This policy report analyzes one aspect of the sovereign-bank nexus: the feedback effects between banks and sovereigns derived from the holdings of sovereign debt in domestic banks. We study how this relationship evolved during the European debt crisis and how it responded to the implementation...

The Great Financial Crisis caused a deep recession and led to very large public deficits. When financial market tensions erupted, many European countries were forced to reduce their deficits. This ‘austerity’ is often credited with the disappointingly slow recovery during the years after the...

We design and conduct large-scale surveys and experiments in eleven European countries to examine the effect of the COVID-19 pandemic on social trust, reciprocity, solidarity as well as institutional trust. Using incentivized outcome questions on trust and solidarity towards fellow citizens,...

This paper discusses the introduction of new own resources to finance the EU budget. Currently roughly two thirds of the budget is financed from GNI-based own resources, which are essentially contributions made by the member states out of national tax revenues. While GNI resources are...

Alongside a range of already well documented factors such as deindustrialization, technological progress and international trade, a series of recent empirical econometric studies show that immigration has contributed to the rise of extreme right-wing parties in Europe. Our study highlights,...

This paper conceptualizes an appropriate path for fiscal policy starting from the early phase of the pandemic up to the final transition to a post-pandemic new normal. Using this yardstick, it assesses the initial fiscal response of Member States. It exploits fiscal projections and program data...

The EU faces the challenge to combine large and sustained investments to promote the transition towards a green, digital, and competitive Europe while maintaining fiscal sustainability. Based on a comprehensive literature review on the effects of fiscal rules and investment clauses on public...

Recent events and rising geopolitical tensions have raised concerns about the external dependence and vulnerability of Europe’s economy. Decision-makers need to rethink the playing field of geoeconomics and should be prepared for different trade policy scenarios that may arise from new...

Europe has to respond to a new and more contested security order. Russia’s imperial ambitions threaten stability and peace, while the United States demands from the European NATO countries to contribute more to their own security. To improve defence capabilities, Europe has to increase defence...

From the earliest announcement of the European Green Deal, the current EU political cycle has been defined by an unprecedented acceleration in the scale and pace of climate policy. Under difficult conditions that sometimes tested the ability to engage stakeholders, including various external...