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Year end is always the time for lists. There were hopes 2021 would be a year of recovery and emergence from the pandemic, but unfortunately this does not seem to be the case just yet. This year has also been marked by many other developments including rising geopolitical rivalry between the United States and China, new work practices becoming more entrenched, energy price hikes and inflation, and efforts at COP26 to overcome barriers to tackling the climate emergency.

Bruegel has observed and analysed these trends. We’ve selected one chart for each month of 2021 from the ‘chart of the week’ series in , �����ܱ𲵱��’s weekly newsletter. These tell some of the economic stories Bruegel scholars have researched and written about this year: snapshots of how the year evolved, and indications of what might come in 2022.

1. Vaccinations campaigns get underway

From:

The first approvals of COVID-19 vaccinations at the end of 2020 marked the start of ‘’. In comparison with Israel, the United Kingdom and the United States, vaccination in the EU got off to a slow start. The European Commission, responsible for vaccine procurement, was criticised for being slow to sign contracts and ensure enough manufacturing capacity and doses. Niclas Poitiers provided regular of the state of vaccination in the EU. Ultimately, the EU campaign met its targets and western EU countries are now among the . The debate has since moved on to , , booster jabs and worldwide vaccine inequity, creating the conditions for new variants of the virus.

Read, Listen, Watch

• Marcus, J.S. (2021) ‘’ Bruegel Blog, 6 January.
• Dadush, U. (2021) ‘’, Bruegel Blog, 13 January.
• Jeanrenaud, L., M. Mariniello and G. Wolff (2021) ‘’ Bruegel Blog, 20 January.
• Guetta-Jeanrenaud, L. and M. Mariniello (2021) ‘’, Bruegel Blog, 4 March.
• Marcus, J. Scott and N. Poitiers (2021) ‘’, Bruegel Blog, 17 March.
•  The Sound of Economics, 20 January.
• Leigh, M. (2021) ‘’ Bruegel Blog, 27 April.
• , The Sound of Economics, 17 November.

2. Business support measures

From:

EU governments sought to offset the economic impact of COVID-19 lockdowns through a host of initiatives, including bank loan guarantees, particularly for smaller companies (SMEs). In February, Julia Anderson, Francesco Papadia and Nicolas Véron looked in detail at , in France, Germany, Italy, Spain and the United Kingdom.

By the end of the year, the effectiveness of support given to firms could be evaluated. Carlo Altomonte, Maria Demertzis, Lionel Fontagné and Stefen Mueller showing that government support during the COVID-19 crisis protected employment. However, the evidence is varied on how efficiently this was done in terms of helping viable firms, rather than those that could have been expected to fold anyway. As the pandemic continues, uncertainty remains about the scarring effects of the crisis; the long-term implications of support measures are only partially understood.

Read, Listen, Watch

•  The Sound of Economics, 17 February.
• Anderson, J., F. Papadia and N. Véron (2021) , Working Paper 03/2021, Bruegel
• , Bruegel Event, 18 March.
•  The Sound of Economics, 30 June.
• ”, Bruegel Dataset, last update 23 September 2021.
• Altomonte, C., M. Demertzis, L. Fontagné and S. Mueller (2021) ‘’ Policy Contribution 21/2021, Bruegel.
• , Bruegel Event, 9 November.
• , Bruegel Dataset, last update 24 November 2021.

3. Watching inflation

From: Updated chart from - HICP has been extended to November 2021.

Rising prices and the threat this poses to the recovery have divided policymakers. Maria Demertzis highlighted the in the face of inflation and variants of COVID-19. As early as March 2021, Grégory Claeys and Lionel Guetta-Jeanrenaud highlighted how the pandemic complicates . Zsolt Darvas and Catarina Martins explained why should be included in the inflation indicator, to accurately reflect rising costs faced by homeowners.

As inflation rises across Europe, , , assessed future prospects in a context of continued fiscal support and recovering economies. Marek Dabrowski also assessed the need to monetary easing and support in the exit from the pandemic.

Read, Listen, Watch

• Demertzis, M. (2021) ‘’, Bruegel Blog, 17 February
• Claeys, G. and L. Guetta-Jeanrenaud (2021) ‘’ Bruegel Blog, 24 March.
• , Bruegel Event, 13 April.
• Wolff, G. (2021) ‘’, Bruegel Blog, 9 June.
• Claeys, G. and L. Guetta-Jeanrenaud (2021) ‘’ Bruegel Blog, 7 July.
• Grzegorczyk, M., F. Papadia, and P. Weil (2021) ‘’, Bruegel Blog, 2 November.
• Darvas, Z. and C. Martins (2021) ‘’, Bruegel Blog, 18 November.
• Dabrowski, M. (2021) ‘’, Bruegel Blog, 27 September.
• Dabrowski, M. (2021) ‘’, Bruegel Blog, 18 November.

