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on European Economics |
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Issue of 2025–09–22
seventeen papers chosen by Simon Sosvilla-Rivero, Instituto Complutense de Análisis Económico |
| By: | Westerheide, Jule; Matuschek, Ingo; Kleemann, Frank |
| Abstract: | Der Artikel untersucht heterogene Entwicklungspfade dezentralisierter Tarifsysteme nach den einschneidenden arbeitspolitischen Reformen in den EU-Mitgliedsstaaten in der Eurokrise (2010-2012) anhand der kontrastierenden Fallbeispiele Spanien und Griechenland - zwei stark wirtschaftlich und tarifpolitisch betroffenen südeuropäische Staaten. Während in Spanien das Regulationsinteresse der Arbeitgeberverbände und die institutionelle Verankerung der Gewerkschaftsverbände den Sozialen Dialog bewahren, gelingt es in Griechenland aufgrund der Zersplitterung der Verbände und der Hostilität der Arbeitgeberverbände gegenüber Gewerkschaften nicht mehr, die Erosion des Tarifvertragssystems aufzuhalten. Auf Basis von Interviews mit Vertreter:innen der jeweiligen Tarifparteien sowie der Analyse von Positionspapieren und Sekundärliteratur wird die Agency der Verbände - konkreter ihre interessenpolitischen Strategien und ihre insitutionellen wie organisatorischen Machtressourcen - als Einflussgröße der länderspezifischen Tarifverhandlungspraxis diskutiert. Der Artikel plädiert für eine systematische Berücksichtigung der Agency der Interessenverbände in den industriellen Beziehungen in nationalspezifischen Settings bei homogenen EU Policies. |
| Abstract: | A decade after the drastic labor policy reforms in the EU member states following the Euro crisis (2010-2012), this article examines heterogeneous trajectories of decentralized collective bargaining systems in the EU by contrasting the case studies of Spain and Greece - two southern European states that are strongly affected by collective bargaining policies. While in Spain the regulatory interest of the employers' associations and institutional resources of the trade union associations preserve the social dialogue, in Greece, the erosion of the collective bargaining system is ongoing due to the fragmentation of trade unions and the hostility of employers' associations toward trade unions. Based on interviews with representatives of the respective bargaining parties as well as analysis of position papers and secondary literature, the article discusses the agency of the associations - specifically the interest-driven strategies and institutional and organizational power resources - as a factor influencing country-specific collective bargaining practices. The article argues for a systematic consideration of the agency of interest groups in industrial relations in nation-specific settings with homogeneous EU policies. |
| Keywords: | Tarifsysteme, Deregulation in der EU, Gewerkschafts- und Arbeitgeberverbände, vergleichende Studie, collective bargaining, deregulation in the EU, trade unions and employer bodies, comparative studies |
| JEL: | P52 J52 J51 L51 J31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:udesoz:325835 |
| By: | Alberto Montagnoli; Miroslava Quiroga-Trevino; Christoph Thoenissen |
| Abstract: | This paper provides empirical evidence on the balance sheet channel of fiscal policy in peripheral European economies. Our findings using a Panel VAR, reveal that shifts in financial institutions' balance sheets following a debt-financed fiscal expansion, reduce credit provision and investment in these countries. Moreover, the analysis indicates that economies with higher sovereign exposure experienced higher credit crunches and investment declines. To explore the underlying mechanisms, we estimate a DSGE model that incorporates banks as primary holders of sovereign debt. The model shows that sovereign exposure amplifies the negative effects on credit supply, lowering investment and capital formation. A counterfactual scenario without bank-held sovereign bonds isolates the contribution of the balance sheet channel: removing this channel weakens the crowding-out effect, with investment falling 0.2 percentage points less and output increasing by 0.02 percentage points more. These effects appear stronger during the financial and sovereign debt crises. |
| Keywords: | SVAR;DSGE;Bayesian estimation;Fiscal policy;Sovereign debt;Credit;Euro Area. |
| JEL: | C11 E32 E44 E62 H63 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:bdm:wpaper:2025-12 |
| By: | Signorelli Serena (European Commission - JRC); Fabiani Josefina (European Commission - JRC); De Prato Giuditta (European Commission - JRC) |
