Europe´s Competitiveness and the Rise of China

Past meetings dealt with topics such as international trade or the future of the Euro. EconPol Europe is a network for economic and fiscal policy research of 14 policy-oriented university and non-university research institutes across 12 countries. The network was founded in 2017 by the Ifo Institute along with eight renowned European research Institutes. IHS has been a founding member of the network and will be represented at this year’s conference by Klaus Weyerstrass and Susanne Forstner. For Weyerstrass EconPol Europe plays an important role in discussing economic policy topics that are highly relevant for the future of the Euro Area in particular and the EU in general.

The event kicks off with a Parliamentary Breakfast that has current account imbalances on its agenda. While the trade dispute between the governments of the US and China naturally focuses on the trade balance between these two economies, the breakfast discussion will examine the development of the current account balance between China and the Euro Area.  During the event, Weyerstrass will give an impulse lecture on the development and possible determinants of the current account balance between China and the Euro Area. The talk ends with policy implications, setting the stage for the subsequent discussion.

In the early afternoon the main conference will then kick off with a keynote by Carlos San Basilio from the Spanish Ministry of Economy and Business, who will talk about the future agenda for Europe´s Competitiveness. After that, an introductory keynote by Daniel Gros (Director, CEPS & EconPol Europe) will deal with the EU and China, followed by a panel discussion.

In addition to the Parliamentary Breakfast, Weyerstrass will talk about the account development between the Euro area and China at a session on November 8^th. He describes the current situation as follows: “The current account between China and the Euro Area is more or less balanced, notwithstanding differences between the member states. Therefore, there is no need for policy action to tackle any imbalances. However, it is important to a have a level playing field when it comes to issues such as technology transfer or market access”. In a different session, Susanne Forstner will talk about the costs and benefits of progressive income taxes. She describes her findings as follows: “We reconsider the classic tradeoff of progressive taxation – namely that between providing insurance but, at the same time, distorting incentives – in a realistic context of the labor market where workers face job search frictions and firms face information frictions when providing work incentives to their employees. We can show that those two frictions interact, and that evaluations of income tax reforms may be misleading if these interactions are not taken into account.” For both scientists the conference is a great opportunity to deliver evidence based policy advice and to contribute scientific expertise to the discussion of the future design of the EU.