European countries need to raise defence expenditures on a sustained basis. Jeromin Zettelmeyer, Armin Steinbach and Guntram Wolff consider the proposed European Defence Mechanism and answer some of the burning questions about the EDM

Who will be pivotal for the success of EU defence funding?
Which countries will be pivotal for the success of EU defence funding instruments? Marco Buti and Marcello Messori say that history shows that decisions by single EU countries can determine whether member states as a whole take up new European initiatives

Deepfakes and AI
Cybercrime is in the rise and cybercriminals are getting more innovative. Michael Barr examines how Gen AI enables deepfake technology and what should be done to protect against this risk in finance

Is the international monetary system unfair?
Agnès Bénassy-Quéré considers the idea that there could be lasting reversal of exchange rates following an international currency agreement highly speculative, and argues that a multipolar system would attenuate the Triffin dilemma and provide the US with a deficit-adjustment tool

A strategic response to tariffs
The tariff policy of the United States is coming to light. Ignacio García Bercero argues that the European Union should reinforce European leadership and seek allies as part of a strategy on US tariffs, and should not get sucked into US decoupling from China

Reacting to the new reality
The European Union should form an international open trade coalition in response to Trump’s tariffs, says André Sapir. A formal commitment to open rules-based trade by the EU and likeminded countries is essential to respond to today’s dangerous new trade reality
Tax

Tariffs and digital services
EU targeting of digital services in tariff retaliation would present challenges. Bertin Martens argues that the European Union lacks an instrument to unpick crossborder transactions on US digital platforms

Upending the global trade policy landscape
The tariff measures represent a seismic shift in the global trading landscape. Simon Evenett and Johannes Fritz discuss how the US has moved away from rules-based trade governance toward a results-oriented and probably a more transactional approach

Aligning food taxation with climate goals
Agriculture contributes significantly to greenhouse gas emissions. Mattia Ricci, Ignacio Pérez Domínguez, Stijn Van Houtven, Jordan Hristov and Toon Vandyck examine how to tax agriculture as a path to greening consumption in Europe