| Abstract: | "This report presents a novel, network-based approach to map the global positioning of the EU across industrial ecosystems, benchmarking against other geographic areas, in particular the United States and China. Building on the DGTES methodology, initially applied to the digital ecosystem, we extend the framework to all 14 industrial ecosystems as defined by the European New Industrial Strategy. This work offers the first comparative, data-driven picture of the EU’s industrial landscape using a network-based approach. While not exhaustive, it offers early insights into Europe’s strengths, dependencies, and areas for strategic policy attention. It is intended as a starting point for deeper analysis, supporting the European Commission’s industrial priorities under ‘A new plan for Europe’s sustainable prosperity and competitiveness’." |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc142571 |
| By: | Smoleńska, Agnieszka; Weber, Anne-Marie; Opoka, Marcin |
| Abstract: | This article discusses the idea of a judicial accountability gap in the obligations of EU central banks in relation to climate change policy. With the interest in incorporating climate change considerations into monetary policy on the rise, legal scholarship has focussed largely on the toolbox at the disposal and the political accountability of central bankers with respect to the sustainability transition. The judicial route has so far remained largely unexplored, the general global trend of climate litigation notwithstanding. In light of this omission, we develop a framework to address the judicial accountability gap in three steps. First, we explain the implications of the special status of climate change mitigation objectives in the EU constitutional order on members of the European System of Central Banks (ESCB). Then, we explain how these treaty obligations apply not only to the Eurosystem, which has been well explored in the literature, but also to non-euro area Member States. This point is particularly underexplored, despite its significant implications for the success of the EU’s sustainable finance agenda, which is contingent on a supportive macrofinancial regime. Finally, we discuss different judicial accountability routes to ensuring that central banks adequately incorporate the secondary mandate objectives in their policies. We examine whether establishing a “minimum standard” for meeting treaty obligations on incorporating climate change considerations into central bank policies could lead to the conceptualisation of a standard of judicial review across the EU, thereby enhancing the democratic legitimacy of central banks within the EU’s economic constitution. |
| Keywords: | accountability; central banks; climate change; economic and monetary policy; EU law; European Central Bank; European system of central banks; sustainability |
| JEL: | F3 G3 |
| Date: | 2024–08–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125471 |
| By: | Kerola, Eeva; Laine, Olli-Matti; Paavola, Aleksi |
| Abstract: | This study examines the floating rate channel-a mechanism through which monetary policy affects firms' investment and credit demand based on their exposure to variable rate loans. Using a granular loan-level dataset from the euro area, we find that firms with variable rate loans significantly reduce their investment-related borrowing after monetary tightening, compared to firms with fixed rate loans. This effect is most pronounced among the smallest firms, consistent with the theoretical view that the floating rate channel is explained by financial constraints. Our results highlight the heterogeneity in firms' reactions to interest rate changes and underscore the importance of accounting for firm size and financial constraints in monetary policy analysis. |
| Keywords: | monetary policy, floating rate channel, euro area |
| JEL: | G21 G30 E52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofrdp:325483 |
| By: | Golebiowska-tataj Daria; Reimeris Ramojus (European Commission - JRC) |
| Abstract: | In the era of global geopolitical shifts, innovation and entrepreneurship are essential to Europe’s resilience, competitiveness, and strategic autonomy. This paper focuses on increase Europe’s competitiveness through instruments feeling innovation and entrepreneurial culture. The paper analyzes the position of European Union at national and regional level according to various global innovation indexes. It examines how to leverage the power of key innovation regions in Europe and how to tap on the potential of the most dynamic innovation hubs in Central and Eastern Europe. The authors examine quantitative databased and present two cases of Paris and Vilnius. The analysis leads to a conclusion that European innovation policy needs to reexamine innovation instruments which are not sufficiently focused on competitiveness and invest more in such instruments as for example the European Innovation Council. On the other hand, the most dynamic innovation ecosystems in CEE regions should be better networked with the leading hubs and used to test new policy approaches. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc142615 |