4. Mapping Europe’s recovery plans

From:

The Next Generation EU programme has changed the way the EU finances itself, interacts with financial markets and supports national recoveries. In late April, countries began submitting their recovery and resilience plans. An by Zsolt Darvas and Simone Tagliapietra showed that the plans of the four largest EU countries, France, Germany, Italy and Spain, reflect rather different priorities, even if all met the EU recovery fund’s minimum expenditure benchmarks for climate and digitalisation. Bruegel scholars monitored the national plans as they were submitted, providing a and further analysis throughout the year. Below is the most up to date assessment of the plans, based on submissions by EU countries.

From: Bruegel Dataset (2021), , last update 1 December 2021

In November, Rebecca Christie, Gregory Claeys and Pauline Weil and decisions taken in terms of European Commission market operations. They also outlined the risks and opportunities linked to this upgrading of EU borrowing. The implementation of recovery plans and their coordination at EU level will continue to be a focus of Bruegel analysis in 2022.

Read, Listen, Watch

• Darvas Z. and G. Wolff (2021), ‘’, Bruegel Blog, 4 March.
• Darvas, Z. (2021) ‘’, Policy Contribution 03/2021, Bruegel.
• Darvas, Z. and S. Tagliapietra (2021) ‘’, Bruegel Blog, 29 April.
• Darvas, Z., J. Scott and A. Tzaras (2021) ’ Bruegel Blog, 20 July.
• , The Sound of Economics, 1 September.
• , The Sound of Economics, 20 October.
• Christie, R., G. Claeys and P. Weil (2021) ‘’ Policy Contribution 22/2021, Bruegel
• , Bruegel Dataset, last update 1 December.

5. Banking and finance

From:

In early 2021, Maria Demertzis, Marta Domínguez-Jiménez and Lionel Guetta-Jeanrenaud highlighted the importance of the for financial stability and for financing high-tech sectors. In September, Dirk Schoenmaker laid out why companies and businesses should start to make investment decisions based on , weighing up the environmental and social impacts alongside the financial returns. Alexander Lehmann outlined needed by investors for investment decisions. Rebecca Christie showed how might fill a gap in European equity markets.

Read, Listen, Watch

• Lehmann, A. (2021) ‘’, Bruegel Blog, 24 March
• Anderson, J., D. Bholat, M. Gharbawi and O. Thew (2021) ‘’, Bruegel Blog, 15 April
• Lehmann, A. (2021) ‘’, Bruegel Blog, 28 April
• Lehmann, A. (2021) ‘’, Bruegel Blog, 1 June
• Demertzis, M., M. Domínguez-Jiménez and L. Guetta-Jeanrenaud (2021) ‘’, Policy Contribution 13/2021, Bruegel
• Lehmann, A. (2021) ‘’ Bruegel Blog, 6 July

6. Teleworking here to stay

From:

COVID-19 has accelerated the transformation of work models. In 2020, teleworking in EU countries has surged, and many workers have proved that they can remote work efficiently. Monika Grzegorczyk, Mario Mariniello, Laura Nurski and Tom Schraepen proposed that the EU should develop . However, the pandemic has also deepened inequalities in the workforce. Maria Demertzis and Mia Hoffmann found that COVID-19 has both professionally and at home; Georgios Petropoulos and Tom Schraepen discovered that remote working could . In the gig economy, could also be harmed, Mario Mariniello thus called for the European Union to .

�����ܱ𲵱��’s is a three-year research project to analyse the impact of technology on the nature, quantity and quality of work, welfare systems and inclusive growth at large. In the pandemic context, the project explores how technology is changing the nature of employment with new forms of work organisation, and how to balance power and reduce discrimination in the labour market.

Read, Listen, Watch

• ‘’, Bruegel event, 24 February.
• Nikolova, M. (2021) ‘’ Bruegel Blog, 4 March.
• ‘’, Bruegel event, 25 May
• Grzegorczyk, M., M. Mariniello, L. Nurski and T. Schraepen (2021) ‘’, Policy Contribution 14/2021, Bruegel.
• Nurski, L. (2021) ‘’, Bruegel Blog, 5 July.
• ‘’, Bruegel event, 2 September
• Petropoulos, G. and T.Schraepen (2021) ‘’, Bruegel Blog, 14 September.
• Mariniello, M. (2021) ‘’, Opinion, 23 September.
• Petropoulos, G. (2021) ‘’, Bruegel Blog, 11 October.
• ‘’, Bruegel event, 19 October.
• Demertzis, M. and M. Hoffmann (2021) ‘’, Bruegel Blog, 3 November.
• Mariniello, M. (2021) ‘’, Opinion, 7 December.
• ‘’, Bruegel event, 7 December.

