|
on European Economics |
|
Issue of 2026–08–17
twenty-two papers chosen by Simon Sosvilla-Rivero, Instituto Complutense de Análisis Económico |
| By: | Juan Mejino-Lopez (Peterson Institute for International Economics); Nicolas Veron (Peterson Institute for International Economics) |
| Abstract: | This Policy Brief focuses on capital requirements on the very largest banks, or megabanks, in the context of the broader current EU policy agenda of banking reform. The authors find that, at end-2024, requirements on US megabanks were generally stricter than requirements on EU megabanks, in line with longstanding US practice. A year later under the second Trump administration, US requirements on megabanks were no longer obviously tougher than those in the European Union, but they were not actually undercutting them either. There is thus no reasonable case for the European Union to ease requirements on its own megabanks in response to the current deregulatory drive in the United States. Instead, EU policymakers should prioritize actions to address the current banking policy fragmentation along national lines, even within the euro area. That means completing the unfinished banking union and integrating decision making on macroprudential buffers at the European Central Bank, which will make the banking policy framework significantly simpler and more predictable. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:iie:pbrief:pb26-13 |
| By: | Dräger, Lena; Marenčák, Michal; Nghiem, Giang; Paloviita, Maritta |
| Abstract: | This paper examines cross-country differences in consumer expectations about macroeconomic outcomes and mortgage borrowing conditions within a monetary union. Using harmonized microdata from the ECB Consumer Expectations Survey for eleven euro area countries, we document significant national disparities. By sequentially adding a rich set of consumer- and country-specific macro controls to pooled regressions with country fixed effects, we find that these factors account for much, but not all, of the cross-country heterogeneity in expectations. These remaining differences likely reflect unobserved countryspecific factors, highlighting the need for country-tailored monetary policy communication to effectively stabilize consumer expectations. |
| Keywords: | Country heterogeneity, Expectations, Consumer Expectations Survey |
| JEL: | E31 E52 D30 D84 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofrdp:342404 |
| By: | Ricco, Giovanni; Savini, Emanuele; Tuteja, Anshumaan |
| Abstract: | This study examines high-frequency market responses to ECB policy announcements, providing instrumental variables to identify four types of monetary policy shocks -- conventional policy, forward guidance, quantitative easing/tightening, and asymmetric country risk -- along with information shocks. Our findings show that non-linear information effects, especially prominent during episodes of acute market stress in euro area crises, are key to resolving puzzles in macroeconomic and financial variable responses reported in studies using high-frequency European data. The IVs obtained by controlling for these effects yield, in a VAR model, dynamic responses to monetary tightenings with contractionary impacts on output and prices. |
| Keywords: | Monetary policy |
| JEL: | E32 E52 E58 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19679 |
| By: | Consolo, Agostino; Foroni, Claudia; Lissona, Claudio; Schroeder, Christofer |
| Abstract: | We analyse whether textual information extracted from firms’ earnings calls can improve forecasts of the euro area job vacancy rate. Using transcripts from euro area headquartered firms, we construct a monthly indicator of labour demand based on keywords related to labour market pressures and include it into a mixed frequency Bayesian VAR alongside standard hard and soft indicators. A pseudo–real-time evaluation shows that earnings calls provide timely and valuable signals for tracking vacancy dynamics. Among soft indicators, factors limiting production deliver the largest forecasting gains, while real labour-market indicators such as unemployment add little once qualitative signals are included. Forecast improvements are largely driven by information from the manufacturing sector, whose signals prove substantially more informative than those from services, especially when paired with earnings calls. Taken together, our results highlight the usefulness of high-frequency text-based information for improving short-term labour-demand forecasts in the euro area. JEL Classification: C53, E24, E27 |
| Keywords: | earnings calls, job vacancy rate, mixed-frequency, nowcasting, sectoral heterogeneity |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263269 |
| By: | Bräutigam, Marcel; Figueres, Juan Manuel; Giglio, Carla; Grassi, Alberto; Prieto, Barbara Montero; Rodriguez d’Acri, Costanza; Salleo, Carmelo |
