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Explained: the Insurance Properties of Common Debt Issuance in the European Union

Daniel Gros

The Covid-19 crisis has led to a common European fiscal response in the form of the €750 billion Next Generation EU (NGEU) package agreed by EU leaders in July 2020. One important novelty of this package is that it will involve, for the first time, the issuance of substantial common European debt - Daniel Gros explains what this means for the EU and its Member States.

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How Financial Regulation Can Help Save the Planet

Antonio Cabrales

Global authorities have longstanding worries about the impact of financial contagion on the economy: the domino effect of a failing bank can have severe repercussions, as the 2008 financial crash illustrated. To deal with these potential shocks, regulators and financial institutions have implemented risk management systems and processes designed to minimize the likelihood that such an event will be able to destroy the economy again. However, while these new frameworks and increased capital reserves go a long way to protecting financial institutions, according to economist Antonio Cabrales there is one area that is being overlooked: the link between financial systems and climate change.

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Online Public Procurement System Reduces Collusion in Ukraine

Vitezslav Titl

An  e-procurement system launched by the central government in Ukraine in 2016 reduces collusion and leads to better market outcomes, according to research carried out by Bruno Baranek, Leon Musolff and Vitezslav Titl. The system allows members of the public to leave reviews on public procurement processes – and there’s little evidence of it being used to sabotage rival businesses. This research exploits a unique setting in Ukraine and illustrates that online public monitoring of procurement markets can eliminate collusion and improve market outcomes. The 2016 reform allows citizens to observe complete information about procurement contracts and comment, review, monitor, and submit abuse reports.

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Auctioning Renewable Energy: How to Put a Price On It?

Natalia Fabra

The European Commission has set one of its key climate and energy targets as achieving a share of at least 32% for renewable energy over total energy consumed by 2030. But despite such a large share up for grabs, the methods by which renewable energy is bought and sold are far from clear. Renewable energy auctions have been implemented globally; they’re currently taking place in most countries in Europe and beyond 100 countries around the world. But, says Natalia Fabra of EconPol Europe and Universidad Carlos III de Madrid, there’s no uniformity about the way the auctions are being run, with each country using their own system.

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No-Deal Brexit has Drastic Implications for UK Firms Reliant on EU27 Supply Chains

Lisandra Flach (EconPol Europe, LMU Munich and ifo Institute), Feodora Teti (EconPol Europe, LMU Munich and ifo Institute)

The decision of the UK to leave the EU imposes a key challenge for trade relations; regardless of the outcome of trade talks, trade costs are set to increase with the resulting shocks more severe for goods that are highly dependent on few suppliers. In the worst case scenario, say Lisandra Flach (EconPol Europe, LMU Munich and ifo Institute) and Feodora Teti (EconPol Europe, LMU Munich and ifo Institute), these shocks will cause significant supply chain disruptions that will have a much harsher impact on the UK than any EU member state.These product dependencies, they say, emphasize the need for a trade agreement that minimizes the costs of Brexit for both sides and reduces the uncertainty in international relations.

 

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