Today, the Council formally adopted two regulations implementing the tariff-related commitments set out in the EU-US Joint Statement of 21 August 2025. The adoption completes the legislative process and confirms the EU’s commitment to a stable, predictable and mutually beneficial transatlantic trade relationship, while preserving the necessary guardrails to protect European economic interests.
“We are committed to a strong and open transatlantic partnership with our historic ally, but openness must go hand in hand with safeguarding our interests. These measures achieve both, supporting stable and predictable trade flows with the US while ensuring the EU can respond swiftly and proportionately when the deal is not respected or its interests are at stake. We are sending a strong signal that Europe is open to the world, but also clear about protecting its businesses and workers.”- Michael Damianos, Minister of energy, commerce and industry of the Republic of Cyprus
The two regulations remove the remaining EU customs duties on US industrial goods, introduce preferential access for certain US seafood and non-sensitive agricultural products through tariff rate quotas and reduced tariffs, and extend the suspension of duties on lobster imports, including processed lobster (from all countries on a most favoured nation basis).
The regulations also contain reinforced safeguard and suspension mechanisms. In particular, the regulations provide for a dedicated safeguard mechanism enabling the Commission to act swiftly in cases of significant import surges causing or threatening to cause serious injury to EU operators, and strengthen the EU’s ability to suspend tariff preferences where the US does not respect its commitments, undermines the objectives of the Joint Statement, or otherwise disrupts balanced trade relations, including through discriminatory measures.
Next steps
The two regulations will now be signed and published in the Official Journal, entering into force on the day following their publication.
The main regulation will cease to apply at the end of 2029. By 30 June 2029, the Commission will present a comprehensive assessment of their impact on EU-US trade flows, tariff revenue and economic effects, including on SMEs, and will accompany it with a legislative proposal to extend the application of the regulations, where appropriate.
The regulation concerning lobster imports will apply retroactively from 1 August 2025 and will expire on 31 July 2030 unless further action is taken.
Background
The European Union and the United States have the largest bilateral trade and investment relationship and the most integrated economic relationship in the world, representing almost 30% of the global trade in goods and services and 43% of global GDP. EU-US trade in goods and services has doubled over the last decade, surpassing €1.7 trillion in 2025. This deep and comprehensive partnership is underpinned by mutual investment: in 2024 EU and US firms held over €4.8 trillion in investments in each other’s markets.
Proposed by the European Commission on 28 August 2025, the two regulations will enact the EU’s tariff reductions set forth in paragraph 1 of the EU-US Joint Statement of 21 August 2025. The first (main) regulation eliminates the remaining customs duties on US industrial goods and grants preferential market access, including via tariff rate quotas (TRQs) and reduced tariffs for certain US seafood and non-sensitive agricultural products. The second regulation focuses on extending the duty suspension for imports of lobster, including processed lobster, from all countries on a most favoured nation basis.
 
 
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Today, the European Commission adopted an ambitious tax simplification package designed to simplify EU tax rules and reduce compliance burdens for businesses. The package comprises of two proposals, the Taxation Omnibus and the Recast of the Directive on Administrative Cooperation (DAC) and will modernise the EU’s direct tax framework and strengthen the competitiveness of the Single Market while maintaining the existing strong level of protection against tax fraud, evasion and avoidance. The package is expected to save EU businesses around €8 billion annually, of which €3.3 billion in administrative costs.
Tax Simplification Package
Over the past decade, the EU has significantly developed its direct taxation framework. Most notably, developments have addressed the challenges arising from globalisation, digitalisation, the rise of aggressive tax planning practices and the need to strengthen the functioning of the internal market.  This framework has delivered important results. However, the cumulative effect of successive legislative initiatives has also increased complexity and compliance costs for businesses operating cross-border.
The proposal addresses these issues and ensures that the Union’s direct tax framework remains coherent, proportionate and effective. Its goal is to simplify the acquis in direct taxation, reduce unnecessary compliance burdens, enhance legal certainty, and facilitate cross-border activity in the internal market.
The Omnibus on Direct Taxation, it introduces key measures, such as:

Simplifying cumbersome rules to improve the internal market: The Omnibus introduces an exemption from withholding tax on all cross-border payments of dividends, interest, and royalties between companies in the EU. By removing upfront procedural requirements and simplifying refund processes, the measure will facilitate financing, encourage investment, and enhance competitiveness. This measure alone should bring EU taxpayers savings and benefits of around €5.3 billion annually.
Facilitating Financing: The Omnibus removes unnecessary restrictions on genuine third-party and market financing, making it easier for businesses to invest in the internal market. The Omnibus also simplifies the interest limitation rule in the Anti-Tax Avoidance Directive (ATAD) by eliminating implementation options and making the de minimis threshold mandatory. These changes will bring about compliance and administrative reductions amounting to over €500 million per year.
Eliminating Duplication: The Omnibus removes overlapping provisions between the Controlled Foreign Company (CFC) rules and the global minimum tax (Pillar Two), reducing unnecessary complexity and overlaps. This measure should save businesses approximately €160 million in compliance costs annually.

