I am so happy to announce that I won an ERC Consolidator Grant for my project on the impact of geopolitics on international capital flows across 200 years. Huge thanks to all those who have supported me along the way
@ERC_Research
📢 New update of our Ukraine Support Tracker. The big news: Europe overtakes the US by a large margin (total EU now 2x US). If we add UK, NOR, CH, then US commitments are only 45% of Europe’s (€70 bn vs €156 bn). This is a major shift compared to first year of war. A thread 1/7
📢New paper on China's role in global finance and the difficulties of the Belt and Road. Sebastian Horn,
@carmenmreinhart
, Brad Parks and I show that China has created a new global system of rescue lending to countries in debt distress (large bailouts) 👇This is what we find, a🧵
Which countries help Ukraine and how? For answers, my coauthors and I
@kielinstitute
created the Ukraine Support Tracker. The paper and data just went online . Spoiler: The US government is by far the most supportive. A thread
📢Is Western aid to Ukraine large or small? Our new Ukraine Tracker release takes a "big picture view" over 100 years. Main insight: It's comparatively small. US expenses in previous wars were far higher &the EU mobilized 10x more for other crises (Euro, Covid19, energy crisis)🧵
On Germany, I have been very critical in the past, but it has become a major, reliable donor, incl. a new €10bn military package. Total promised aid is now €51 bn (10bn short & 10bn long-term bilaterally, 17bn EU aid share + 14bn for refugees). That is not far from US (€70bn)
The EU also caught up with the US in military aid commitments. If we add Norway and the UK, then Europe's total military pledges now clearly exceed those of the US. This is the first time we see that in our data since early 2022
Regarding weapons and armaments, the gap between US support and all others is particularly large. Strikingly, tiny Estonia committed more weapons than each of the largest EU economies
📢Big Ukraine Tracker Update: We started to track “aid allocation” (for delivery in near term), not just “commitments”. This reveals big differences in effective aid across Europe. Nordics & GER have moved far ahead in their allocated military aid (not just in their promises) 1/8
📢The Africa Debt Database with
@davidmihalyi
is finally out! A new, free ressource for all. We cover 7000 external sovereign loans and bonds by African governments, 2000-2020. A key insight: Chinese & private debts charge higher interest 👇 Full access:
📢Ukraine Tracker update: The new US aid package is large, but no game changer. It will help to bring Western support back to the level of early 2023, but only for about 6 months. Europe remains in lead on overall support, but did NOT fill the gap left by the US. What else? 1/8
6th update of the Ukraine Tracker. Main insight: New commitments to Ukraine went to almost zero in July (only ca €1.5 bn added, of this €1 bn by Norway). No major new pledges by the large European powers 🇩🇪🇮🇹🇫🇷🇪🇸, see graph (some promised weapons were delivered, though)
On heavy weapons (tanks, howitzers, MLRS etc), Germany now accounts for almost half of all EU commitments (47% of total delivered and promised by EU countries, according to our estimates). Similairly, GER has now committed almost half as much as the US 👇
The key development is a shift to multi-year packages in Europe. The EU Commission announced a €50 bn “Ukraine Facility” in its budget (2024-27), making it the single largest donor👇. Norway promised €6.6 bn over 5 years. Additional multi-year packages came from 🇩🇰🇸🇪🇵🇹🇱🇹🇨🇭🇩🇪 🇬🇧
In total amounts, by far the largest supporter of Ukraine was the United States, followed by Poland and the United Kingdom. Strikingly, the US alone committed more than all of the 27 EU member countries taken together, even after adding EU-level support
📢I am excited to present first results of our big new project "Budgets and Geopolitics, 1870-2022" at the
@MunSecConf
. We show: Military spending in G7 countries has fallen to historic lows, while social spending has risen. We clearly live in an "age of butter," not guns👇1/4
📢Big news: we are launching a new Research Initiative in Geopolitics and Economics at the Kiel Institute (
@katrin_kamin
and I are the founders and co-directors). We see major knowledge gaps in this field and too few academics working in it. We want to help change that. A 🧵
In 2022, European governments mobilized large-scale support, but the large bulk of this emergency fundung was for their own population, not for Ukraine.