7. Climate emergency

From:

In July 2021, the European Union proposed a plan to turn its climate pledges into reality. The package is intended to ensure the EU reduces its greenhouse gas emissions by 55% by 2030 compared to 1990, and reaches net-zero by 2050. Simone Tagliapietra analysed the , which came ahead of in November. Some of the most ambitious measures, including a carbon border adjustment mechanism and an expansion of the EU’s emissions trading scheme, will be felt both inside and outside the bloc. Simone Tagliapietra, Jean-Pisani Ferry and Guntram Wolff highlighted the of the European Green Deal. Ben McWilliams and Georg Zachmann put forward proposals .

Read, Listen, Watch

• , The Sound of Economics, 13 January
• l, Bruegel Event, 3 February
• , The Sound of Economics, 3 February
• McWilliams, B. and S. Tagliapietra (2021) ‘’, Bruegel Blog, 11 February
• , Bruegel Event, 17 February
• Leonard, M., J.Pisani-Ferry, J. Shapiro, S. Tagliapietra and G. Wolff (2021) ‘’, Policy Contribution 04/2021, Bruegel
• Demertzis M. and S. Tagliapietra, (2021) ‘’ Bruegel Blog, 4 March
• Edenhofer, O., M.Kosch, M. Pahle and G. Zachmann (2021) ‘e’, Policy Contribution 06/2021, Bruegel
• McWilliams, B. and G. Zachmann (2021) ‘’, Policy Contribution 08/2021, Bruegel
• Tagliapietra, S. (2021) ‘’, Bruegel Blog, 14 July
• , The Sound of Economics, 15 July
• Sapir, A. (2021)’, Bruegel Blog, 19 July
• García Herrero, A., S. Tagliapietra and V. Vorsatz (2021) ‘’, Bruegel Blog, 30 August
• , The Sound of Economics, 8 September
• , Bruegel Event, 2 September
• Lenaerts, K. and S. Tagliapietra (2021) ‘’, Bruegel Blog, 18 November
• , The Sound of Economics Live, 28 October
• , The Sound of Economics Live, 25 November
• , Bruegel Event, 2 December

8. China as seen from Europe

From:

is �����ܱ𲵱��’s monthly newsletter exploring China's global role and its impact on Europe.

China’s economic success cannot be understood without understanding the dynamism of its private sector. The share of assets held by privately-owned enterprises in China has ballooned in recent years, although state-owned enterprises are still in the dominant position. Alicia García-Herrero and Giuseppe Porcaro discussed at a time when the country’s growth rate is waning. They also discussed how the , an and , and the will affect the private sector. �����ܱ𲵱��’s Nicolas Véron is working on a study of ownership structures of China’s largest companies, evaluating whether the government’s policies in favour of state-owned enterprises have hindered the advancement of the private sector.

Bruegel scholars will continue in 2022 to monitor China’s economic affairs. ZhongHua Mondus in discussed .

Read, Listen, Watch

• ‘’, The Sound of Economics,3 March
• García-Herrero, A. and G. Ng (2021) ‘'’, Policy Contribution 05/2021, Bruegel
• ‘’, The Sound of Economics, 14 April
• ‘’, Bruegel event, 28 April
• García Herrero, A. and J. Xu (2021) ‘’, Bruegel Blog, 04 May
• ‘’, The Sound of Economics, 12 May
• Dadush, U. and P. Weil (2021) ‘ ‘, Policy Contribution 12/2021, Bruegel
• ‘’, The Sound of Economics, 9 June
• ‘’, The Sound of Economics, 7 July
• ‘’, Bruegel event, 3 September
• ‘’, The Sound of Economics, 8 September
• ‘’, The Sound of Economics, 13 October
• ‘’, The Sound of Economics, 10 November
• ‘’, Bruegel event, 1 December
• ‘’, The Sound of Economics, 8 December

9. Energy prices surge

From:

Natural gas prices have soared in Europe, sparking concerns about households’ monthly bills and the potential macroeconomic implications. This chart published in September showed that prices started to spike at the beginning of 2021. While trying to answer , Simone Tagliapietra and Georg Zachmann proposed support measures European governments should offer; later in the year with the arrival of the winter, rising energy prices became even more concerning. Ben McWilliams and Georg Zachmann put forward proposals . A Bruegel tracks and gives an overview of the different policies implemented by EU countries at national level to mitigate for consumers the effects of higher energy prices.