| Abstract: | We design an econometric framework to simulate multiple adverse macro-financial scenarios that can be used in top-down stress tests. First, we create a financial stress index informed by shocks generated via a non-parametric copula estimated on a large dataset of daily financial indicators. Second, we simulate the joint dynamics of macroeconomic indicators conditional on the copula-based financial shocks in a large multi-country Bayesian VAR model. This framework, which we refer to as the Multiple macro-financial stress scenario Simulation Engine, MuSE, allows us to replicate thousands of macro-financial stress scenarios where adverse shocks generated in the financial sector propagate into the overall economy, triggering significant macroeconomic fluctuations. We demonstrate its functionality by generating a large number of scenarios inspired from past crises capturing stress stemming from financial markets, sovereign debt, and geopolitical tensions. Using a top-down solvency stress test model, based on recent EU-wide stress tests, we project the capital depletion for euro area banks and find that adverse scenarios triggered by stock market and sovereign shocks appear to threaten the resilience of the euro area banking sector the most at this juncture. JEL Classification: C15, G01, G17, G21 |
| Keywords: | Bayesian techniques, financial copulas, financial institutions, macrofinancial scenario calibration, stress testing |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263270 |
| By: | Wolswijk, Guido |
| Abstract: | This paper analyses the European prohibition of monetary financing from an economic perspective. The prohibition seeks to safeguard central bank independence in setting monetary policy to maintain price stability, and to preserve fiscal discipline, thereby preventing monetary policy from becoming constrained or hindered by fiscal policies. Imposing a prohibition on financing public deficits helps to ensure a clear separation of responsibilities between monetary policy and fiscal policy and is consistent with a range of macroeconomic theories, including monetarism and the fiscal theory of the price level. The current EU-wide ban is more stringent than those in place in Europe before the start of Economic and Monetary Union and also than those prevailing in other major currency areas of the world. Tasked with monitoring compliance with the prohibition among European national central banks, the European Central Bank (ECB) has developed certain standards over time, informed by definitions contained in EU regulations and by cases that have arisen over the years. Over the three decades since its introduction, the prohibition in general has been well respected, although a few actual or potential conflicts with the prohibition have required national central banks to take corrective action. Recent economic crises in Europe have given rise to academic proposals to reinterpret or circumvent the ban, notably during the COVID-19 pandemic. These suggestions have included central banks handing out “helicopter money” to the public and cancelling part of the government debt held by European central banks. In general, these proposals would seem to jeopardise the prohibition of monetary financing and ultimately weaken price stability and sound public finances. JEL Classification: E58, E61, E62, F45, K33 |
| Keywords: | debt monetisation, fiscal policy, monetary financing, monetary policy |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2026397 |
| By: | Freeman, Rebecca; Garofalo, Marco; Longoni, Enrico; Manova, Kalina; Mari, Rebecca; Prayer, Thomas; Sampson, Thomas |
| Abstract: | How does dismantling deep integration affect international trade? This paper studies the consequences of economic disintegration by estimating the impact of Brexit on goods trade by UK firms. The UK’s exit from the EU’s single market and customs union in January 2021 led to an immediate, sharp drop in both exports and imports with the EU for the average UK firm, and caused many firms to stop trading with the EU altogether. But Brexit’s impact on aggregate trade was mitigated by three forces: larger firms were less hard hit; exports to non-EU countries were unaffected; and importers partially compensated for reduced EU imports by sourcing more from outside the EU. Our estimates imply that leaving the EU reduced worldwide UK exports by 6:4% and worldwide UK imports by 4:4% within the first two years. Adjustment patterns indicate that these effects were driven by higher variable and fixed UK-EU trade costs and imperfect input substitutability across origins, with little role for scale effects, capacity constraints, input cost shocks, or sourcing complementarities. |
| Keywords: | Trade policy; Brexit; Disintegration; Deep integration |
| JEL: | F13 F14 F15 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19869 |
| By: | Eickmeier, Sandra; Petersen, Luba |
| Abstract: | Central banks, including the European Central Bank (ECB), are increasingly involved in climate-related initiatives. This study uses a June 2023 survey of German households to gauge public support for the ECB’s climate engagement. Our findings reveal that 69% of households report increased trust in the ECB due to its climate actions, with most noting a mild boost in trust. These households primarily value the ECB’s broader scope and concern. A minority, comprising 17% and 20% respectively of all households, express concerns about potential compromises to price stability or independence. In contrast, a larger group (23% of all households) believes that the ECB’s climate efforts help the institution better achieve its core objectives. Additionally, our analysis of an information intervention reveals that the ECB’s climate actions have minimal effect on overall household inflation expectations. Finally, an internal survey of central bankers reveals that while they accurately gauge the ECB’s climate activities’ effect on households’ trust, they tend to overestimate their impact on inflation expectations. In sum, our results indicate public endorsement of the ECB’s climate-related endeavors. |
