Economic & Fiscal Policy

The European Union faces several simultaneous threats to its competitiveness: weakness in the industries of the future, insufficient innovation, expensive energy, the need to green its economy, and geopolitical and trade shifts, to name but a few. The EconPol Europe Annual Conference, on whose proceedings this policy brief is based, focused on three aspects that could make a substantial contribution to securing prosperity in the EU, but are in a lamentable state: they all currently fall far short of their potential. These are the power of the single market, the level of its innovation, and the capacity to defend itself. Both the high-level speakers at the conference as well as EconPol and ifo research make clear that some low-hanging fruit are there for the taking, if only the political will were there, a good dose of national chauvinism could be overcome, and an effective communication campaign were undertaken to explain to voters why some measures are not only necessary, but unavoidable. 

Governments around the world are increasingly turning to nudges to improve tax collection. Simple reminders, tax morale and disincentives significantly improve tax compliance.

The downfall of Credit Suisse should serve as a lesson that supervisory board competence determines the long-term risk of a bank. In Germany, this idea is also enshrined in law. But this study of German banks shows, there is still a long way to go.

The banking turmoil of 2023 had only a limited impact on banks in the Eurozone and the EU. Nevertheless, important lessons can be learned from this crisis: effective regulation and supervision is a moving target that must adapt to changing circumstances and banks' business models.