| By: | Kerola, Eeva; Norring, Anni |
| Abstract: | We use confidential loan-level data from the European Central Bank to investigate how changes in the countercyclical capital buffer requirement in Germany affect lending to firms. We find evidence showing that tightening the countercyclical capital buffer leads German banks to reduce the volume of corporate loans and increase the price of new loans. These effects take place immediately after the announcement, given 12 months before the change was implemented. Importantly, we find that the reduction in credit availability notably affects small and medium-sized enterprises, which experience both a significant decrease in available credit and an increase in credit costs. In contrast, large firms are not affected. |
| Keywords: | Macroprudential policy, Countercyclical capital buffer, Loan level data |
| JEL: | E58 G21 G28 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofrdp:325482 |
| By: | Biagi Federico (European Commission - JRC); Sala Jacopo |
| Abstract: | This report investigates the evolving occupational outcomes among young cohorts in Europe from 1995 to 2020. Using data from the European Labour Force Survey (EU-LFS), we evaluate how the likelihood of being employed in a cognitive occupation and receiving a temporary job has changed over time for young workers with different levels of education. Results reveal diverging fortunes. On the one hand, the probability of obtaining cognitive jobs has remained steady for tertiary-educated workers, but it has declined significantly for young workers who have only attained upper secondary education, especially in Southern and Northern Europe. On the other hand, the likelihood of receiving a temporary contract has increased substantially for more recent cohorts of young workers in all European areas, particularly for those with only upper secondary education. These findings call for a reflection on the future of jobs that have a large cognitive component (and for which higher education is generally a necessary requirement), especially in light of the recent development of artificial intelligence. On the other hand, the increased use of temporary contracts among young workers, especially in some EU areas, raises concerns on the long-term sustainability of the socio-economic (and demographic) situation of the EU, considering that educational and parenting choices tend to be concentrated in the earlier stages of the life-cycle. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc140850 |
| By: | Verdolini, Elena; Look, Wesley (Resources for the Future); Belpietro, Chiara; Persico, Giulia |
| Abstract: | The European Union (EU) is strongly committed to steering its economy away from high-carbon and pollution-intensive production and toward climate-neutral technologies and business models by 2050. If this transition is not accompanied by adjustment assistance, however, making deep reductions in greenhouse gas (GHG) emissions could disproportionately burden certain segments of society that are dependent on producing or using carbon-intensive energy resources as a primary employer or mainstay of the economy (Vona 2021). Many regional economies in Europe rely on fossil fuel extraction (oil, coal, or gas) or energy- and carbon-intensive production (e.g., steel production and electricity generation). As European Commission president Ursula von der Leyen has frequently stated, the large-scale deployment of low-carbon energy can succeed only if conducted in a fair and inclusive way for all European citizens (European Commission 2019k), what many refer to as just transition.The aim of this report is to distill important lessons learned from the EU experience in promoting just transition to help US policymakers identify key components of a comprehensive and effective energy transition policy package. The report examines EU-level programs implemented over the period 2014–20 and summarizes the policy changes proposed in the European Green Deal for 2020–25.The just transition concept originated in the US labor movement during the 1970s to describe the need for a support system for workers unemployed because of environmental protection policies (Henry et al. 2020). In the EU, the quality of work and life of its citizens has been a policy goal since its founding. One of the guiding principles of European policymaking is a commitment to reduce social, economic, and territorial development disparities among EU regions to promote integration and the economic growth of all member states. This is referred to as cohesion policy, which is enshrined in the Treaty on the Functioning of the European Union (Art. 174) and plays a crucial role in setting political priorities at the EU level (European Commission 2022g). Cohesion policy is the term used in the EU context