| JEL: | E7 E59 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19549 |
| By: | Matthes, Jürgen; Kunath, Gero; Sultan, Samina |
| Abstract: | Die globalen Ungleichgewichte haben in den letzten Jahren zugenommen. Das gilt vor allem für den zuletzt deutlich gestiegenen Leistungsüberschuss Chinas und das höhere Leistungsbilanzdefizit der USA. In der EU und im Euroraum ist eher eine Seitwärtsbewegung auf moderat hohem Niveau festzustellen, zuletzt mit sinkender Tendenz. Der lange hohe Leistungsüberschuss Deutschlands hat seit 2020 und am aktuellen Rand auch deutlich abgenommen. Auch bei der Beurteilung der strukturellen und wirtschaftspolitischen Ursachen zeigen sich ähnliche Unterschiede zwischen den betrachteten Ländern, an denen alle jeweiligen Regierungen gemeinsam ansetzen müssen, um die gestiegenen globalen Ungleichgewichte zu mindern: EU und Euroraum bewegen sich in den letzten Jahren in die richtige Richtung mit Blick auf die Hauptursache des Leistungsbilanzüberschusses, die in einer zuvor mangelnden Investitionstätigkeit liegt. Das gilt etwa für den Corona-Aufbaufonds, der vor allem gemeinschaftlich finanzierte Investitionen in die digitale und grüne Transformation fördert. Private Investitionen werden stärker angereizt durch aktuell laufende Bürokratiereformen der EU sowie eine ernsthafte Initiative wichtiger Mitgliedstaaten für eine Spar- und Investitionsunion. Hier kommt es auf eine konsequente Umsetzung dieser Vorhaben an. Auch der DraghiBericht zeigt vielfältige Wege zur Steigerung von privaten und öffentlichen Investitionen vor, denen EU und Mitgliedstaaten freilich noch stärker folgen sollten. Deutschland hat zwar weiterhin einen relativ hohen Leistungsbilanzüberschuss. Doch sowohl dessen merklich sinkende Tendenz als auch die deutliche Steigerung der staatlichen Investitionen weisen klar in die richtige Richtung, wobei auf eine effektive Umsetzung zu achten ist. Zudem sollte die Bundesregierung die begonnenen Reformen für eine Verbesserung der Wettbewerbsfähigkeit und für mehr private Investitionsanreize noch verstärken. In den USA ist der Handlungsbedarf dagegen anhaltend hoch. Es geht vor allem um die Reduzierung des Staatsdefizits, etwa durch eine Stärkung der Staatseinnahmen, da hier die wesentliche Ursache des hohen Leistungsbilanzdefizits liegt. Importzölle sind dagegen keine geeignete Maßnahme zur nachhaltigen Minderung des Leistungsbilanzdefizits. Aufgrund der deutlich höheren Nettoauslandsverschuldung kommen sogar erste Sorgen vor einer potenziellen Finanzkrise auf, da die Finanzierungsstruktur der Auslandsschuld fragiler geworden ist und die erratische Politik der US-Administration für Verunsicherung sorgt. In China ist der Handlungsbedarf am größten, vor allem weil der Leistungsbilanzüberschuss zuletzt deutlich gestiegen ist und weil die Politik den weiter gestiegenen großen Reformanforderungen bislang, wenn überhaupt, nur in zaghaften Ansätzen nachkommt. Zudem ist das Ausmaß des nötigen Rebalancing in China immens, vielfältig und systemisch. [...] |
| Abstract: | Global imbalances have increased over the past few years. This applies in particular to the latest increase in China's current account surplus, and to the higher current account deficit of the United States. In contrast, current accounts in the EU and the euro area have largely moved sideways with a recent downward tendency. The respective governments must address the structural economic causes jointly in order to reduce global imbalances: EU and euro area: The EU and the euro area have been moving in the right direction in recent years and the current account surplus is on a downward trend. They have stepped up their previously insufficient investment activity, for example, with the Recovery and Resilience Facility, which promotes jointly financed investments in digital and green transformation projects. Private investment is being incentivized through the EU's ongoing bureaucracy reforms and a more serious initiative by key member states for a Savings and Investment Union. The Draghi report also identifies a wide range of measures to increase private and public investment, which the EU and its member states should implement more consistently. The key is the consistent implementation of these plans. Germany: Germany still has a relatively high current account surplus. However, its marked decline since 2020 and the significant increase in public investment point clearly in the right direction. Nonetheless, attention must be paid to effective implementation. In addition, the federal government should further strengthen the reforms already initiated to improve competitiveness and create more incentives for private investment. United States: In the United States, the need for action remains persistently high. In particular, the fiscal deficit, which is at the root of the high current account deficit, must be reduced. This should be done by strengthening government revenues instead of using import tariffs. Owing to the much higher net external debt, initial concerns are emerging about a potential financial crisis, as the financing structure of US foreign debt has become more fragile and the erratic policy of the US administration is creating uncertainty. China: In China, the need for action is greatest and has become even more pressing. The current account surplus has recently risen significantly. The Chinese leadership has so far addressed the need for substantial reforms only tentatively. The scale of the necessary rebalancing in China is immense, multifaceted and systemic. [...] |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwkrep:342424 |
| By: | Gürkaynak, Refet |
| Abstract: | With the notable exception of Turkey, the post-Covid inflationary episode in Emerging Europe followed the same contours as in advanced economies and was primarily due to external shocks, especially in energy prices. The Turkish case was due to misguided monetary policy that led to inflation that is an order of magnitude higher and more persistent. Emerging European countries’ post-Covid inflation surges depended on their exposure to energy prices based on the weight of energy in the consumption basket and the energy intensity of production, as well as the share of imported energy used in the country. In these regards, Emerging European countries were no different from euro area countries. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19822 |
| By: | Araujo, Douglas; Bokan, Nikola; Comazzi, Fabio; Lenza, Michele |
| Abstract: | Word embeddings are vectors of real numbers associated with words, designed to capture semantic and syntactic similarity between the words in a corpus of text. We estimate the word embeddings of the European Central Bank's introductory statements at monetary policy press conferences by using a simple natural language processing model (Word2Vec), only based on the information and model parameters available as of each press conference. We show that a measure based on such embeddings contributes to improve core inflation forecasts multiple quarters ahead. Other common textual analysis techniques, such as dictionary-based metrics or sentiment metrics do not obtain the same results. The information contained in the embeddings remains valuable for out-of-sample forecasting even after controlling for the central bank inflation forecasts, which are an important input for the introductory statements. |
| Keywords: | Inflation |
| JEL: | E31 E37 E58 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19784 |
| By: | Chahad, Mohammed; Mogliani, Matteo; Bańbura, Marta; Kulikov, Dmitry; Montes-Galdón, Carlos; Landau, Bettina; Meunier, Baptiste; Odendahl, Florens; Paredes, Joan; Sigwalt, Antoine; Theofilakou, Anastasia; Aristidou, Chryso; Pacella, Claudia; Rodrigues, Paulo; Roth, Markus |
| Abstract: | This paper introduces reduced-form macroeconometric tools, emphasising quantile regression models, to identify key risk drivers for the euro area economy and assess risks around the baseline ECB/Eurosystem staff macroeconomic projections for the euro area inflation and growth. The analysis uses a large number of risk factors, going beyond the usual financial factors, employing a sequential selection approach with robustness checks. To support the analysis a MATLAB toolbox (M@RX) was developed, incorporating several quantile regression-based model classes with a novel parametric tilting methodology and a copula approach for transforming predictive densities across frequencies. This paper contributes to the literature on the treatment of the COVID-era data in quantile regression models. Results indicate that the predictive content of risk factors is horizon, time and objective-dependent. For example, labour market indicators are particularly relevant for assessing upside inflation risks, but to a time-varying extent and with limited predictive power for downside risks. Conversely, uncertainty, money and credit indicators perform better for downside inflation risks. As regards risks to growth, the results confirm the established role of financial conditions, while also highlighting the relevance of monetary indicators, particularly for downside risks. Combined risk factor frameworks – with several different risk indicators – tend to systematically outperform single-factor specifications for density forecasting, due to complementarities across risk indicator groups. An empirical application highlights the policy relevance of these tools, as they provide timely signals and accurately track the direction of realised outcomes. Given the time-varying and state-dependent nature of their predictive performance, a regular performance assessment of the specifications is recommended to maintain reliability. JEL Classification: C22, C53, E27, E37 |
| Keywords: | density forecasts, forecasting, Macro-at-Risk, quantile regression, tail risks |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2026396 |