@Bruegel_org
data show the massive scale of Europe's energy subsidy packages. They are 10- 20x larger than the aid for UKR
The biggest surprise was the data on the Gulf War 1990/91. I was not aware how much Germany or Japan did to help liberate Kuwait. Germany alone gave 16.9 billion D-Marks in military and financial aid to its allies (0.55% of GDP). That is 3x its bilateral aid to Ukraine in 2022.
The new European multi-year packages shift the rankings in % of GDP (EU-level aid and refugee aid not included, see our website for that). For bilateral aid as % of GDP, Norway is now Nr. 1, followed by the Baltics. Germany enters top 10 for the first time, the US drops out
GER ranks low on aid in % of GDP: The increasingly self-congratulatory tone in GER is not supported by the data, especially if we count specific aid allocations rather than vague commitments. GER allocated 0.3% of GDP to UKR (bilateral aid), much less than Nordics or Eastern 6/8
📢Big news: The Kiel Institute is launching a new PhD program in International Economics. Highlights: (i) courses by outstanding external professors (ii) close supervision (iii) generous funding (iv) work in Kiel or Berlin. Apply until 15 Jan/ 1 March 👇
📢New Update of our Ukraine Support Tracker. Due to Ukraine's counteroffensive, I had expected to see a big new wave of support. Once data collection was done, I was surprised how small total new commitments were March-May 👇 Plus: only ~50% of promised weapons have arrived. A 🧵
As always, kudos to the team
@kielinstitute
: Pietro Bomprezzi, Katelyn Bushnell, André Frank, Lukas Franz, Ivan Kharitonov, Christopher Schade and Leon Weiser. Feedback very welcome (ukrainetracker
@ifw
-kiel.de). More details, data, and graphs here:
Welche Regierungen unterstützen die Ukraine und in welcher Form? Meine Koautoren und ich vom
@kielinstitute
haben heute den Ukraine Support Tracker (Datenbank + Papier) veröffentlicht: . Die USA sind bei weitem der wichtigste Unterstützer. Ein thread
Beyond wars, how does aid to UKR compare to other big crises? EU countries mobilized much more support during the Euro crisis 2010-12 and during the Covid-19 crisis. The EU's pandemic recovery fund NGEU alone is 10x larger than total EU aid to UKR thus far
📢7th Update of the Ukraine Tracker. Highlights: 1) In Aug and Sept, the US promised large new aid, Europe promised almost nothing new, see below. 2) On heavy weapons we have a new ranking. Some governments donated >30% of their howitzers, MRLs or tanks to UKR, most pledged none.
📢Ukraine Tracker Update: New aid commitments since August 2023 collapsed 👇👇. The past 3 months saw the lowest amount of new pledges since the start of the war. The €50bn EU package (the big peak in June 👇) is crucial. If vetoed, UKR could be (almost) without aid in 2024.🧵
🎉I am very proud that Carmen, Sebastian and I won the Calvo Award for the best international macro paper published in JIE in the years 2021 and 2022. Thanks to the JIE editors for this great recognition of our work on China 👇👇👇
The JIE is pleased to announce that the winner of the Calvo Award for International Macroeconomics is “China's overseas lending" by Sebastian Horn,
@carmenmreinhart
, and Christoph Trebesch (
@kielinstitute
).
