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Unboxing the State of the Union 2021

In this Sound of Economics Live episode, Bruegel experts look at the State of the Union address delivered by Ursula von der Leyen, President of the European Commission. By: The Sound of Economics Date: September 15, 2021 Topic: European Macroeconomics & Governance On 15 September Ursula von der Leyen, President of the European Commission, delivered the State of the Union address before the European Parliament. She took stock of efforts of the past year to tackle the COVID-19...

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El Salvador’s great crypto experiment

Can bitcoin surpass the dollar in popularity and make El Salvador the first state to operate entirely with a private currency? By: Maria Demertzis Date: September 14, 2021 Topic: Finance & Financial Regulation This piece was original published in Money Review and is forthcoming in El Economista. In September 2021, the government of El Salvador became the first to make bitcoin legal tender. This means it can now be used to make payments and settle debts, if businesses have...

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Making supply chains more resilient

A Global Deal for Our Pandemic Age Report of the G20 High Level Independent Panel on Financing the Global Commons for Pandemic Preparedness and Response. By: Tharman Shanmugaratnam, Lawrence H. Summers, Ngozi Okonjo-Iweala, Ana Botin, Mohamed El-Erian, Jacob Frenkel, Rebeca Grynspan, Naoko Ishii, Michael Kremer, Kiran Mazumdar-Shaw, Luis Alberto Moreno, Lucrezia Reichlin, John-Arne Røttingen, Vera Songwe, Mark Suzman, Tidjane Thiam, Jean-Claude Trichet, Ngaire Woods, ZHU Min, Masood Ahmed,...

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Remote work, EU labour markets and wage inequality

More remote working in the wake of the pandemic could exacerbate wage inequality, with young workers, women and the low educated potentially losing out. On the eve of the COVID-19 pandemic, in March 2020, unemployment in the European Union stood at the historic low rate of 6.3%. Due to the pandemic, it then began to rise, reaching 7.7% in September 2020. While unemployment has declined somewhat since then, signalling that the EU is on the path to labour market recovery, the nature of some...

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Is Europe’s gas and electricity price surge a one-off?

Surging natural gas prices in Europe, driven by rising demand and tight supply, are pushing up electricity prices; to prevent volatility, governments need to commit more clearly to a low-carbon future. The authors gratefully acknowledge the support of Giovanni Sgaravatti for the preparation of the charts included in this blogpost. Since January 2021, natural gas prices have soared by more than 170% in Europe (Figure 1), sparking concerns about the potential macroeconomic implications. Both...

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A green fiscal pact: climate investment in times of budget consolidation

Budget consolidation in European Union countries should be possible within EU rules, but countries should agree a green fiscal pact to protect net-zero investment. This paper was prepared for the informal ECOFIN meeting in Ljubljana on 10/11 September 2021. The authors thank Klaas Lenaerts for his excellent research assistance and colleagues at Bruegel (Grégory Claeys, Maria Demertzis, André Sapir, Jean Pisani-Ferry and Simone Tagliapietra) for their feedback and suggestions. The...

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Conditions are ideal for a new climate club

The technical and political conditions are ideal for the creation of a climate club to catalyse tougher climate action worldwide. Annual global greenhouse-gas emissions have been rising steadily for decades and show no sign of peaking. That is, humankind is not making enough progress to exclude a possibly catastrophic climate scenario. Protecting the climate is difficult because of free-riding: emissions abatement costs are largely national but the benefits from climate stability are global....

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A Late Bloomer: where is China’s climate plan?

The world awaits China's concrete plan on carbon reduction, but the country is following its own pace. Check the previous editions of ZhōngHuá Mundus Sign up for the newsletter As the largest global emitter of greenhouse gases, China is key to the success of the upcoming COP26 and the global effort for climate neutrality by the mid-century. Yet two months ahead of the Glasgow convention, China has yet to present a concrete policy path to become net-zero by 2060. Why is China taking so long...

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What is behind China’s Dual Circulation Strategy?

China's dual circulation strategy should not be dismissed as a buzzword: its implementation will entail major consequences. Dual circulation may sound like a buzzword without much relevance, but it is not. It actually enshrines China’s long-standing ambition to become self-sufficient. Such an ambition was made known to the world in 2015 after the launch of China’s industrial policy masterplan, Made in China 2025, even though the world at the time was still in full engagement with China....

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EU climate plan should involve taxing pollution, not borders

Climate change and taxes may be some of the only true certainties in life. To protect ourselves better, we should make careful choices on how they interact. Read the piece published by Law360. Republishing and referencing Bruegel considers itself a public good and takes no institutional standpoint. Due to copyright agreements we ask that you kindly email request to republish opinions that have appeared in print to [email protected].

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