| By: | Muringani, Jonathan; Fitjar, Rune; Rodríguez-Pose, Andrés |
| Abstract: | This paper examines the complex relationship between political and social trust, government quality, and economic development across 208 regions in the European Union (EU). We use a pooled data generalized structural equation model (GSEM) to show that political trust serves as a fundamental driver of regional economic development in the EU. Political trust is, in turn, influenced by both social trust and government quality. Social trust and government quality have quadratic effects on political trust, showing diminishing returns, while the effect of political trust on economic development is linear. Political trust mediates the relationship between social trust and economic development entirely, while government quality retains a direct relationship with economic development. These findings underscore the fundamental role that political trust plays as a mechanism through which both formal and informal institutions shape regional development. |
| JEL: | O43 R11 H11 D73 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19622 |
| By: | Papatheophilou, Simela; Tröster, Bernhard; Blöschl, Robert; Weber, Christina; Schafhausen, Carola; Herzig, Christian |
| Abstract: | Power imbalances in EU agri-food value chains have prompted legislators to prohibit 'Unfair Trading Practices' (UTPs). The European UTP framework extends to global value chains (GVCs) such as cocoa and banana chains, where the EU is a major consumer and which are known for the application of UTPs. However, European UTP legislations have proven ineffective in addressing UTPs globally. Through comparative legal analysis, review of academic literature and Member States' UTP reports, and semi-structured interviews, we investigate factors contributing to the minimal uptake of UTP regulations in GVCs. Our findings identify key barriers: diverging regulatory and enforcement approaches across EU Member States, limited awareness and the fear factor among GVC actors, and the absence of pricerelated provisions. Targeted reforms to harmonize selected provisions and enforcement approaches provide options to strengthen the regulatory framework's capacity to mitigate power imbalances in agri-food GVCs. |
| Keywords: | Unfair Trading Practices, global value chains, cocoa, bananas, enforcement mechanisms |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:oefser:342442 |
| By: | Abeeb Olaniran (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Talita Greyling (Centre for Well-being, Artificial Intelligence and Social Impact (C.WAIS) and School of Economics, University of Johannesburg, Johannesburg, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Christian Pierdzioch (Department of Economics, Helmut Schmidt University, Hamburg, Germany) |
| Abstract: | The European Union (EU) is one of the largest contributors to global greenhouse gas (GHG) emissions and is committed to being the first economic bloc to achieve a net-zero emissions balance. We examine the attendant implications of the shortfall of these emissions through climate-related risks on national well-being and happiness of selected countries that contribute the largest of the EU GHG emissions. We find strong evidence of a persistent diminishing effect of climate shocks on happiness, with physical-related shocks causing more havoc than transition-related shocks. Exploring the non-linear dynamics of these relationships, we find asymmetric effects of positive versus negative climate-related shocks, with positive shocks worse than negative in some countries, but inverted in others across both risk measures. Our findings offer valuable insights for governments and policymakers seeking to promote a socially just transition to a sustainable economy by highlighting the role of climate-related insurance as a key component of climate mitigation and adaptation strategies. |
| Keywords: | Climate risks, National well-being, National happiness, European Union |
| JEL: | I31 O52 Q54 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:pre:wpaper:202621 |
| By: | Sultan, Samina; Gros, Daniel; Rotondi, Niccolò |
| Abstract: | This Report gives an overview of the effective import tariff rates of the US on its most important trade partners in 2025 and the first months of 2026. Our analysis shows that the average effective bilateral US tariff rate on imports from the European Union (EU) was only 7.8 per cent from Liberation Day in April 2025 to February 2026. This is significantly lower than the announced tariff rates at the time. The effective tariff rates were somewhat higher for some EU Member States, where the manufacturing sector accounts for a larger share of the economy, such as Germany (10.6 per cent) or Italy (9.6 per cent). However, during the same time China faced a much higher effective US tariff rate of almost 37 per cent, while for Japan it was 14 per cent and for the UK 6.3 per cent. Imports from Canada and Mexico, in contrast, were effectively only tariffed at 3.8 per cent. At first sight the differences in average effective tariff rates seem to have had limited impact on trade flows so far as the share of US imports coming from the EU and other industrialized countries have changed only modestly. In contrast, China's share in US imports fell by almost one half between 2024 and 2026, indicating significant trade diversion to the detriment of China. The Report's focus is a deeper analysis of the effects of the US-EU deal, the so-called Turnberry Deal, effective from September 2025 to February 2026. |