1/2
The picture changes with military aid allocations in % of donor GDP. Scandinavian countries again stand out, but also the Baltics. Germany with its large GDP now ranks much lower, comparable to Czechia, Slovakia, POL, NL or UK. Caveat: FRA, IT, POL not fully transparent. 2/8
In Europe, the Nordics & GER are the main military donors. We updated the French data (using their new official estimates). The picture changes little. The 4 Nordics (population of 27 million) sent 3x more weapons than FRA & IT combined and about as much as GER (pop>80 mill.) 5/8
The new data also reveal that Europe has always been ahead of US in total aid allocation, even in 2022 (some of my old Tweets did not age well - back then we just couldn't track allocations, no transparency). We now have a much better picture on aid actually arriving to UKR 👇4/8
📢8th update of the Ukraine Tracker. 3 insights: 1) for the first time, the EU surpassed the US in total commitments for UKR👇, 2) GER now ranks 2nd, above the UK (counting bilateral+ EU aid); 3) A new ranking quantifies how transparent countries are on their UKR support. A🧵
How does the support to Ukraine compare to previous wars? Data is scarce, but we know a lot about WW2 (Lend-Lease 1941-45)👇The nr of heavy weapons sent by the US alone is staggering: >30,000 tanks, >25,000 airplanes. In 2022, UKR was promised ca. 500 tanks & 500 howitzers total
Also Germany showed a stark priority for domestic rescue packages in 2022. Total bilateral aid to UKR is comparable to the transport subsidies of mid-22 (9-Euro ticket + “Tankrabatt”). The energy shield ("Doppelwumms") and the Uniper rescue are many times larger
Western support to UKR has collapsed since mid-2023, with US aid falling to zero and Europe providing "aid as usual." Our data show that total aid flows to UKR have fallen by 50% compared to last year. Europe has clearly not made up for the decline in US aid👇 2/8
Wow, today's Wall Street Journal Editorial focuses on our Ukraine Tracker. They emphasize that France, Italy and Germany have delivered only very few weapons to Ukraine thus far
📢We are really excited to host the CEPR-Kiel conference on “Geopolitics and Economics” in Kiel next week Monday/Tuesday (26/27). Keynotes by Matteo Maggiori (Stanford) and Nancy Qian (Northwestern). The event is in person but is livestreamed, so feel free to join (see below)
📢Tracker Update: Who is supporting Ukraine on air defense? Some countries are generous, e.g. Slovakia or Germany (donating >50% of their stocks). Others less so, e.g. the US which gave 8 Patriot launchers but has almost 500 left on stock (note: ITA just announced 4 more, GER 8)
In percent of donor country GDP, bilateral support to Ukraine is at around 1% for the Baltics, 0,37% for the US, 0.17% for GER, 0.07% for FRA, 0.06% for ITA and 0.03% for Spain. If we reassign EU commitments, each EU countries gets approx. 0.2% of GDP more.
4th update of the Ukraine Tracker! We expanded our data coverage on weapons (item by item). We also now compare the commitments (promises) to actual deliveries/disbursements (military&finance). One insight: many countries have sent heavy weapons, Germany not yet. A thread
Background: we shifted the focus from “commitments” (future promises, often vague) to “allocations” (delivered or specified for delivery). This makes a big difference (example👇) and was possible due to more gov.transparency. Details in our research note:
We next compare costs relative to GDP and account for war duration. Data exists for WW2 (see paper) as well as for main US-wars👇Main result: The average yearly military expenditures were far greater in Korea, Vietnam, or Iraq. Total aid to Ukraine is considerably lower in % GDP
📢Join us for our big Kiel-CEPR conference on "Geoeconomics" this Thursday/Friday via live stream 👇👇👇. We've got a fantastic lineup of speakers in Berlin & it was great fun to organize this with
@MSchularick
,
@cepr
&
@kielinstitute
. Full program here:
📢Exciting week ahead! This Thursday & Friday we will host - with
@cepr_org
- our conference on
#Geoeconomics
at
@GermanyDiplo
in Berlin. An elite line-up of experts will delve into cutting-edge discussions on geopolitics, economics, sanctions, China, ... just to name a few.
