Events Policy Briefs EconPol Forum EconPol Opinions

Dear Reader, my name is Andrea Balestracci and I am the new director of EconPol Europe. It will be my pleasure to accompany you with our bimonthly newsletter and keep you informed about all our events and publications on policy issues. I will, of course, be available to answer any questions you may have. You can either reply to this email or contact me directly. In this issue, we talk about climate adaptation, global trade, and strategic raw materials, but also about structural changes in manufacturing, services, and working arrangements. Enjoy the read!

Events EconPol Annual Conference 2025: Adaptation to Climate Change (May 2025) Upcoming – Conference on EU Funding for Innovation (July 3, 2025, Brussels)

Policy Briefs The Climate Is Changing – Will We? Weatherproofing the Future Disaster Aid, Insurance, and Fairness: Household and Firm Perceptions of Flood Policy in Germany Working from Home in 2025: Five Key Facts Strategic Raw Materials in Ukraine: Opportunities for Strengthening EU Supply Chains?

EconPol Forum How Can the EU Better Adapt to Climate Change? Structural Change in German Manufacturing: Hybrid Products and Production Processes Are Changing Industrial Business Models Legislation, Regulation, and Litigation: Demand for US Legal Services in Historical Perspective Common Characteristics of Swing States in the US and Federal States in Europe How Containerization Reshaped Global Trade – And Our Cities

EconPol Opinions Can Germany Achieve Economic Growth of 2%? Trump's Fiscal Policy Is Built on Sand

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EconPol Annual Conference 2025: Adaptation to Climate Change On May 19, in Brussels, our 2025 EconPol Annual Conference on Adaptation to Climate Change took place. We would like to take this opportunity to warmly thank all speakers and participants: they made the event a great success and shed light on an often neglected, but key policy issue. The topics addressed during the conference, as well as the related policy implications, are extensively covered in our latest Policy Brief (see below).

Keynote Speech: Investing in Adaptation is No Longer an Option The European continent experiences the fastest growing temperatures globally. The degree of uncertainty about the future increases with them and threatens the very conditions of economic well-being. In his opening remarks, Kurth Vandenberghe, Director-General for Climate Action at the European Commission, made it clear: the European Union must strengthen its preparedness and resilience to climate change. And it must do so alongside the ongoing climate mitigation effort, not instead of it. → Watch the video highlights of the keynote speech here

Panel A: Building a Climate-Resilient EU European-wide data access and sharing must be enhanced to properly assess and govern climate-related risk – these were key aspects discussed in the first panel. In this, insurers and local authorities will need to play an increasingly active role, and the use of data can enable informed decision-making and make it easier to gain the support of local communities and individuals toward adaptation. Knowledge is power. → Watch the video highlights of Panel A here

Panel B: Adaptation to Climate Change in Developing Countries What barriers to adaptation are developing countries facing? What are the implications of climate change in terms of investment in agricultural and food R&D at the local and global levels? These are some of the key issues addressed by the speakers in the second panel discussion. Public contributions to agrifood R&D investment are rising sharply in countries such as India, Brazil, and China, while in Europe and developed countries the private sector is stepping up. Public finance is crucial to derisk private investment in adaptation, but subsidies must provide the right incentives to stimulate both mitigation and adaptation. → Watch the video highlights of Panel B here

Panel C: Migration as a Coping Strategy Migration as an adaptation mechanism was discussed in the third and final panel. Some common beliefs were refuted or at least partly challenged: first, climate change has not significantly driven migration – at least so far; secondly, most migratory flows in Africa take place within the continent, often from rural to urban areas within the same country. On the other hand, however, the risks associated with migration must be reduced for it to be a positive adaptation mechanism, rather than a negative one. The European institutions, through mobility programs and partnerships, can and must play a leading role in this. → Watch the video highlights of Panel C here

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Upcoming – Conference on EU Funding for Innovation July 3, 2025 | 12.30 – 15:00 ACE Events | Avenue d’Auderghem, 22, 1040 Brussels   Europe has missed the AI wave, exposing a deep-rooted, decades-long high-tech gap with the US that stems from underinvestment. The Draghi report called for a significant increase in European investment to help the continent catch up with the US. In line with this, the EU has emphasized support for innovation-driven growth. But can increased innovation funding truly close the transatlantic competitiveness divide? This question lies at the heart of a new joint report by the Institute for European Policymaking at Bocconi University and EconPol Europe. The launch event, entitled “Funding Ideas, Not Companies: Rethinking EU Innovation Policy from the Bottom Up”, will take place on 3 July in Brussels. This is the agenda: 12:30 – 13:30 Networking lunch 13:30 – 14:00 Presentation of the report Daniel Gros, Institute for European Policymaking at Bocconi University 14:00 – 14:30 Comments Marc Lemaître, Director-General for Research and Innovation Dagmar Schuller, CEO and Co-Founder, audEERING 14:30 – 15:00 Discussion and Q&A To participate, please register here.

