Suchergebnisse

Attempt to quantify the gains and losses for India from the changes in import tariffs decided during the Tokyo round of multilateral trade negotiations. Focus is laid on exports to the EEC, Japan, and the USA. Results indicate that gains for India from most-favoured nation tariff cuts far outweigh her losses due to the erosion of preference margins acquired under the generalized system of preferences. (Economische Voorlichtingsdienst)

The single market is often perceived as the panacea for Europe's economic troubles. It is believed that completing the single market would boost welfare, stimulate growth and increase European competitiveness. However, identifying and quantifying the channels through which market integration is expected to engender growth is methodologically complex. Although the overwhelming prediction from the literature is for single market integration to generate positive and significant aggregate effects, we conclude that the impact so far has fallen short of initial expectations, because: (1) Barriers continue to prevail in the EU, preventing the exploitation of the potential benefits of full market integration - (2) "Complementary policies" to support the single market were not, or were insufficiently, put in place - (3) The single market project has not sufficiently been framed as a key part of the process of creative destruction that Europe needs to embrace to successfully modernise its economy. That single market integration generates positive and significant aggregate effects does not imply that its effects are positive and significant for every sector. There is therefore an important role for European Union and national distributional policies to ensure that losers are sufficiently compensated by the winners, and to overcome political resistance to completing the single market.

A European banking union is necessary to ensure the stability of the European financial system. This paper assesses the EU Commission's proposals for legislation to create a banking union in Europe. The EU Commission's proposal for a regulation creating a single supervisory mechanism is strongly supported. At the same time, a European resolution authority is essential for the credibility of the single supervisory mechanism.

The European Union can look ahead at the next five years from a good economic position. Employment is comparatively high, the recovery has been uninterrupted for several years and income inequality remains less pronounced than elsewhere in the world. But the EU faces nevertheless formidable economic challenges. In the short-term, there is the potential for strong macroeconomic weakening, resulting partly from uncertainty generated by the global trade conflict. The EU also has a long-term growth and productivity weakness. Finally, the EU, especially the euro area, suffers from a lack of convergence and its social cohesion is threatened. the EU must put together a European growth strategy that focuses on innovation while addressing climate change and improving social cohesion. Growth requires investment, research and innovation. While the current debate on industrial policy is welcome, the EU should be careful to maintain, or even improve, the conditions for growth in Europe and must avoid falling into the protectionism trap. To achieve its climate goals, the EU must ensure that its consumption and its production become greenhouse-gas emission neutral by 2050 or earlier, implying a massive transformation of all economic activities. This will pose major economic and social challenges. Distributional concerns will therefore have to figure prominently in this transformation. More generally, the benefits of growth need to be distributed more fairly in our societies. While social policy is and should remain a national responsibility, the EU needs to ensure that the single market, a key asset to promote growth and economic well-being, does not undermine the ability of countries to raise taxes on capital income, wealth and inheritance. A rising tax burden on the working middle class might have already become incompatible with Europe's social market economy. convergence in the eu and in the euro area is a necessity: the European growth strategy cannot be blind to sustained regional growth differences. An EU in which economic growth does not spread through all of its major regions will be politically challenged. The paradox is that many of the policy instruments to address this problem remain in the hands of national policymakers, even though the way they use them has significant implications for the rest of the EU. The EU supports convergence through its budget and technical support but the fundamentals of this paradox remain. In the euro area, further measures are needed to address some of the systemic causes of divergence. In particular, it is imperative to complete banking union and for capital markets to become more integrated, since a well-functioning financial system is fundamental for growth. A euro-area safe asset would bring benefits but is difficult to establish. EU fiscal rules need to be reformed to improve the macroeconomic management of the euro area. A euro-area budget and more responsive national fiscal policies are important tools to better respond to cyclical downturns. Finally, the relationship between the euro area and non-euro area countries needs to be addressed.

The deepening and integration of the European Union's capital markets is a long-term structural endeavour. Although difficult to achieve, it is worthwhile for several reasons: a meaningful body of economic analysis strongly suggests that purely bank-based financial systems are more prone to crises and might produce lower growth performance; widely-accepted analysis suggests that cross-border capital market integration can be an important complement to fiscal risk sharing; and the departure from the EU of the United Kingdom - home to the EU's main capital market centre - makes the project even more relevant. Although integrating and deepening capital markets has been a long standing goal of the EU, actual progress has been limited. The European Commission's welcome Capital Markets Union (CMU) agenda has led to many legislative proposals to advance the development of EU capital markets. Although the European Council has repeatedly underlined the CMU's importance, only a few of these legislative proposals have been adopted. At this stage, significant progress will only be feasible if clear priorities are set. We argue that strengthening and expanding the role of the European Securities and Markets Authority (ESMA) should be prioritised because: (a) it is a relatively easily implementable step; (b) it would entrust an institution with driving the agenda forward; and (c) it would put an effective check on the potential financial stability and business conduct challenges that might arise from cross-border capital markets integration. Other major legislation, in particular on business insolvency and on personal pension products, could also be prioritised for completion during the current European Parliament legislative term.

The multilateral trading system is seriously threatened by the country which has been its main inspirer, the United States. The US position is focused on bilateral trade imbalances presumably resulting from unbalanced trade policies, but it is flawed. Not only does it make little sense given the existence of global value chains, but it also misses its target: what matters most are aggregate trade surpluses and deficits, which depend above all on the differential between domestic investment and savings, and little on trade policy. This Policy Contribution first analyses the economic consequences of a full-scale trade war. Our estimates show that it would have a permanent effect of a similar magnitude on the GDP per capita of the three major global powers (the European Union, the United States and China) of around 3 percent to 4 percent of GDP, as big as the effect of the Great Recession of 2008-09. The impact would be much more damaging for small countries. By contrast, the EU is partly protected by the size of its internal market. In addition, the short-term effects would be even greater because of the negative supply and demand shock the global economy would be subjected to. For this reason, the EU must engage resolutely in a strategy of defence of trade multilateralism. We recommend combining the adoption of firm and credible retaliatory measures in response to the current attacks with an offer of multilateral or plurilateral negotiations on legitimate issues: macroeconomic imbalances, institutional design of dispute settlement at the World Trade Organisation (WTO), reciprocity of commitments and updating of rules on subsidies, state-owned enterprises and intellectual property rights. However, considering how difficult plurilateral and multilateral negotiations with the US administration are, Europe needs a plan B. In the short term, this requires, for instance, coordinating a club of countries in order to identify and implement strategies to circumvent US blocking of the WTO at the Appellate Body level. In addition, we recommend pursuing an ambitious policy of trade agreements. The expected economic gains are modest. But trade agreements can play an additional role of insurance policies in case of full-scale trade war and can be used as leverage on other non-trade issues. Therefore, these agreements should change and address two main concerns about globalisation: environmental protection with the issue of global warming and problems related to tax evasion and optimisation. We therefore recommend making the signing of trade agreements conditional on the adoption of the OECD's action plan to combat erosion of the tax base and the implementation of the Paris Climate Agreement. We put forward progressive monitoring and sanction measures to ensure effective implementation.

The EU is a relatively open economy and has benefited from the global multilateral system. We argue that the EU should defend its strategic interests with three steps. First, it should collaborate with partners around the world in defence of multilateralism. Second, it should establish deeper economic relations with emerging economies. Collaboration in support of the Paris agreement is also essential. Third, the EU must be reformed to increase its external credibility. The Singapore ruling has offered a useful clarification on trade policy. Addressing internal imbalances would also increase external credibility. Finally, strengthening Europe's social model would provide a counter model to protectionist temptations.