to refer to regional policy. In the EU, socioeconomic development is promoted as an expression of solidarity between the EU member states and their regions. Programs and funding targeting socioeconomic development aim to remove economic, social, and territorial disparities across the EU, supporting the restructuring of declining industrial areas and diversification of declining rural areas. The rationale for cohesion policy is to mitigate the negative side effects from the creation of a single market and ensure that all EU citizens can reap the benefits (Samecki 2009). These policies and programs have been used as building blocks to shape EU just transition policy over time, including in the European Green Deal. For discussion of the evolving interpretation of just transition, see ILO (2015); Stevis and Felli (2015); Verdolini (2023).It is important to note that most of the EU programs we discuss are ultimately implemented and used by the member states, which have a fair degree of autonomy in selecting the projects to be funded within the broader design principles set up at the EU level. Other reports in this series have reviewed some of the ways these EU-level programs have been implemented in specific countries. Reports on just transition measures related to reductions in the coal sector in Germany, Poland, and the UK can be found on the RFF website at https://www.rff.org/publications/all-publications/?offset=12&topic=10098. The report on “Just Transition in Poland” examines the topic in the broader context of economic restructuring and increased regional integration of the country.Within the EU, the concept of just transition indicates the need to support and help territories and regions most affected by the transition to a climate-neutral economy, prioritizing those that have less capacity to deal with the costs of transition (European Commission 2019b). The EU currently distinguishes between regions dependent on extraction of coal and fossil fuels and those dependent on carbon-intensive industries (Alves Dias et al. 2021).This report does not present an exhaustive list of all programs and investments at the EU level that have been used to support workers and communities; rather, it identifies the key relevant EU policies and programs, describes their main features, and gives several examples of specific funded projects and activities. Many of these policies and programs have been motivated by other energy and economic issues, such as improving energy efficiency for energy security and enhanced productivity, but they include tools that are also applicable to just transition in the context of decarbonization.Sections 2 and 3 of this report focus on the policies and programs during the full EU long-term budget cycle from 2014 to 2020. Section 4 then discusses more recent EU policy priorities and programs, some of which are still being shaped under the European Green Deal. The report thus provides a broad picture of how the debate around just transition is reshaping and adjusting EU policies and programs. Section 5 concludes by summarizing the relevant lessons learned from the EU experience.The review of EU just transition policies provides several relevant insights for policymakers seeking to address equity and fairness issues in the United States’ energy transition. See Look et al. (2021) for a review of key issues for the US energy transition. We briefly summarize the key points here, with discussion of them in Section 5.The multiannual and investment-focused EU budget provides long-term, stable funding, which supports addressing many of the challenges associated with just transition.The EU Just Transition Mechanism aims to mobilize substantial public and private investment between 2021 and 2027 to support just transition efforts in Europe.The Just Transition Mechanism includes a Just Transition Platform to serve as a single access point for related EU-wide resources and a centralized source for technical assistance. The Biden administration has established a similar resource.The EU just transition policy framework requires EU member states to develop Territorial Just Transition Plans before accessing funds. The Biden administration has established a mechanism for rapid response teams to support local transition planning.One of the three pillars of EU just transition policy in the Green Deal is access to the Public Sector Loan Facility to support the implementation of just transition projects. The United States does not have a financing program explicitly dedicated to supporting transition in energy communities, although the creation of the Greenhouse Gas Reduction Fund in the Inflation Reduction Act may lead to a green bank that could support just transition efforts.EU R&D policy supports not only technology development but also innovation in the creation of stronger social institutions as a tool for responding to just transition challenges. The US federal government could do more to support research and pilot implementation of innovative approaches for addressing just transition. |