| Abstract: | Dieser Report gibt einen Überblick über die effektiven US-Importzollsätze gegenüber ihren wichtigsten Handelspartnern im Jahr 2025 und in den ersten Monaten des Jahres 2026. Unsere Analyse zeigt, dass der durchschnittliche effektive bilaterale US-Zollsatz auf Importe aus der Europäischen Union (EU) vom sogenannten "Liberation Day" im April 2025 bis Februar 2026 lediglich bei 7, 8Prozent lag. Dies ist deutlich niedriger als die damals angekündigten Zollsätze. Für einige EU-Mitgliedstaaten lagen die effektiven Zollsätze etwas höher, insbesondere dort, wo das verarbeitende Gewerbe einen größeren Anteil an der Wirtschaft ausmacht, wie etwa in Deutschland (10, 6Prozent) oder Italien (9, 6Prozent). Im selben Zeitraum war China hingegen mit einem deutlich höheren effektiven US-Zollsatz von nahezu 37Prozent konfrontiert, während dieser für Japan bei 14Prozent und für das Vereinigte Königreich bei 6, 3Prozent lag. Im Kontrast dazu wurden USImporte aus Kanada und Mexiko effektiv lediglich mit 3, 8Prozent verzollt. Auf den ersten Blick scheinen die Unterschiede in den durchschnittlichen effektiven Zollsätzen bislang nur begrenzte Auswirkungen auf die Handelsströme gehabt zu haben, da sich die Anteile der US-Importe aus der EU und anderen Industrieländern nur moderat verändert haben. Im Gegensatz dazu halbierte sich der Anteil Chinas an den US-Importen zwischen 2024 und 2026 nahezu, was auf eine erhebliche Handelsumlenkung zulasten Chinas hindeutet. Der Schwerpunkt dieses Reports liegt auf einer vertieften Analyse der Auswirkungen des US-EU Deals, des sogenannten Turnberry Deals, der von September 2025 bis Februar 2026 bereits in Kraft war. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwkrep:342421 |
| By: | Kolev-Schaefer, Galina; Sultan, Samina |
| Abstract: | As the US celebrates a quarter of a millennium of independence, transatlantic trade relations stand at a crossroads. The year 2025 was marked by the introduction of unprecedented tariffs by the US administration. Despite these tensions, the exchange of goods between the EU and the US climbed to an all-time high of 875 billion euros, with exports of the EU to the US amounting to 580 billion euros, a rise of 7.7 percent, while imports from the US to the EU stood at 295 billion euros, up 2.2 percent (according to balance of payments statistics). The resulting EU goods trade surplus with the US approached 285 billion euros, a new high. Moreover, transatlantic trade in services surpassed 865 billion euros - likewise a record. At first glance, the recordlevel data might suggest that tariffs and political friction have left the underlying economic relationship largely unaffected - or have even inadvertently intensified it. This first impression, however, is misleading. This Report analyses the transatlantic trade relations in greater detail and reveals how much the US-tariffs distorted trade flows with the EU last year. |
| Abstract: | Während die USA ein Vierteljahrtausend ihrer Unabhängigkeit feiern, stehen die transatlantischen Handelsbeziehungen an einem Wendepunkt. Das Jahr 2025 war von der Einführung beispielloser Zölle durch die USRegierung geprägt. Trotz dieser Spannungen erreichte der Warenhandel zwischen der EU und den USA mit 875 Milliarden Euro einen historischen Höchststand. Die Exporte der EU in die USA beliefen sich auf 580 Milliarden Euro, ein Anstieg von 7, 7 Prozent, während die Importe aus den USA in die EU 295 Milliarden Euro erreichten und damit um 2, 2 Prozent zunahmen (gemäß Zahlungsbilanzstatistik). Der daraus resultierende EU-Warenhandelsüberschuss gegenüber den USA näherte sich mit knapp 285 Milliarden Euro ebenfalls einem Rekordwert. Darüber hinaus überstieg der transatlantische Dienstleistungshandel 865 Milliarden Euro - ein neuer Höchststand. Auf den ersten Blick könnten diese Rekordwerte darauf hindeuten, dass Zölle und politische Spannungen die zugrunde liegenden Wirtschaftsbeziehungen weitgehend unberührt gelassen oder sogar unbeabsichtigt intensiviert haben. Dieser erste Eindruck ist jedoch irreführend. Der vorliegende Bericht analysiert die transatlantischen Handelsbeziehungen genauer und zeigt, wie stark die US-Zölle die Handelsströme mit der EU im vergangenen Jahr verzerrt haben. |
| JEL: | F02 F10 F15 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwkrep:342428 |
| By: | Buti, Marco; Messori, Marcello |
