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Policy Brief

Collective action in a fragmented world

International collective action is in search of a new paradigm. It cannot rely anymore on global binding rules supported by universal institutions. New forms of cooperation have emerged in a number of fields. Europe should equip itself to be an effective player in this new global game. This calls for internal governance reforms.

By: Date: September 11, 2019 Topic: Global Economics & Governance

The issue

There is a greater need than ever for international collective action. From climate preservation to financial stability and internet security, heightened interdependence calls for common responses to global threats. Obstacles to global collective action are no less formidable. Beyond President Trump’s stance and worldwide concerns over sovereignty, the China-US rivalry and the emergence of a multipolar world are impediments of a structural nature. The legal and institutional architecture of the rules-based global governance system looks increasingly incomplete and obsolete. A process of fragmentation has started to affect its core tenets. None of the main players is providing leadership. The US is increasingly questioning its post-war role; China is reluctant to invest in a system designed by others; Europe remains too weak and fragmented to offer sufficient leadership.

Policy challenge

International collective action is in search of a new paradigm. It cannot rely anymore on global binding rules supported by universal institutions. New forms of cooperation have emerged in a number of fields. These are soft pledge-and-review mechanisms, cooperation between independent agencies, regional groupings, coalitions of the willing and open partnerships involving non-state participants and knowledge networks. To maximise the effectiveness of such arrangements, they should rely on a limited set of universal principles and be served by nimble and legitimate institutions. Existing international institutions should be regarded as globalisation’s social capital. There are problems that will not be solved without having recourse to strong participation and enforcement mechanisms such as sanctions or pecuniary incentives. Europe should equip itself to be an effective player in this new global game. This calls for internal governance reforms.

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What is fuelling the Dutch house price boom?

Housing prices have been rising fast in the West of the Netherlands in the last five years. However, mortgages outstanding have remained flat, raising the question of what has driven the increase. Evidence suggests that housing supply constraints have, this time around, played a role in pushing the house prices up.

By: Sybrand Brekelmans Topic: European Macroeconomics & Governance Date: February 19, 2020
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Recent euro-area house price increases are dissimilar to earlier housing booms

Current housing markets relative to those pre-crisis seem to be far less driven by mortgage credit, and the size of the construction sector has not increased. This is possibly good news for financial stability because an eventual house price correction would transmit less into mortgage defaults and corrections in economic activity.

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This event will challenge the narrative that Europe is in decline, by asking whether Europe does in fact rule the world.

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On gains, losses, and trade-offs: the case of Border Carbon Adjustment

How will the border carbon adjustment be implemented and what will be the implications?

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India-EU Partnership: New Vistas for the Next Decade

Policymakers, academics and private sector actors from the EU and India come together to work on common issues and explore further areas of cooperation.

Speakers: Yamini Aiyar, Suman Bery, Navroz K Dubash, Alicia García-Herrero, Rajat Kathuria, Partha Mukhopadhyay, Ananth Padmanabhan, Georgios Petropoulos, André Sapir, Shyam Saran, Simone Tagliapietra and Marc Vanheukelen Topic: Global Economics & Governance Location: India International Centre, Lodhi Gardens, Lodhi Estate, New Delhi, Delhi, India
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The new age of old age? Laying out the Non-Financial Defined Contribution scheme

Are Non-Financial Defined Contribution (NDC) schemes the best approach to reforming pension systems?

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Upcoming Event

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How adequate is the European toolbox to deal with financial stability risks in a low rate environment?

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Speakers: Gabriel Makhlouf, Guntram B. Wolff and Agnès Bénassy-Quéré Topic: European Macroeconomics & Governance, Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels
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Policy Contribution

European Parliament

From climate change to cyber attacks: Incipient financial-stability risks for the euro area

The European Central Bank’s November 2019 Financial Stability Review highlighted the risks to growth in an environment of global uncertainty. On the whole, the ECB report is comprehensive and covers the main risks to euro-area financial stability, we highlight issues that deserve more attention.

By: Zsolt Darvas, Marta Domínguez-Jiménez and Guntram B. Wolff Topic: European Macroeconomics & Governance, European Parliament, Finance & Financial Regulation, Testimonies Date: February 6, 2020
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Working Paper

Zsolt Darvas - Resisting deglobalisation: the case of Europe

Resisting deglobalisation: the case of Europe

Global trade and finance data indicates that the pre-2008 pace of economic globalisation has stalled or even reversed. The European Union has defied this trend, with trade flows and financial claims continuing to grow after the recovery from the 2008 global economic and financial crisis. Immigration, including intra-EU mobility, has also continued to increase.

By: Zsolt Darvas Topic: European Macroeconomics & Governance Date: February 4, 2020
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External Publication

From globalization to deglobalization: Zooming into trade

This article shows some evidence of the decrease in merchandise, capital and, to a lesser extent people to people flows.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: February 3, 2020
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Incorporating political risks into debt sustainability analysis

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By: Andrea Consiglio and Stavros Zenios Topic: European Macroeconomics & Governance, Global Economics & Governance Date: January 22, 2020
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External Publication

Factors determining Russia’s long-term growth rate

This paper’s main conclusion is that Russia’s economy cannot grow at the pace recorded in the early and mid-2000s because of the different external environment, the different stage of development and serious demographic headwinds.

By: Marek Dabrowski Topic: Global Economics & Governance Date: January 16, 2020
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