Stimulating Growth Who? How

Delve into the strategic challenges faced in stimulating economic growth, including responses to inflation, competition from China, strategic autonomy implications, Europe's technology deficit, aging economy dynamics, and the role of the state in enabling growth. Explore calls for EU public investment, industrial policies, and concluding thoughts on policy ideologies and burden-sharing complexities in advancing economic growth.

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• Economic growth
• Strategic challenges
• Iain Begg
• European Institute
• State role

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Uploaded on May 15, 2024 | 0 Views

Presentation Transcript

1. STIMULATING GROWTH WHO? HOW? Iain Begg European Institute London School of Economics and Political Science @IainBeggLSE

2. THE STRATEGIC CHALLENGES Responding to the (oddly named) Inflation Reduction Act (IRA) Also, to the competitive strength of China and emerging Asia Making sense of strategic autonomy Does it imply protectionism? Europe s deficit in many new technologies Though hopes for AI and bio-tech High energy costs and their competitive impact Growth in an ageing, service dominated economy Is innovation inhibited?

3. WHAT ROLE FOR THE STATE? ENABLER OR OBSTACLE? STRATEGIC INVESTMENTS REGULATORY MIX TAX FOSTERING GROWTH AND COMPETITIVE ADVANTAGE INFRASTRUCTURE STATE AIDS MONETARY CONDITIONS POLITICAL STABILITY SKILLS FORMATION

4. CALLS FOR EU PUBLIC INVESTMENT Evident tensions THE DIFFICULT POLITICS OF CROSS-BORDER TRANSFERS LOANS OR GRANTS? STRICT CONDI- TIONALITY? CONSTRAINED FISCAL CAPACITY OF MANY MEMBER STATES MORAL HAZARD WORRIES OF NET CONTRIBUTORS CASE FOR EU FUNDING NATURE OF EU PUBLIC GOODS BEYOND GREEN AND DIGITAL

5. INDUSTRIAL STRATEGYOR POLICY? Policy strategy Decarbonisation Energy substitution and on-shoring of production: challenges of higher costs Supply chain simplification The single market as an underlying motor of growth or not Policy interventions Adequacy of fiscal allocations The green deal Related focus of RRF projects Is STEP enough of a step forward, or mainly repackaging?

6. CONCLUDING COMMENTS Ideological bases of policies Ordo-liberal or interventionist? Political economy considerations Burden-sharing tricky Battery contests; Limited fiscal capacity at EU level: is it well used or squandered? National level capacities highly uneven Delicate balance between competition aims and state aids How to assure political and institutional buy-in

7. Economic growth cannot occur without some degree of mass frivolity. German philosopher Peter Sloterdijk