| Date: | 2024–02–08 |
| URL: | https://d.repec.org/n?u=RePEc:rff:report:rp-24-02 |
| By: | Kellen Lynch; Pinar Uysal; Ilknur Zer |
| Abstract: | European bank equity prices fell sharply following the April 2, 2025, U.S. reciprocal tariff announcement, reflecting investor concerns about rising trade tensions and their potential impact on global growth and financial stability. In this note, we examine how the effects of the tariff announcement on European banks varied with their trade exposure, capital strength, and asset quality. |
| Date: | 2025–08–26 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:2025-08-26 |
| By: | Noemi Walczak; Kenan Huremovi\'c; Armando Rungi |
| Abstract: | This paper examines the economic and environmental impacts of the European Carbon Border Adjustment Mechanism (CBAM). We develop a multi-country, multi-sector general equilibrium model with input-output linkages and characterise the general equilibrium response of trade flows, welfare and emissions. As far as we know, this is the first quantitative trade model that jointly endogenises the Emission Trading Scheme (ETS) allowances and CBAM prices. We find that the CBAM increases by 0.005\% the EU Gross National Expenditure (GNE), while trade shifts towards domestic cleaner production. Notably, emissions embodied in EU imports fall by 3\%, which is the result of a direct effect (-4.8\%) and a supply chain's upstream substitution effect (+1.8\%). The latter is a dampening effect that we can detect only by explicitly incorporating the production network. In contrast, extra-EU countries experience a slight decline in GNE (0.009\%) and emissions (0.11\%). |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.23341 |
| By: | Francesco Ravazzolo; Luca Rossini; Andrea Viselli |
| Abstract: | This paper introduces a novel Bayesian reverse unrestricted mixed-frequency model applied to a panel of nine European electricity markets. Our model analyzes the impact of daily fossil fuel prices and hourly renewable energy generation on hourly electricity prices, employing a hierarchical structure to capture cross-country interdependencies and idiosyncratic factors. The inclusion of random effects demonstrates that electricity market integration both mitigates and amplifies shocks. Our results highlight that while renewable energy sources consistently reduce electricity prices across all countries, gas prices remain a dominant driver of cross-country electricity price disparities and instability. This finding underscores the critical importance of energy diversification, above all on renewable energy sources, and coordinated fossil fuel supply strategies for bolstering European energy security. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.23289 |
| By: | Rossmann, Felix; Greitens, Jan; Knoll, Lisa |
| Abstract: | Sustainable finance regulations and initiatives across Europe have predominantly targeted large corporations, while small and medium-sized enterprises (SMEs) are increasingly drawn into the framework, often facing challenges such as resource constraints and complex documentation requirements. To capture the dynamics of this field, a European survey conducted in 2025 with responses mainly from German and Austrian companies examined SME engagement with sustainable finance. The findings show a rising share of SMEs investing in sustainability in comparison to the preceding study in 2023, with internal funding as the dominant source. Where external financing is used, it is primarily activated on publicly supported bank loans, whereas capital markets remain largely irrelevant for SMEs. While a connection between sustainability data collection and sustainable investment exists, many SMEs invest without systematically collecting data. These results highlight the continued centrality of traditional banking relationships as the main external financing channel for SMEs, which could serve to enable and facilitate capital flows toward sustainability rather than prescribe or direct them. |
| Keywords: | Sustainable Finance, Small and Medium-sized Enterprises, Sustainability Investment, Sustainability Reporting, Bank Financing |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cfswop:325834 |
| By: | Heise, Arne |
| Abstract: | This comment critically examines the recent claim by Alcobia and Barradas that the European Union follows a wage-led growth regime, warranting pro-labour policy intervention. While their findings support a clear policy stance, closer inspection reveals significant methodological and empirical shortcomings, including data limitations, panel heterogeneity, and questionable assumptions about causality. The paper challenges the robustness of their conclusions and questions whether functional income distribution can be effectively influenced by policy. It argues for greater theoretical caution and contextual sensitivity in policy recommendations, particularly given the unresolved ambiguities surrounding the wage- led/profit-led growth framework in diverse European economies. |
