All Roads Lead to Rome
The European Macro Policy Network (EMPN) was founded in 2021. After a year and a half of communicating only virtually, we met in person for the first time last week. Together with a dozen of partner organisations we support, we gathered for a conference in Rome.
This meeting served two purposes: first, to lay the foundation for a long-lasting, productive, and, in our view, urgently needed collaboration. Second, to introduce our network to a wider public.
Our hosts were a research group led by Dario Guarascio at the Faculty of Economics at Sapienza University and the Fondazione Giacomo Brodolini (FGB), part of the EMPN network since January 2022. Dario Guarascio, Jelena Reljic, and their team spared no effort to make the meeting friendly, productive, and accessible.
The first day was dedicated to deepening our collaboration. Through intensive exchange, we got to know each other better and built trust, thus turning heterogeneity into productive cooperation.
As explained below, the EMPN aims to strengthen intra-European scientific and societal exchange. In doing so, we want to work towards making the European financial architecture even more effective for the citizens of the European Union. For such an exchange, we believe it is essential to bring together as broad a group of different organisations and countries as possible. Research groups and institutes (e.g., at wiiw Vienna, JKU Linz, TU Chemnitz, or Sapienza University of Rome), as well as think tanks (e.g., the Institute for Public Economics in The Hague or Arena Idé in Sweden), associations, and foundations (e.g., the Fondazione Giacomo Brodolini in Rome, FiscalFuture in Berlin, or Our New Economy in the Netherlands) are members of the EMPN, and so far from seven countries.
For effective exchange within this heterogeneous group, trust and personal conversations are essential. Enabling this and thus bringing the diverse approaches, focuses, and perspectives of the EMPN membership into contact with one another was the focus of the first day. This part of the meeting was reserved for EMPN members.
The second day comprised the public part of the meeting. The focus was on discussions surrounding the challenges of European macroeconomic and industrial policy, as well as on presenting the EMPN to a wider audience. With over 120 guests, twice as many attended as originally expected.
The highlight of the day was Adam Tooze’s keynote speech. Adam challenged some of the prevailing narratives surrounding European climate and industrial policy and the American Inflation Reduction Act (IRA). Regarding the IRA, he emphasised that while this was a major industrial policy step, the IRA was less coherent than it sometimes appears in European eyes. It also remained too small to secure the American contribution to compliance with the 1.5-degree limit.
With regard to Europe, Adam emphasised that, despite the prominent role of the European Emissions Trading System (we examined it in more detail here), industrial policy was also consistently pursued in Europe. However, this was not always effective, as, for example, in the case of the strengthening of the diesel engine. He also critically examined the stifling of the European solar industry after 2010, arguing that this was less due to Chinese competition than to the stifling of European investment volumes through subsidy reductions and contractionary macroeconomic policy. It was clear, at the very least after this presentation, that major and urgent tasks lie ahead.
The keynote speech was flanked by three panels. The morning began with a discussion on European industrial policy and decarbonisation. Critical and analytical presentations were given by Annamaria Simonazzi (FGB), Antonio Andreoni (SOAS), Cédric Durand (Université de Genève), and Janek Steitz, who reported on our ongoing industrial project.
Following the keynote speech and lunch, a panel on Italy’s overall economic situation followed. As a large and export-oriented economy, but one that has stagnated for years, Italy is key to understanding important problems in the European financial architecture, as our own paper on the topic emphasised. Perspectives on Italy’s economic structure, reform history, and labour market developments were presented by Valeria Cirillo (Università di Bari), Philipp Heimberger (wiiw), and Donato di Carlo (MPIfG, future LUHNIP).
The final panel linked the industrial policy and macroeconomic levels. Erik Nielsen (UniCredit), Mario Pianta (Scuola Normale Superiore di Pisa), Chiara Criscuolo (OECD), Francesca Bria (Italian National Innovation Fund), and Michele Raitano (Sapienza) discussed the need for and opportunities for reform in Europe and Italy. A key finding was that current inflation and the large fiscal packages of the recent crisis years must not obscure the fact that structural additional fiscal needs exist in Europe to manage decarbonization and secure prosperity and sovereignty. It was also noted that large parts of the public administration in Italy and Europe, with their current structure and staffing levels, are not in a position to implement the necessary spending and investment volumes quickly and effectively. These bottlenecks must be resolved urgently.