Which governments are helping Ukraine? The 2nd update of our ”Ukraine Support Tracker” was just released, paper and data here: . We now count commitments January 24 to April 23, thus adding two months to the previous release. A thread on our main findings:
The biggest gap left by the US was in ammunitions, especially artillery shells. Here we compare mil. aid by weapon category. Europe leads on air defense & howitzers, the US lead on ammunition (until 6 months ago). Ammun. is where the new US package can make a big difference 👇4/8
The new allocation data allows us to visualize how US military aid has run out. The bars show new "commitments" through the various acts in US Congress. The President/Pentagon then gradually draws down ("allocates"), military packages to be sent to Ukraine 👇3/8
As always, kudos to the
@kielinstitute
team: Katelyn Bushnell, André Frank, Lukas Franz, Ivan Kharitonov and Stefan Schramm. Feedback very welcome ukrainetracker
@ifw
-kiel.de. More details and results can be found in our expanded paper and dataset here:
Another key finding is that military aid increasingly comes from a core group of main donors that deliver on past promises (US, GER, Nordics, Eastern Europe). The EU also surpassed the US in heavy weapon commitments, with Germany & Nordics pledging the most in recent months👇👇👇
Important: there is a large gap between commitments and allocations, especially for Europe. We should be careful when using commitments data - they include promised future aid. This figure shows that the pace of allocated EU aid has actually slowed since late 2023 👇5/8
Europe and US are now on par regarding military aid: Since Oct. 23, Europe allocated EUR 15bn of mil aid. In comparison: the new US package contains approx EUR 23bn for weapon delivery to UKR, as of our preliminary assessment (excl. funds to replenish US stocks, for US army, etc)
Germany is among the more active European donors and clarified how it will use the €1.2 bn funds allotted for weapon purchases in April 2022. Until 2023 it will send Gepards, Dingos, Zusana-2 howitzers, IRIS-T air defenses. All modern, valuable weapons:
📢Together with
@cepr_org
,
@MSchularick
and I have launched a new Research Network on "Geoeconomics", thus expanding our agenda on geopolitics & economics
@kielinstitute
. We will launch the RPN at a high-level conference on Nov 30/Dec 1 in Berlin. Pls submit until Sept 6 👇
The inaugural conference of the
@kielinstitute
/CEPR joint Research Policy Network (RPN) on
#Geoeconomics
will be on 30 Nov-1 Dec
#CallforPapers
on economic security, vulnerabilities, global value chains, international finance, energy security, & more
In the country ranking (in bn €), Great Britain is now clearly in 2nd place, with twice the amount pledged compared to Germany, Canada and Poland. British support for Ukraine is remarkably constant (pledged further mil help mid-Aug, our data ends Aug 3)
The decline in military support does not bode well for Ukraine's plans for a counteroffensive. Dwindling support increases the likelihood of a stalemate or of further Russian advances, as pointed out by
@KofmanMichael
and
@CarloMasala1
As always, kudos to the team
@kielinstitute
: Pietro Bomprezzi, Catarina Chambino, Celina Ferrari, Caspar Gerlan, and Ivan Kharitonov. Feedback very welcome (ukrainetracker
@ifw
-kiel.de). More details, data and graphs here: 8/8
This is the first version of the database. We plan to regularly update and improve the tracker. Feedback and comments are therefore very much appreciated, please email us ukrainetracker
@ifw
-kiel.de
On my way to our "Junior Workshop in Geoeconomics" organized by
@Unibocconi
,
@cepr_org
&
@kielinstitute
Great to see a fantastic group of researchers entering this rising field. Stay tuned for the anouncement of our best paper award winner. Full program:
Let us first look at UKR support over the course of 2022. We see a repeating pattern: the US leads, Europe follows. As of Jan 15, 2023, the US (€73bn) is again clearly ahead of the EU (€55bn, members + EU Commission)
In the ranking in % of GDP (and after adding EU aid shares), Eastern Europeans continue to lead. Norway moves up to 5th place, UK now 8th, the US 10th. The large EU powers fall further behind: Germany on 17th place, France 21st, Italy 24th (out of 40)
The 3rd update of our Ukraine tracker is out. In short: New US package is a game changer. US now accounts for 2/3 of total commitments, also UK committed more. However, EU countries fall behind (now less than 25% of total aid, which is puzzling). A thread.
