Dilemmas for the EU
The EU is grappling with deficit-financing of defence expenditure and maintenance of fiscal discipline. Lucio Pench assesses the implications of the recourse to the escape clauses of the Stability and Growth Pact
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EU
Climate expenditure for survival
Carbon emissions are rising. Patrick Bolton, Alissa Kleinnijenhuis and Jeromin Zettelmeyer argue that a coalition of willing wealthy countries should provide financing for the net zero transitions of developing countries
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How DeepSeek has changed AI
There have been major developments in artificial intelligence. Bertin Martens analyses innovations in AI models over the past half year and examines the economic implications for AI companies and policymakers
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A robust strategy for a new era
The level of uncertainty is exceptionally high. Christine Lagarde says maintaining stability in a new era will be hard, and will require an ability to react as necessary
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Completing Ukraine’s reconstruction architecture
The Russia-Ukraine war may end this year and reinforces the necessity of planning Ukraine’s post-war reconstruction. Barry Eichengreen and Vladyslav Rashkovan take stock of what has been accomplished so far and what still needs to be done
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A reason for concern
Germany’s manufacturing sector has been struggling. Marco Flaccadoro argues that with high energy prices and subdued demand, challenges for Germany’s manufacturing sector – and its European partners – are set to persist
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Defending Europe without the US
Europe needs to be able to defend itself against Russia, with or without the United States. Alexandr Burilkov and Guntram Wolff argue that Europe could need 300,000 more troops and an annual defence spending hike of at least €250 billion in the short term to deter Russian aggression
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How to improve the EUs sustainable finance framework
The EU is nudging corporate behaviour to adopt rules on sustainability. Silvia Merler discusses five adjustments would make the EU sustainable finance framework more effective at delivering the desired alignment of incentives
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Europe’s challenge and opportunity
Donald Trump has launched an all-out attack on the rules-based international order. Olivier Blanchard and Jean Pisani-Ferry argue that the EU should take the lead in convening alliances of countries to counteract threats to the global order
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Making Europe stronger
EPGs are public goods which can be more effectively provided at the EU level than the national level. Kalin Anev Janse, Roel Beetsma, Marco Buti, Klaus Regling and Niels Thygesen argue that the EU’s new MFF should focus on the benefits of common spending on such public goods
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