Read, Listen, Watch

• Leonard, M., J.Pisani-Ferry, J. Shapiro, S. Tagliapietra and G. Wolff (2021) ‘’, Policy Contribution 04/2021, Bruegel
• ‘’, The Sound of Economics, 3 February
• McWilliams, B. and G. Zachmann (2021) ‘’, Bruegel Blog, 19 July
• Tagliapietra, S. and G. Zachmann (2021) ‘’, Bruegel Blog, 13 September
• ‘’, The Sound of Economics, 23 September
• Sgaravatti, G., S. Tagliapietra and G. Zachmann (2021) ‘’, Bruegel Blog, 29 November
• ‘’, Bruegel dataset, Last update 29 November
• ‘’, Bruegel dataset, Last update 2 December
• ‘’, Bruegel dataset, Last update 10 December
• McWilliams, B., G. Sgaravatti and G. Zachmann (2021) ‘’, Bruegel Blog, 21 December

10. Do we need to ditch growth?

From:

We probably can’t have it all. The cost of reaching net zero isn’t known for sure but the cost of doing nothing will be higher. Amid the published ahead of COP26, Klaas Lenaerts, Simone Tagliapietra and Guntram Wolff looked into both and whether the should be ditched. Fossil fuels still account for around 80% of the global energy mix and economic growth so far has tended to go hand in hand with higher greenhouse gas emissions, leaving questions about the compatibility of growth and decarbonisation. Overall, the three authors highlighted that the cost of the transition will have significant macroeconomic implications and degrowth proposals are not viable, so the focus must be on decoupling economic growth and emissions.

Read, Listen, Watch

• , Bruegel Event, 3 March
• Lenaerts, K., S. Tagliapietra and G.B. Wolff (2021) ‘’, Bruegel Blog, 25 August
• Darvas, Z. and G. Wolff (2021) ‘’, Policy Contribution 18/2021, Bruegel
• , The Sound of Economics, 29 September
• Lenaerts, K., S. Tagliapietra and G.B. Wolff (2021) ‘’, Working Paper 10/2021, Bruegel
• , Bruegel Event, 5 October
• , Bruegel Event, 28 October

11. New tech in the workplace

From:

Artificial intelligence could unlock the next productivity boom. To realise these gains, AI technologies need to be adopted by companies and integrated into their operations. According to Eurostat, one in ten EU companies uses biometric authentication and verification in the workplace, with use rates ranging from as high as 24% in Malta to 4% in Slovenia and Bulgaria. While acknowledging the huge potential, it is necessary to evaluate the risks of putting AI in the workplace, including possible personal data abuse or potential psychological distress caused by permanent monitoring. As part of �����ܱ𲵱��’s , Mario Mariniello and Mia Hoffmann proposed a to underpin the use of AI-powered biometric technologies in the workplace. Meanwhile, Laura Nurski and Mia Hoffmann looked into why other parts of the world, and Rebecca Christie discussed the idea of a ‘ as a source of government revenue when automated systems replace human capital.

Read, Listen, Watch

• Nurski, L. (2021) ‘’, Bruegel Blog, 6 May
• ‘’, Bruegel event, 25 May
• ‘’, The Sound of Economics, 23 June
• Hoffmann, M. and L. Nurski ‘’, Bruegel Blog, 30 June 2021
• ‘’, The Sound of Economics, 20 July
• Christie, R. (2021) ‘’, Policy Contribution 20/2021, Bruegel
• ‘’, The Sound of Economics, 6 October
• Wang, J., G. Petropoulos, and S. Steffen (2021) ‘’, Bruegel Blog, 21 October
• Hoffmann, M. and M. Mariniello (2021) ‘’, Policy Contribution 23/2021, Bruegel
• ‘’, The Sound of Economics, 24 November
• Hoffmann, M. and L. Nurski (2021) ‘’ Policy Contribution 24/2021, Bruegel
• Hoffmann, M. and L. Nurski (2021) ‘’, Bruegel Blog, 6 December
• ‘ ’, Bruegel event, 7 December

12. The continuous rebranding of EU foreign policy instruments

From:

The EU’s Global Gateway initiative will seek to mobilise €300 billion in infrastructure spending worldwide, as an implicit response to China’s Belt and Road Initiative. Simone Tagliapietra which, despite lacking new cash and relying on crowding-in of private investment, uses funds strategically in specific ‘values based’ and ethical ways. Bruegel has covered the European Union’s increasing assertiveness towards neighbours over the past year, including the external , managing a at its borders, building a with a former member, strengthening the and tackling a .

Read, Listen, Watch

• Sapir, A. (2021) , Bruegel Blog, 12 January
• Leonard, M., J.Pisani-Ferry, J. Shapiro, S. Tagliapietra and G. Wolff (2021) ‘’, Policy Contribution 04/2021, Bruegel
• l, Bruegel Event, 3 February
• , Bruegel Event, 4 February
• y The Sound of Economics, 19 May
• The Sound of Economics, 1 June
• Sapir, A. (2021)’, Bruegel Blog, 19 July
• , Bruegel Event, 1 September
• , Bruegel Event, 2 September
• Demertzis, M. (2021) ‘’ Bruegel, 13 October
• , The Sound of Economics, 3 November
• Tagliapietra, S. (2021) ‘’, Bruegel Blog, 7 December