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The Climate Is Changing – Will We? Weatherproofing the Future The proceedings of the 2025 EconPol Europe Annual Conference – and more. We have published an additional Policy Brief that outlines the main challenges related to climate change adaptation and, above all, the key policy takeaways from the conference.

Disaster Aid, Insurance, and Fairness: Household and Firm Perceptions of Flood Policy in Germany The damage caused by climate-related flood events in Europe has reached dramatic proportions and resulted in staggering costs for governments in the form of public aid. At the annual conference, it was therefore repeatedly emphasized: the private sector must do more for climate adaptation – most and foremost, by insuring against the risk of hazards. However, underinsurance is widespread in Europe today. Would a mandatory insurance scheme therefore be feasible? This survey experiment suggests that it would – at least in Germany: the German households and businesses surveyed tend to have low expectations of public aid in the event of a disaster and to support the implementation of mandatory insurance.

Working from Home in 2025: Five Key Facts Since the COVID-19 pandemic, working from home (WFH) has become part of everyday working life for many types of jobs. Based on a survey conducted in 40 countries among more than 16,000 graduates, this Policy Brief provides a snapshot of the current state of WFH and how it has evolved from 2022 to the present. In a nutshell: after a decline in the post-pandemic period, WFH has remained stable since 2023, and hybrid working arrangements are especially common among parents and sought after by women with children.

Strategic Raw Materials in Ukraine: Opportunities for Strengthening EU Supply Chains? Access to critical raw materials is a growing global priority amid geopolitical tensions and green technology demand. Ukraine holds reserves for two-thirds of the 34 materials deemed critical by the EU, including over 40% of those required for battery production. Although the EU currently faces lower supply risks for raw materials mined in Ukraine, the country's untapped resources present an opportunity for the EU. What steps are necessary for Ukraine to realize its potential, and for the EU to strengthen supply security and strategic autonomy? This Brief provides answers.

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Policy Debate of the Hour How Can the EU Better Adapt to Climate Change? Introduction to the Issue on How Can the EU Better Adapt to Climate Change? To Adapt or Not to Adapt: Costs, Benefits, and Financing of Adaptation in the EU The Climate Adaptation Trilemma Adaptation as Investment: Balancing Public and Private Roles in Climate Adaptation Climate Adaptation: Who Pays and Who Benefits? Adapting to Climate Change Across Space: Policy Recommendations for Europe Effective Climate Change Adaptation Needs Accountability Accelerating Adaptation to Extreme Weather in Europe Europe Needs to Rewire Its Energy-Green Policy Mix Voters Like Climate Policies More Than You Think

Economic Policy and its Impact Structural Change in German Manufacturing: Hybrid Products and Production Processes Are Changing Industrial Business Models In what ways are structural changes in German manufacturing reflected in economic indicators? This article highlights the shift from traditional industrial production to hybrid models, in which a larger proportion of turnover comes from product-related services and outsourced production. Furthermore, gross value added is growing faster than output, which suggests a decline in external inputs and an increase in hybrid business models.

Institutions Across the World Legislation, Regulation, and Litigation: Demand for US Legal Services in Historical Perspective Between 1970 and 1990, employment in the legal services sector in the United States grew dramatically, with lawyers' employment share nearly doubling. This coincided with a rise in lawyers' relative wages. What caused this sharp change in demand? New legislation, regulations, and fee-shifting statues were key drivers, according to the authors of this article. Common Characteristics of Swing States in the US and Federal States in Europe In the 2024 US presidential election, as in previous elections, swing states played a decisive role. But significant news events influence both polls and elections in swing states in Europe as well, extending the concept of swing states beyond the borders of the United States. This makes a comparative political analysis, carried out in this article, highly valuable.

Big Data-Based Economic Insights How Containerization Reshaped Global Trade – And Our Cities Who benefits from seaports? The question seems pointless: seaports are the backbone of global trade, handling over 80% of the world's cargo. However, ports come with significant costs for the port cities themselves – often, as this article highlights, outweighing their benefits –, with the main beneficiaries being the surrounding regions. The authors stress the importance of careful assessment of this trade-off by policymakers for the optimal development of port networks.

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Can Germany Achieve Economic Growth of 2%? Overcoming the current economic stagnation is a top priority for the current German government: Chancellor Friedrich Merz has set an ambitious target of 2% growth. Although challenging, the goal is not out of reach – according to Clemens Fuest – provided that additional spending funds are allocated to investment, that the labor supply is expanded, and, above all, that there is a willingness to reform.

Trump's Fiscal Policy Is Built on Sand The current US administration's trade policy is causing tension in global markets. Its declared objectives – to reduce the burden on the federal budget and enable income tax cuts – are based on the assumption that higher tariffs will generate higher net tax revenues. But, as Clemens Fuest points out in this piece, tariffs come with side effects that could ultimately lead to outcomes opposite to those desired.

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