| Abstract: | In April 2024, the European institutions agreed on a new set of fiscal rules that are now being implemented. We develop a simple model to compare the old Stability and Growth Pact and the newly reformed fiscal framework. We model the implementation of the rules as a game between a high-debt country and the European Commission. A main feature of the model is that, whilst under the old fiscal rules the objectives of growth and stabilisation were outside the institutional setting and hence needed to be introduced externally by making the rules more flexible, under the new rules the goal of boosting growth is built into the framework, and it is pursued via promoting reforms and investment. This implies that the incentives to comply with the rules are higher under the new rules. Should nonetheless the Member state renege on its commitments, the Commission would have a much stronger legitimacy to tighten the implementation of the rules by withdrawing the more gradual fiscal adjustment granted to the national authorities in exchange for reforms and investment. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19627 |
| By: | Tom Coupé (University of Canterbury); Oleksandr Shepotylo |
| Abstract: | This paper analyzes how President Trump’s Liberation Day affected attitudes toward trade policy in the European Union. Comparing the attitude of respondents who were interviewed in the days before Liberation Day to the attitude of those interviewed in the days after, our preferred regression specification suggests that Liberation Day led to a 5.7 percentage points increase (from about 42 percent before Liberation Day) in the share of respondents who totally agreed that customs tariffs harm the global economy. At the same time, we find no statistically significant effects on support for a common EU trade policy, EU retaliatory tariffs, or greater rules-based cooperation. Thus, while a major real-world shock had a modest effect on beliefs about trade policy, it did not significantly shift policy preferences. |
| Keywords: | Trade Policy, Attitudes, Liberation Day |
| JEL: | F13 D72 F14 |
| Date: | 2026–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:cbt:econwp:26/06 |
| By: | Gerards Iglesias, Simon; Reeves, Nicolas |
| Abstract: | Vor dem Hintergrund der globalen geoökonomischen Fragmentierung und der geopolitischen Unordnung, insbesondere durch die Politik unter US-Präsident Donald Trump, gewinnt ein Freihandelsabkommen (FTA) zwischen der Europäischen Union (EU) und dem Golf-Kooperationsrat (GCC) an strategischer Bedeutung. Die sechs GCC-Mitgliedsstaaten - Saudi-Arabien, die Vereinigten Arabischen Emirate (VAE), Katar, der Oman, Bahrain und Kuwait - setzen zunehmend auf regionale und internationale Konnektivität sowie den Ausbau erneuerbarer Energien, um alternative Geschäftsmodelle zum Export fossiler Brennstoffe aufzubauen. Nach Ausbruch des Ukraine-Krieges gewann das Potenzial der Golfstaaten als verlässlicher, energiereicher Stabilitätsanker in geografischer Nähe zunächst an Bedeutung und führte zu einem verstärkten Engagement Berlins und Brüssels am Golf. Der jüngste amerikanisch-israelische Krieg gegen den Iran stellt jedoch einen Stresstest für diese wichtigen ökonomischen Grundpfeiler der Partnerschaft zwischen Europa und den Golfstaaten dar: der Warenverkehr durch die Straße von Hormus, das Haupttor der fossilen Exporte aus der Arabischen Halbinsel, ist blockiert, während iranische Angriffe gegen zivile Ziele das Image des GCC als sicherer Hafen für internationale Geschäfte und Logistik in Frage stellt. Nichtdestotrotz argumentiert der vorliegende Report für eine Vertiefung der wirtschaftlichen Partnerschaft zwischen der EU und dem GCC. Gerade in der gegenwärtigen volatilen geopolitischen Lage würde ein umfassendes Freihandelsabkommen mit regulatorischer Harmonisierung, gezielter Investitionsförderung sowie einer Kooperation bei nachhaltigen Energien und Wertschöpfungsketten für die EU große Vorteile verschaffen. Am Beispiel des bestehenden Freihandelsabkommens der Golfstaaten mit den EFTA-Ländern (Norwegen, Schweiz, Island, Liechtenstein) zeigt dieser Beitrag, dass die EU nicht nur gegenüber Wirtschaftsmächten wie China Handelsanteile am Golf verloren hat. Die EFTA-Exporte in den GCC wuchsen nach Abschluss des Freihandelsabkommens um rund 45 Prozent stärker als die der EU. Auch auf der Importseite zeigt sich eine deutlich stärkere Verflechtung der EFTA mit den Golfstaaten. Die Ergebnisse verdeutlichen, dass das Abkommen nicht nur den EFTA-Staaten ermöglicht, eine stärkere Exportdynamik zu entfalten, sondern auch die Ausweitung der Importe vorantreibt, insbesondere in rohstoffnahen und vorleistungsintensiven Bereichen. Gleichzeitig verdeutlichen die Auswirkungen des EFTA-Abkommens, dass für die EU ein rein zollfokussiertes Abkommen begrenzte ökonomische Vorteile auf der Exportseite verspricht. Nur ein zukunftsorientierter Rahmen, der über klassische Handelsfragen hinausgeht, kann das volle strategische Potenzial der Partnerschaft in einem geopolitisch aufgeladenen Umfeld erschließen. |
