A Bruegel policy brief on the IAA and its flaws, most of which should be fairly obvious to the economically informed tbh. Europe faces a trilemma where it wants electrification and transition to green energies, competitiveness, and economic security, when it cannot have all three. If Europe wishes for the most efficient and cost effective energy transition, cutting China out of the process is an impossibility, yet to not do so is to potentially risk serious dependencies that harm the EUs independence. At the same time to crudely ignore the rest of the world for security reasons will dramatically increase costs, hurting the overall competitiveness of European industries. In general, buy local requirements raise input costs for firms and consumers which only leaves then worse off against the global market.
1 Comment
A Bruegel policy brief on the IAA and its flaws, most of which should be fairly obvious to the economically informed tbh. Europe faces a trilemma where it wants electrification and transition to green energies, competitiveness, and economic security, when it cannot have all three. If Europe wishes for the most efficient and cost effective energy transition, cutting China out of the process is an impossibility, yet to not do so is to potentially risk serious dependencies that harm the EUs independence. At the same time to crudely ignore the rest of the world for security reasons will dramatically increase costs, hurting the overall competitiveness of European industries. In general, buy local requirements raise input costs for firms and consumers which only leaves then worse off against the global market.
!ping EUROPE