Bruegel

2 weeks ago | bruegel.org | Ketan Ahuja |Rim Berahab |Margherita Bianchi |Jason Bordoff

Faced with major security challenges, Europe is preparing to boost its defence capacity. To defend itself against Russia without the United States, Europe needs to rapidly increase spending from the current level of about 2 percent of GDP to an estimated 3.5 percent of GDP – an increase of about €250 billion annually (Burilkov and Wolff, 2025). In March, the European Commission proposed the ReArm Europe Plan/Readiness 2030, which seeks to mobilise €800 billion in defence spending.

4 weeks ago | bruegel.org | Niclas Poitiers |Rebecca Christie |Uri Dadush |Ignacio Garcia Bercero

President Donald Trump’s tariffs clearly pose a profound challenge to the global rules-based trading system, marking a huge shift after decades of multilateral trade liberalisation that had left tariffs at near-historic lows. The economic impact on the European Union is much less clear, however.

4 weeks ago | bruegel.org | Rebecca Christie |George Papaconstantinou |Eleni Varvitsioti |Eamon Gilmore

The Western Balkans are often seen as Europe’s periphery, but they are in fact embedded within the continent’s history and future ambitions. Despite close economic ties with the EU, these six countries—Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia—remain outside the Union, navigating a complex path toward accession.

1 month ago | bruegel.org | Ignacio Garcia Bercero |Rebecca Christie |Uri Dadush |Niclas Poitiers

After two weeks of chaos, the tariff policy of the United States under President Donald Trump appears to be converging around three elements: 1) a baseline import surcharge of 10%, with the main purpose of raising revenue; 2) protective tariffs of 25% on steel, aluminium, cars and car parts, which are likely to be extended to pharmaceuticals and semiconductors; 3) special treatment for China, although it is unclear whether the US will maintain its current prohibitive tariffs (at time of...

1 month ago | bruegel.org | Ignacio Garcia Bercero |Rebecca Christie |Uri Dadush |Niclas Poitiers

President Trump’s tariffs are an economic policy mistake of historical proportions, causing more harm to the United States than to almost all of its trading partners. Even with the pause announced on 9 April on big tariff hikes (except for China), the US tariff on the European Union remains at a very high 10%, and higher for cars, steel and aluminium. The EU has already agreed countermeasures on the US steel and aluminium tariffs and continues to weigh its options.