The Western Balkans on the road to the European Union. Bruegel Policy Contribution Issue n˚04 | February 2018

Given its geographical location, the region is important to the EU in terms of security, stability, trade and transit routes. The Western Balkan countries’ economic and political prospects and their future within a European framework should remain one of the top priorities for the EU

Assessing the European Union’s North Africa trade agreements. Bruegel Policy Contribution Issue n˚22 | November 2018

In this Policy Contribution, the authors provide an economic assessment of the trade agreements between the EU and North Africa. They argue that the common view of the agreements is overly negative, and point to policy conclusions that could increase regional integration

The macroeconomic implications of healthcare. Bruegel Policy Contribution Issue n˚11 | August 2018

Health-care systems play a crucial role in supporting human health. They also have major macroeconomic implications, an aspect that is not always properly acknowledged. Countries spend very different amounts on healthcare, with spending in North America (Canada and the United States) more than twice as much per capita as in the European Union on average, and there are significant differences between EU countries too. Various explanatory factors such as income levels, population age structures and epidemiological profiles cannot explain the differences between countries. Decisions on the optimal level of spending should also consider various others factor, including the macroeconomic implications of health-care systems. Whatever amount is spent on health care, it should be spent efficiently, in order not to waste resources and to improve the macroeconomic impacts. We demonstrate that there are threshold effects whereby certain quantitative indicators of health tend to improve with increased spending only up to certain amount of spending, but not further. Using a standard method to measure efficiency, data envelopment analysis (DEA), we find significant differences between countries, suggesting that not all countries use existing technologies and best practices to their full potential. This finding calls for policy responses. Health-care systems matter for the macroeconomy because of their large size in output, employment and research. They also have direct fiscal implications in terms of the long-term sustainability of public finances, while health-care spending decisions influence short-term economic development through the fiscal multiplier effect, which is substantial. Most southern European countries cut health-care spending aggressively in recent years, likely amplifying the depth of their recessions and possibly causing hysteresis effects from long-term unemployment and reduced productivity. Fiscal consolidation strategies should aim to preserve spending items that have large fiscal multipliers, including health-care expenditures. Health-care systems also influence labour force participation, productivity and human capital formation through various channels, and thereby have an influence on overall macroeconomic outcomes. They also play an important role in inequality, and we find that inequality of access to health care is particularly high in about one-third of EU countries, which calls for policy responses. It is essential that discussions of health systems consider both the opportunity cost and the economic value of investing in health. Such an approach can help policymakers resist the temptation to default to the potentially inefficient status quo

Towards EU-MENA shared prosperity. Bruegel Policy Report, 3rd ed. February 2019

The trade agreements that the European Union has with North African countries – with Algeria, Egypt, Morocco and Tunisia – are often seen as having delivered disappointing results since they came into force during the 2000s. The four North African countries have seen insufficient growth in their exports to the EU, and have undergone only limited diversification. In the meantime, the EU’s exports to North Africa have grown quite rapidly

The Western Balkans: Weak performance since the crisis

In the early and mid-2000s, the prospect of EU accession and the global boom facilitated rapid economic recovery and boosted economic and institutional reforms in the Western Balkan region. The global financial crisis of 2007–2009 and the European crisis of 2010–2013 slowed the pace of economic growth and amplified high unemployment in the region. In addition, various unresolved legacies from past conflicts slowed the pace of reform and progress towards EU accession. The European Commission’s February 2018 communication sets an indicative deadline (2025) for the two most advanced candidates – Serbia’s and Montenegro’s admission to the EU. This could incentivise all Western Balkan countries, including those candidates that have not yet started membership negotiations (Macedonia and Albania) and those waiting for candidate status (Bosnia and Herzegovina and Kosovo), to remove domestic political obstacles to EU accession, solve conflicts with neighbours, speed up reforms and accelerate economic growth