| Abstract: | Against the backdrop of global geoeconomic fragmentation and geopolitical disorder, particularly driven by the policies of U.S. President Donald Trump, a free trade agreement (FTA) between the European Union and the Gulf Cooperation Council is gaining strategic importance. The six GCC member states - Saudi Arabia, the United Arab Emirates, Qatar, Oman, Bahrain, and Kuwait - are increasingly prioritizing regional and international connectivity, as well as the expansion of renewable energy in order to develop alternative business models beyond the export of fossil fuels. Following the outbreak of the Russian invasion of Ukraine, the Gulf states' potential as reliable, energy-rich anchors of stability in Europe's immediate neighborhood gained greater significance, prompting stronger engagement by Berlin and Brussels in the Gulf region. However, the recent U.S.-Israeli war against Iran represents a stress test for these key economic pillars underpinning the partnership between Europe and the Gulf states: trade flows through the Strait of Hormuz, the main maritime gateway to the Arabian Peninsula, have been disrupted, while Iranian attacks on civilian targets have called into question the GCC's image as a safe haven for international business and financial flows. Nevertheless, this report argues in favor of deepening the economic partnership between the EU and the GCC. Especially in the current volatile geopolitical environment, a comprehensive free trade agreement featuring regulatory harmonization, targeted investment promotion, and close cooperation on sustainable energy and industrial development would offer substantial benefits for the EU. Using the Gulf states' existing free trade agreement with the European Free Trade Association countries - Norway, Switzerland, Iceland, and Liechtenstein - as a case study, this paper shows that the EU has lost market shares to competitors benefiting from trade agreements. EFTA exports to the GCC grew by around 45 percent more than EU exports following the conclusion of the agreement. On the import side as well, EFTA countries exhibit significantly stronger integration with the Gulf region. These findings suggest that the agreement has not only enabled EFTA states to generate stronger export growth, but has also stimulated import expansion, particularly in resource-related and intermediate goodsintensive sectors. At the same time, the effects of the EFTA FTA demonstrate that a purely tariff-focused agreement would offer only limited economic benefits for Brussels. Only a forward-looking framework that extends beyond traditional trade issues can unlock the full strategic potential of the partnership in an increasingly geopolitically charged environment. |
| JEL: | F13 F14 N45 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwkrep:342417 |
| By: | Aleksandra Jandric (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague); Adam Gersl (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague) |
| Abstract: | This paper examines the relationship between private equity investment and industry-level performance in Europe over 2008-2023. We combine Invest Europe and Eurostat data to construct harmonized country-sector-year panels covering 16 countries overall and 10 sectors, with outcome-specific estimation samples. PE intensity is measured relative to sectoral production value and enters the models with a one-year lag. Baseline fixed-effects models are complemented by additional fixed-effects structures, timing tests and robustness checks. Results indicate that higher lagged PE intensity is consistently associated with stronger subsequent nominal growth in output and value added. Personnel-cost growth is also generally positively associated with PE intensity. By contrast, the employment association is weaker: it loses statistical significance under several robustness checks and does not display the temporal ordering observed for the monetary outcomes. The paper updates the limited European industry-level evidence using a novel harmonized dataset and a period covering substantially different economic conditions, offering new insight into the extent to which PE investment intensity is associated with broader sector-level outcomes. |
| Keywords: | Private equity; Investment; Industry growth; Production; Employment; Panel data; Europe |
| JEL: | G24 G32 C23 E44 L25 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:fau:wpaper:wp2026_22 |
| By: | Nicoli, Francesco; Biten Butorac, Merve (Universitat Autònoma de Barcelona) |
| Abstract: | Crises are often treated as engines of European integration, although the public-opinion mechanism behind crisis-led integration remains underspecified. This article argues that support for EU crisis powers depends on the configuration of the crisis: its symmetry, intensity, field of impact, direct national exposure, and attribution of responsibility. The argument is tested through a crisis-profile conjoint experiment fielded in France, Germany, Italy, Poland, Spain, and the United Kingdom between 20 April and 1 May 2025. Respondents evaluated crisis profiles and indicated whether the EU should receive fewer powers, no change in powers, or more powers to address the crisis. The results indicate that military crises, high-intensity crises, symmetric crises, and crises directly affecting the respondent's country create more favourable public-opinion conditions for EU competence expansion. Fiscal and economic crises generate less support than military crises and natural-disaster crises. Attribution of responsibility mainly affects opposition to integration: when EU policies are not blamed for the crisis, respondents become less likely to prefer fewer EU powers. These findings identify demand-side conditions under which stylised crisis descriptions make European action more acceptable as protection against a common shock. |
| Date: | 2026–07–21 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:audc8_v1 |