📢Wir besetzen 2 neue W2 Professuren (unbefristet) -am
@kielinstitute
& an der
@unihh
. Gemeinsam bauen wir ein neues Zentrum für Internationale VWL im Norden auf. Fokus auf Forschung, viel Flexibilität, tolle Bedingungen. Bitte weitersagen und bewerben:
Martin Wolf wrote a strong opinion piece asking for more help for Ukraine. I fully agree. He uses 5 of our graphs, that's great to see after so much work. All of this would have been impossible without our student team members, big congratulations to them!
Another clear pattern in 2022: The US gives large military aid to UKR, the EU focuses on financial aid (much of this aid remains undisbursed, however).
📢Fantastic news:
@MSchularick
will be the new president of the
@kielinstitute
. We could not be happier. Welcome, Moritz, we really look forward to exciting times 🎉🥳🍾
There is a big gap between committments and deliveries. We find that only 50% of heavy weapons promised by Western countries arrived in Ukraine. Eastern European delivered 85% of their promises, on avg. Here is one of our new rankings of heavy weapon deliveries (here: tanks):
Also delays in delivering aid continue, especially on financial aid (the gap on military aid has decreased). Ukraine still needs $5bn per month, but is getting less than half of that, the rest needing to be financed with domestic borrowing (-->inflation)
📢We are hiring 2 associate professors (tenured) in international economics (broadly defined)
@kielinstitute
&
@unihh
(part of a new joint center for international econ). Light teaching load, much flexibility, and great research conditions. Please apply:
We also find a growing disconnect between military spending & risk. Germany today faces v. high geopolitical risk -at a level of the early 1960s (Berlin Wall, Cuban m. crisis). Yet GER military spending in 2022 is just a third (!) of that in 1962 (in % of budget or % of GDP)👇2/4
We trace military, humanitarian, and financial aid flows to Ukraine, focusing on aid by 31 Western governments. Private donations and aid by multilateral organizations like the UN are not (yet) included. We value in-kind support using market prices (upper bounds)
The biggest new military packages came from Germany (€3.6 bn, in the form of “Ertüchtigungshilfe” to pay for industry deliveries + BW stocks), as well as Denmark (€765 m). Poland and Slovakia delivered MiG jets. Below is the new ranking by military commitments. However....
A great test for our data came on July 1, when 🇩🇪 released a full list of its military aid to Ukraine. Previously 🇩🇪 was opaque, so we had to puzzle. Result: we missed little of relevance. Our database had covered 85% of delivered and 75% of promised items
Kudos to the team of this release: Arianna Antezza, André Frank, Lukas Franz, Ivan Kharitonov, Bharath Kumar, Ekaterina Rebinskaya. Next update in September. More details, paper and database here:
China's rescue activities are more reminiscent of a regional bailout scheme, like the European ESM or the US bailouts in Latin America in the 1980s. We therefore call this “Bailouts on the Belt and Road”. Indeed, rescue loans mostly go to countries with high debts owed to China👇
Indeed, Germany seems to systematically underreport its scope of military aid. For bureaucratic reasons the government uses time values. As a result, a 40-year old Gepard Flakpanzer will likely be valued at close to 0 in €, despite its current worth on the battlefield
As a case in point, the EU governments are still debating on a €8bn financial MFA package announced in May (now 3 months without agreement, originally €9bn). According to media, GER opposes loans and does not want to pay twice after its €1 bn grant
We know that China’s BRI went from boom to bust. Fresh lending is down; debt distress & restructurings are up. This papers now shows that Chinese creditors also reacted by extending large bailouts to crisis countries (new hand-coded dataset 2000-21). The system has 2 pillars
Interested in applied research on Ukraine? We are looking for new members in our fantastic Ukraine Tracker team and offer paid 3-month internships in Kiel. The start would be ASAP or in the summer. Both Bachelor or Master level. Please send your CV to ukrainetracker
@ifw
-kiel.de
In total, 20+ debtor countries received >240 billion USD in Chinese rescue lending since 2000. Most of that (185 billion USD) was extended in the past five years (2016-2021). Over the past decade the sum corresponds to 20% of total IMF lending. So this is large and growing fast
I agree with this take👇(likely overvaluation). But: no matter how you value French mil. aid (€1, 2 or 4 bn), the big picture doesn't change. The good news is that France is now more transparent. For consistency with other countries, we will use the French figures as reported
“I contest the Minister of the Armed Forces’ contestation of [Kiel’s ranking method]. I also contest the calculation of the Ministry of the Armed Forces, which is confusing apples and oranges by valuing 40-year-old VAB at the price of new Griffon.” —
@Leo_PeriaPeigne
The results point to very large differences in the scale of support for Ukraine across countries, both in absolute terms and as percent of donor GDP. This version traces aid in the first 4 weeks since Russia’s full-scale invasion (February 24 until March 27).
