Brazil and the EU in the Global Economy

CEPS Working Document No. 371, February 2013

17 Pages Posted: 8 Mar 2013

See all articles by Daniel Gros

Daniel Gros

Centre for European Policy Studies, Brussels; CESifo (Center for Economic Studies and Ifo Institute)

Cinzia Alcidi

CEPS; Graduate Institute of International and Development Studies (IHEID)

Alessandro Giovannini

European Central Bank (ECB) - Directorate General International and European Relations

Date Written: February 13, 2013

Abstract

The structure of the world economy has been changing quickly during the last decade. The emerging global economy is much more fragmented than in the past and characterised by different global actors, each one with specific features and roles. In this setting, both Brazil and the European Union play a role.

This paper, without pretending to provide a full analysis of the European and Brazilian economies, offers a description of their main international economic features to understand their current and future role in the global order.

Section 1 looks at the macroeconomics: it first focuses on Brazil and assesses arguments that international exchange rate misalignments represent a real grievance for Brazilian policy-makers in their struggle to get the economy onto a satisfactory trajectory. The attention is then turned to Europe, and especially to the euro area, with a focus on the still-unresolved crisis and its position vis-à-vis the rest of the world.

Section 2 analyses the place of the euro area in the international financial institution system. It assesses how far it may be both overrepresented in terms of the weight of the sum of its member states, while being underrepresented as such institutionally as a major monetary union. While this issue may be seen as relevant only for Europe, the analysis shows that it has significant implications for emerging economies, Brazil included.

The conclusions explore macro-policy options for improving the EU-Brazil partnership and suggest that a new initiative launched by them would be economically desirable.

Keywords: EU-Brazil, exchange rate misalignments, Brazil, European Union, global economy

Suggested Citation

Gros, Daniel and Alcidi, Cinzia and Giovannini, Alessandro, Brazil and the EU in the Global Economy (February 13, 2013). CEPS Working Document No. 371, February 2013, Available at SSRN: https://ssrn.com/abstract=2220136

Daniel Gros (Contact Author)

Centre for European Policy Studies, Brussels ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Cinzia Alcidi

CEPS ( email )

1 Place du Congres
Brussels, 1000
Belgium

Graduate Institute of International and Development Studies (IHEID) ( email )

132, Rue de Lausanne
Geneva, 1211
Switzerland

Alessandro Giovannini

European Central Bank (ECB) - Directorate General International and European Relations ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany

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