| Keywords: | Post Keynesian economics, functional income distribution, wage-led regime research |
| JEL: | C23 D33 E12 O47 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cessdp:325826 |
| By: | Sultan, Samina; Matthes, Jürgen |
| Abstract: | Vor dem Hintergrund des Zollkonflikts mit den USA untersucht dieser Report die Importabhängigkeit der USA von der EU und von Deutschland. Dazu wird die US-Warenhandelsstatistik auf der detaillierten 10-Steller-Ebene verwendet. Die Analyse zeigt, dass die USA eine relevante Importabhängigkeit von der EU aufweisen und diese nach einem starken Anstieg inzwischen sogar höher ist als die von China. Zudem ist die US-Importabhängigkeit von der EU für fast 180 als strategisch einstufbare Warengruppen anhaltend hoch. |
| Abstract: | Against the backdrop of the tariff dispute with the US, this report examines the US's dependence on imports from the EU and Germany. To this end, US merchandise trade statistics at the detailed 10-digit level are used. It is shown that the US's dependence on imports from the EU is significant and that, following a sharp increase, this dependence is now even higher than the US's dependence on imports from China. In addition, US dependence on imports from the EU has been continuously high for the last five years in almost 180 product groups that can be classified as strategic. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwkrep:325830 |
| By: | Manuela Magalhâes (Universidad de Málaga); Jesús Rodríguez-López (Universidad Pablo de Olavide) |
| Abstract: | Spanish aggregate productivity was negatively correlated with the business cycle from 2000 to 2014, but this correlation later turned positive between 2015 and 2019. In this paper, we ask if this change is related to financial restrictions and firm creation and destruction in Spain. Using firm- level administrative data, we reach the following conclusions. First, during the 2000–07 expansion, low-productivity firms with access to financial resources were able to continue operating; in turn, this led to a crowding-out of financial resources, and forced high-productivity but financially vulnerable firms to close. We find that on average exiting firms were significantly larger and more productive than entering firms, a situation that entailed productivity losses in this period. Second, following the tightening of credit conditions after 2008, we find a more efficient selection at both exit and entry margins: exiting firms were less productive than entering firms. Both findings help explain, at least in part, the change in the productivity-GDP correlation. Finally, in a counterfactual exercise we quantify the effects of type-I selection errors, i.e., the closure of productive but financially vulnerable firms: had market selection not presented type-I errors, relative total factor productivity at the exit margin would have been 3% to 6.5% higher, while gains in relative labor productivity would have ranged between 27% and 46%. |
| Keywords: | Firm exit and entry, business cycle, cleansing effects, miss-selection, firm survival. |
| JEL: | E23 E32 E44 G32 L11 L25 L60 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pab:wpaper:25.02 |
| By: | Oscar Camacho (The Brattle Group); Michelle Garfinkel (University of California-Irvine); Constantinos Syropoulos (School of Economics, Drexel University); Yoto Yotov (School of Economics, Drexel University) |
| Abstract: | How do geopolitical frictions matter for the diffusion of technology? Based on a guns-versus-butter model involving two countries (a technology leader and a technology laggard), we study the direct and indirect effects dual-use (or general-purpose) technology transfers on the countries' payoffs and hence their preferences over such transfers. A central finding is that, when the initial technological distance between the two countries is large whereas the degree of output security is low and the laggard's capacity to absorb state-of-the-art technologies is relatively limited, the leader has an incentive to block a transfer to the laggard. The analysis also unveils the possible emergence of a "low-technology trap."" Using data on cross-border patent flows as a proxy for technology transfers and sanctions as a proxy for conflict over the 1995-2018 period, we present evidence in support of the theory. |
| Keywords: | output insecurity, arming policies, power, sanctions, low-technology trap |
| JEL: | D30 D74 F51 O33 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202535 |