We also improved our data further. We worked on gathering better prices for weapons (further feedback welcome!), but continue to use an “upper bound” rule to avoid underestimating the scope of aid. We also updated our detailed tables on weapon deliveries by type in the paper
I am in Rome and honored to give the keynote on: "International Lending in War and Peace, 1790-2023", at the the Bank of Italy/IMF/BoE/BdF/OECD workshop on International Capital Flows 👇👇👇. We study how geopolitics shapes global capital allocation & state-driven lending
Tomorrow, Friday Oct. 6 will take place the 4th Workshop on Capital Flows and Financial Policies: 6 papers on new challenges for capital flow policies amid climate change and fragmentation, digitalization and the role of the US dollar in the international monetary system
There is striking heterogeneity here. Most governments donated no heavy weapons, others gave 30% of their stocks (e.g. Norway of its MRLs and Howitzers, or Poland of its tanks). Here is a summary across weapon types, i.e. the average shares of howitzers, tanks & MRLs donated
Big congratularions
@GitaGopinath
for winning the Kiel Bernhard Harms Prize. We really look forward to welcoming you to Berlin soon, and to hear your prize speech
Economist
@GitaGopinath
will be awarded this year's Kiel Institute Bernhard Harms Prize. We are proud to honor one of the world's most influential scholars in the fields of international finance and international macroeconomics. The award ceremony will be held for the first time
The first pillar is the global swap line network created by the People’s Bank of China. Officially, the purpose is to foster trade and investment in RMB. We code the actual drawings (for the first time) and find that this money is actually going to crisis countries in distress
Interestingly, the interest rates charged on Chinese bailout loans (including PBOC swaps) are comparatively high. This is in line with our previous findings (/w Horn/Reinhart) that China charges higher interest rates than other bilateral lenders, or the IMF/World Bank
Want to understand the US aid package to Ukraine in a bigger picture? Excellent article and graphs by the New York Times, also using our Ukraine Tracker, P.S. We had many exchanges with them, they REALLY drilled deep into this. Impressive journalism
I do not expect the budget plans of France, Italy or Spain to look much better on Ukraine support (feedback welcome). Maybe there are plans at EU level. Overall it seems Europe heavily free-rides on the US. Indeed, US just passed another $11.7bn package
In our new research note (released later today, check our website), we also discuss data quality in depth. We discuss our sources (higher reliability than 2022), our new weapon transparency index, and benchmarking checks (incl. comparison with a French parliamentary report) 6/8
However, China should not be seen as a new “international lender of last resort” with deep pockets, like the IMF. The IMF’s global lending portfolio is 5x times larger and more global in nature, while US Fed swaps to advanced economies dwarf the size of Chinese PBOC swaps
Our results suggests that much could be done by pooling weapon donations across countries. Here is an interesting policy plan by
@GresselGustav
,
@_RafaelLoss
, and
@jana_puglierin
on how the EU could coordinate to send Leopard 2 tanks to UKR
📢Geoeconomics news for juniors: Best paper award & junior workshop in Milan on May 29/30. If you are <36y, submit to our geoecon. workshop
@Unibocconi
. The prize is jointy awared by Bocconi, CEPR & the Kiel Institute. Deadline April 7, all details here: