EconPol Opinions

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Challenges of Negotiating a Free Trade Agreement Between the UK and the EU

Clemens Fuest

EconPol Speaker Clemens Fuest has called for the UK Government to abandon its plan to complete the Brexit transition by the end of 2020. Prof Fuest describes the UK’s decision to rule out a customs union and pursue its own trade policy as ‘regrettable’, highlights fears from both the UK and EU over the potential lack of a “level playing field”, calls tax policy “a minefield of disagreement” and says climate policy “poses a further challenge to the free trade agreement.”

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Green Government Debt for the ‘Green Deal’?

Friedrich Heinemann

The ‘Green Deal’ in its objective is highly ambitious and will absorb substantive financial resources, and it is not surprising that the potential role of higher public debt is being discussed. The European Central Bank is increasingly requested to provide green finance through its asset purchase programmes and similar suggestions are being made in national debates. But does an ambitious climate policy really provide compelling arguments for higher public debt? Friedrich Heinemann (EconPol Europe, ZEW Mannheim) argues that fighting climate change is not a convincing justification to open new loopholes in European debt rules and fiscal or monetary institutions.

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Assessing the Cost of Uncertainty Created by Brexit

Fabien Tripier (EconPol Europe, CEPII, Université Paris-Saclay)

The uncertainty surrounding Brexit is costing the UK economy £16 billion per year, according to calculations from EconPol researcher Fabien Tripier (Professor of Economics at the Université Paris-Saclay and scientific advisor at the CEPII). The cost is based on the level of political uncertainty, the effect of that uncertainty on the economy, and the comparative trajectory in the absence of uncertainty.

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In Systemic Competition with China

Achim Wambach

China’s success with state capitalism poses security concerns and huge economic challenges for western market economies. Its economy has boomed over the past 20 years, with private industry contributing much to recent success. And while private industry has helped the rise of China, it’s only one part of the economy. State enterprises and state-controlled firms play a dominant role; the former accounts for 35% of China’s GDP. Amidst uncertainty over how the trade-off between private corporate dynamics and government management of firms will develop, Achim Wambach says Europe needs to work with China to create fair competition and avoid unilateral protectionism.

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The Long-Term Climate Strategy of the European Union – a Reality Check

Karen Pittel

To prevent the average global temperature rising by more than 1.5° celsius, we need to reduce global net greenhouse gas (GHG) emissions to zero by 2050. The EU’s current target is a reduction of emissions by 80-95% by 2050. However, the EU itself estimates that it will only achieve about 60% with a continuation of current policies. In 2017, GHG emissions rose after falling by almost 23% between 1990 and 2016. Prof. Dr. Karen Pittel examines the evidence and suggests a framework for action.

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