The Global Economy in 2030: Trends and Strategies for Europe. CEPS Paperback, 2 April 2014

This groundbreaking study concentrates on a set of critical economic factors that will shape future economic growth at the global level and offers a description of the possible evolution of their reach and scope. Our goal in pursuing this research is not to make precise predictions about growth rates or the size of individual economies, but to provide a guide for EU policy-makers by presenting an assessment of the possible implications of such trends for the global economy and the policy challenges they raise for Europe. In an attempt to respond to this need, this study concentrates on a set of critical economic factors that will shape future economic growth at the global level and offers a description of the possible evolution of their reach and scope, which often go beyond the purely economic dimension. Our ultimate goal is to provide a guide for policy-makers by presenting an assessment of the possible implications of such trends for the global economy and the policy challenges they raise for Europe.

Manufacturing Europe's Future. Bruegel Blueprint 21, 2 October 2013

‘Industrial policy is back!’ This is the message given in the European Commission’s October 2012 communication on industrial policy (COM (2012) 582 final), which seeks to reverse the declining role of the manufacturing industry, and increase its share of European Union GDP from about 16 percent currently to above 20 percent. Historical evidence suggests that the goal is unlikely to be achieved. Manufacturing’s share of GDP has decreased around the world over the last 30 years. Paradoxically, this relative decline has been a reflection of manufacturing’s strength. Higher productivity growth in manufacturing than in the economy overall resulted in relative decline. A strategy to reverse this trend and move to an industrial share of above 20 percent might therefore risk undermining the original strength of industry – higher productivity growth. This Blueprint therefore takes a different approach. It starts by looking in depth into the manufacturing sector and how it is developing. It emphasises the extent to which European industry has become integrated with other parts of the economy, in particular with the increasingly specialised services sector, and how both sectors depend on each other. It convincingly argues that industrial activity is increasingly spread through global value chains. As a result, employment in the sector has increasingly become highly skilled, while those parts of production for which high skill levels are not needed have been shifted to regions with lower labour costs.

Migration and asylum: The movement of people in the Mediterranean Region - Future scenarios and the EU response. Jean Monnet Occasional Paper No. 11/2014

Introduction. In recent years, the global discussion on migration and asylum has evolved from polarization of perspectives and mistrust, to improving partnerships and fostering cooperation between countries and regions. The paradigm has shifted from control and security exclusively to an increased awareness of the ramifications of migration in development and labour markets, the increasing demographic gap1 and the dangers of exclusion faced by migrant workers (regular or irregular). Eastern Europe will suffer the biggest population decline in the coming years, and Nigeria’s population will reach one billion by 2100. In Europe, the work replacement ratio will be two pensioners for one active worker. It has become clear that these facts cannot be ignored and that there is a need for greater convergence of policies (migration/mobility, fundamental rights, and economic growth), with a migrant-centred approach.2. The assumption that Europe will remain a geopolitical and economic hub that attracts immigrants at all skill levels might not hold water in the long run. The evolving demographic and economic changes have made it evident that the competitiveness of the EU (Europe 2020 Strategy) is also at stake, particularly if an adaptable workforce with the necessary skills is not secured in view of shortfalls in skill levels and because of serious labour mismatches. Therefore, it is the right moment to develop more strategic and long-term migration policies that take into account the evolving position of Europe and its neighbours in the world. By the same token, labour market strategies that meet needs and promote integration of regular migrants are still a pending task for the Member States (MS) in terms of the free movement of people, but also in relation with neighbouring and partner countries.

The growth challenge for Europe and the EMU. CHALLENGE EUROPE Issue 22- Challenges and new beginnings: Priorities for the EU's new leadership, September 2014.

The European economy is slowly and painfully striving to reemerge from the last six years of crisis. It was a crisis of enormous intensity and contagiousness, given the unprecedented depth of global financial integration combined with the systemic flaws in the EMU architecture. And it is not over, as the high levels of unemployment and the growing divergence between Member States testify. The threat of fragmentation is imminent as ever: fragmentation between euro-ins and euro-outs; fragmentation between North and South; fragmentation within societies, with increasing income inequality and a growing number of, what used to be, the middle class population slipping through the social safety net and below poverty lines. Policies of front-loaded fiscal consolidation have left welfare states in economically weaker countries severely underfunded. According to OECD data, the number of people living in households without any income from work has doubled in Greece, Ireland and Spain, and has risen by 20% or more in Estonia, Italy, Latvia, Portugal, and Slovenia. Fertility rates have dropped further since the crisis, deepening the demographic and fiscal challenges of ageing. There are long-term implications from these deteriorating trends, regarding people's long-term health, education and upward mobility from low-income families. It is also highly likely that many of the people unemployed for a long period of time will never again be able to gain proper access to the job market and build a normal career track. The enduring effects of the crisis risk creating vicious cycles of low growth, high debt levels, austerity, declining productivity, and stagnation. These developments carry heavy implications for the future growth prospects of the European economies, for future prosperity, and for the sustainability of pension systems and welfare states. They must be urgently reversed.

The Financial Crisis and the Future of the Eurozone. Bruges European Economic Policy (BEEP) Briefing 21/2010

The government debt crisis, erupted in the Eurozone in 2009, nearly led to the collapse of European monetary union. Now that this has been averted, the question is what should be done to make the Eurozone sustainable in the long run. The survival of the Eurozone hinges on the capacity of its leaders to improve the eurozone's governance. With the exception of Greece, the root cause of the government debt crisis has little to do with the poor performance of the SGP, rather, with unsustainable debt accumulation by private actors. Also, the method of convergence implicit in the SGP has not worked well – macroeconomic divergences have stubbornly remained for nearly a decade and several countries experienced boom and bust dynamics. Although strong declines in real interest rates may explain part of the story (but e.g. Italy did not experience boom & bust), self-fulfilling waves of optimism and pessimism which might be called 'animal spirits' and are of mainly national origin, seem a good candidate for explanation. These national animal spirits endogenously trigger credit expansion and contraction. It follows that (national) movements of credit ought to be under much firmer control and this is up to the monetary authorities, including the ECB. Critical recommendations for better governance of the Eurozone should therefore combine credible measures to maintain fiscal discipline over the medium term with such instruments as minimum reserve requirements to control the growth of bank credit as well as minimum reserve requirements in different national banking systems. Finally, the idea of adding more sanctions to the SGP may be ill-conceived since, in future, it might pre-empt national governments to come to the rescue of banks (under credible threats of contagion) and/or prevent a downward spiral in economic activity.

Determinants of Growth and Inflation in Southern Mediterranean Countries. MEDPRO Technical Report No. 10/March 2012

Despite significant economic reforms in many Southern Mediterranean EU neighbour countries, their growth performance has on average been subdued. This study analyses the differences in growth performance and macroeconomic stability across Mediterranean countries, to draw lessons for the future. The main findings are that Southern Mediterranean countries should benefit from closer ties with the EU that result in higher levels of trade and FDI inflows, once the turbulence of the ‘Arab Spring’ is resolved, and from the development of financial markets and infrastructure. They will also benefit in keeping inflation under control, which will depend in great part on their ability to maintain fiscal discipline and sustainable current accounts. One of the main challenges for the region will be to implement structural reforms that can help them absorb a large pool of unemployed without creating upward risks to inflation.