rss_2.0Intereconomics FeedSciendo RSS Feed for Intereconomics Feed Supply Security: Guidelines and Policy Proposals<abstract> <title style='display:none'>Abstract</title> <p>Supply security is threatened by technical, business, natural and policy shocks, as well as geopolitical tensions. Is there a rationale for policy intervention? If yes, what are efficient and effective measures that achieve de-risking? This article first explains why private incentives do not generally lead to an optimal diversification of supply sources, and then discusses measures that strengthen protection against and resilience in the face of shocks. Governments should refrain from policies that further disincentivise diversification such as the <italic>ex post</italic> skimming of excess profits when adverse shocks force the halt of production and should work on framework conditions that facilitate diversification. Importantly, most measures are best taken at the EU level.</p> </abstract>ARTICLEtrue Evidence Gap in Labour Shortage Assessments Europe’s Cognitive Dissonance Introduction: From Unemployment Struggles to Labour Market Shortages? Skills – Changing Paradigms and the EU Response World Heavyweight in Agricultural Trade<abstract> <title style='display:none'>Abstract</title> <p>BRICS, the 15-year-old alliance of Brazil, Russia, India, China and South Africa, has emerged as an important actor on the global political and economic stage, not least by expanding its membership to include middle-power states Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates in early 2024. Much like the countries of the G7 and the EU, BRICS members are among the major players in international agri-food markets. BRICS and the G7 have accounted for around one-seventh of each other’s agricultural exports in the past decade. However, excessive protectionism and mounting sanctions as well as ideology-driven de-risking strategies are a high-risk venture that could ultimately lead to isolationism and the formation of blocs. Food insecurity is growing, primarily at the expense of poorer people in the Global South. Against this background, it seems advisable to balance geopolitical and geoeconomic interests by turning away from confrontational Stone Age politics and towards more cooperative approaches, such as more diplomacy.</p> </abstract>ARTICLEtrue EU’s Digital Markets Act: Regulatory Reform, Relapse or Reversal?<abstract> <title style='display:none'>Abstract</title> <p>As of 7 March 2024, the EU Commission began to enforce its controversial Digital Markets Act (DMA). This article sheds light on the recent debate. It lists the dos and don’ts of the DMA as well as stakeholder reactions to them before tracing some of the underlying motivations and reasoning that emerge from the EU’s current policy reversal with reference to dealing with abuse of dominant positions in line with Article 102 of the Treaty on the Functioning of the European Union. Following this, the paper reviews economic aspects of digital platforms, concerns about market foreclosure and essential facility as well as appropriate remedies before closing with a discussion of the challenges in stipulating and enforcing efficient rules to govern digital platforms. It is argued that the DMA ought to be rewritten to stipulate clear and cogent legal standards, return to a strengthened system of ex post control and provide platforms with the opportunity to deliver efficiency defenses as part of corporate self-regulation.</p> </abstract>ARTICLEtrue Shortages: What Is the Problem? Change in the EU’s Macroeconomic Imbalance Procedure<abstract> <title style='display:none'>Abstract</title> <p>EU member states observe an elaborate process to preserve macroeconomic stability: the macroeconomic imbalance procedure (MIP). The MIP is supposed to monitor and prevent macroeconomic imbalances – and if necessary, correct them. It considers a variety of variables to determine the existence of imbalances, e.g. the current account balance or unit labour costs. However, the macroeconomic impact of climate change is ignored. In light of the growing economic risks due to climate change, this article argues that the MIP should consider climate-related risks explicitly to maintain relevance.</p> </abstract>ARTICLEtrue and Cyclical Risks in Housing Markets in OECD Countries<abstract> <title style='display:none'>Abstract</title> <p>This paper analyses the housing markets of OECD countries using a scoring model. This model is based on a European Systematic Risk Board approach to risk assessment of housing markets but extends this approach in two important ways. First, this paper distinguishes between cyclical and structural risk factors. Markets facing higher susceptibility to cyclical risks necessitate a distinct policy approach to prevent or handle disruptions, as opposed to markets primarily affected by structural risks. Second, it illustrates that scoring models contain subjective aspects, e.g. in the choice of weighting factors. We develop four distinct models to weigh risk factors. We show that these different weighing schemes have a significant impact on the estimated risk scores. For policy decisions, such models can therefore only be an indication of the vulnerability of housing markets to crises. Therefore, several scenarios and models should be calculated in parallel to reduce subjectivity.</p> </abstract>ARTICLEtrue at Work: The Age of Shortages from America: Biden’s International Trade Policy: Déjà Vu, Again in European Public Goods While Maintaining Fiscal Discipline at Home<abstract><title style='display:none'>Abstract</title> <p>Putting the high public debt ratios on a downward path after the surge during the pandemic and allocating sufficient resources to deliver on the green and digital transition will be among the priorities confronting the EU institutions emerging from the June 2024 European elections. After a long and painful debate, EU institutions have agreed upon a new fiscal rulebook that aims to incentivise the reallocation of national public spending to the green and digital transition. However, the additional public investment is unlikely to suffice to comply with the goals of net zero that the EU has set for itself. In particular, investments of a transnational nature will remain undersupplied. This article proposes setting up a successor to NextGenerationEU – a new EU fund until 2030 for financing European public goods (EPGs) to address the double transition. Access to the facility would be conditional on adherence to the EU fiscal rules. By tying up the implementation of the new fiscal framework, the debate on the future of NextGenerationEU and the next multiannual EU budget post-2027, the credibility and internal consistency of these various instruments will be greatly enhanced.</p> </abstract>ARTICLEtrue Protests and the 2024 European Parliament Elections The Trump Effect Is Forcing Europeans Out of Their Comfort Zone the EU Fit for 55 and Beyond? Independent Fiscal Institutions Need to Be Stronger to Perform Effectively<abstract><title style='display:none'>Abstract</title> <p>In April 2023, the European Commission issued a directive proposal on EU economic governance reform. The Council cut some tasks of Independent Fiscal Institutions (IFIs) that were in the Commission directive proposal; whether this cutting is justified is an open question. Early this year, the Council and the Parliament reached a provisional agreement on the proposed reform of the EU economic governance framework. The vision of the Commission that would involve IFIs in the assessment of fiscal-structural plans is not groundless. But structural reforms and investment analysis demand expertise that hardly exists in most national IFIs, and their involvement in policy design could be perceived as a technocratic inroad into democratic decision-making. In order to play a more significant and effective role, national IFIs need adequate resources and enhanced analytical capacity; their activity depends heavily on the policy design of the EU economic governance. National IFIs should view their role from a macroprudential perspective, too. The role of IFIs should not go beyond what most of them can deliver effectively, so that their status and reputation are not harmed.</p> </abstract>ARTICLEtrue Political Contestation over Macroeconomic Policy After NextGenerationEU: Throwing Away Their Shot?’s Trade Surplus – Implications for the World and for Europe<abstract><title style='display:none'>Abstract</title> <p>China’s merchandise trade surplus has reached an all-time high and is likely to rise further. A key driver appears to be a policy push to further bolster Chinese domestic manufacturing production, implying the danger of significant overcapacities. China’s imbalance between domestic production and consumption implies that China draws on the domestic demand of other countries to sustain its economic growth. It does so at the potential expense of production and employment of those trading partners with high trade deficits with China. As this constellation could be the source of growing trade conflicts, this article analyses China’s growing trade surplus in several dimensions with a focus on Chinas trade relation to the EU.</p> </abstract>ARTICLEtrue in Diversity: The Economic Policy Platforms of the EU’s Far Right