that have expressed interest in joining the BRICS bloc, the leaders of the five founding members announced in August 2023 that Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates would join the BRICS in January 2024. The BRICS+ countries now represent around 45 percent of the world’s population and around a third of global GDP. Originally the BRICS were founded as an economic alternative to the Western bloc led by the USA and the EU.

Russia’s attack on Ukraine has revealed the need to reassess Europe’s security. Currently, the European Union is a politically fragmented and divided union of member states, economically underperforming, with a defense capability that is insufficient without the support of the USA. This article of EconPol Forum argues that the European Union should develop towards a stronger decentralized federation, but by restoring the principle of subsidiarity.

Despite EU restrictions, only around one-third of pre-war exports to Russia are fully sanctioned; most trade remains unaffected or subject to numerous exemptions. While exports have decreased by 32%, imports have increased by 17% due to innovative ways to bypass trade sanctions. China is Russia’s most important alternative country of origin for products under sanction: 61 percent of all products subject to sanctions come from China. The Russian economy shows signs of recovery, driven by robust domestic demand from wartime fiscal stimulus, contributing about 10% to GDP in 2022-23.

To improve defence capabilities, Europe has to increase defence spending immediately and also to create fiscal space for a permanent rise in defence spending. Many European countries have collected a considerable peace dividend since the end of the Cold War. In the same period, welfare states have expanded to a degree not backed by the general economic development. This Policy Report shows that if European NATO countries shifted around one percent of non-defence expenditure towards defence, this would be sufficient to meet the NATO 2%-target.

The last EconPol Newsletter of 2023 has just been published. This issue features a special Policy Report on Geoeconomics analyzing different scenarios for the EU's future trade policy, a review of our 2023 EconPol Annual Conference in Brussels, as well as the latest EconPol Forum on how to make the green transition finally happen.