The main objectives of the DAC recast proposal are to simplify, clarify and enhance the EU legal framework for administrative cooperation in the field of direct taxation. By bringing together the DAC and its eight amendments into one single legal text, the legislation is more user-friendly and coherent, thereby improving legal certainty.
The recast introduces some key measures, such as:

Removing reporting obligations for certain cross-border arrangements: The recast removes reporting obligations for Multinational Enterprise (MNE) groups subject to the minimum 15% tax rate under Pillar 2 rules, generating compliance cost savings of around €300 million. It also eliminates reporting requirements for all other EU businesses for certain cross-border tax arrangements that provide limited added value for tax administrations, reducing reporting volumes by 35% and saving €40 million annually.
 Supporting the Circular Economy: The recast increases the reporting threshold for the online sales of goods, removing reporting obligations on over 10 million private sellers, particularly those selling second-hand goods. This measure delivers compliance cost savings of €678 million for digital platforms.
Improving Taxpayer Identification: The recast introduces a new verification tool for taxpayer identification numbers, ensuring that tax administrations can efficiently and effectively identify all reported taxpayers.

Next steps
The package will now be submitted to the European Parliament for consultation and the Council for adoption.
Background
Since the start of this mandate, simplification has been a core priority of the Commission’s work, with clear targets of at least 25% reduction in administrative burdens (35% for SMEs) and EUR 37.5 billion in annual savings by 2029. With the packages proposed today, the Commission has already put forward twelve omnibus packages and a broad set of targeted measures last year, cutting over €18 billion in recurring annual administrative costs.
But this is not just about reducing paperwork – simplification is a core part of the Commission’s competitiveness agenda. It is about changing Europe’s regulatory culture: designing rules that are clearer from the start, more proportionate, and easier for businesses, especially SMEs, to understand and comply with. The aim is to keep Europe’s high standards, while making it easier to invest, innovate and grow across the Single Market.
 
 
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Blog | The adoption rate of AI is rising rapidly, but the intensive use that drives transformation and generates macroeconomic gains remains rare. This blog explores what sets intensive AI users apart and what firms need to deeply integrate AI into their production processes.
The advent of AI has been widely hailed as a driver of productivity growth. Yet simply adopting AI does not guarantee measurable improvements in firms’ efficiency. What does matter is what they use the new technology for. Firms that apply AI to core processes tend to generate more value than those that restrict its use to peripheral or routine tasks. Intensive use, meaning use that goes beyond infrequent or moderate levels, particularly when linked to innovation and the expansion of products and services, is more likely to boost productivity and support economic growth.
So far, however, very few firms in the euro area actually use AI intensively. Understanding what differentiates intensive users from other firms and what enables them to fully leverage AI is therefore essential. To that end, we took a closer look at the ECB’s Survey on the access to finance of enterprises (SAFE).
AI diffusion continues to rise, but deepening takes time
How large is AI’s footprint so far? As SAFE – our survey of over 5,000 firms across euro area countries – and other recent studies show, diffusion is increasing quickly. In the last quarter of 2025, more than 70% of firms reported using AI (Chart 1, panel a), a trend that looks set to continue. Nearly half of the firms that were not using AI in 2025 plan to invest in it in 2026.
At the same time, most firms report using AI only infrequently or moderately, with only 7% of euro area firms reporting intensive use. There are, however, considerable differences across countries, sectors and firms. While the likelihood of adopting AI increases with firm size – this has been well established in the literature[1] – intensive use is relatively more common among small firms (Chart 1, panel b). Younger firms – those active for less than ten years – also report intensive use more frequently than older firms. Overall, however, it is size rather than age that appears to be more closely associated with intensive AI use.
The line of business also makes a difference. Intensive use is particularly prevalent in services, especially – and unsurprisingly – in high-tech, knowledge-intensive services like the information and communication (ICT) sector. These sectors include developers and providers of AI tools, which tend to be highly digitalised. They also have access to abundant data and computing infrastructure and employ workers with strong technical skills.
Chart 1
AI use and intensity

a) Use and intensive use of AI

b) Use and intensive use of AI by firm size and sector

(percentage of firms)

(percentage of firms)

Source: ECB Survey on the access to finance of enterprises, round 37 (October-December 2025).
Notes: Panel a) shows the weighted share of firms using AI and using AI intensively. Red dots represent the smallest and the highest weighted average for countries. Panel b) shows the weighted share of firms using AI intensively out of all firms using AI for employment-based size classes, manufacturing, information and communication services and other services. Detailed sector information is from Orbis. Intensive use refers to responses indicating “significant use” when assessing the adoption of AI technologies by the firm.

Why do firms use AI? The reasons differ among intensive and moderate users. Firms at an early stage of adoption often cite cost reductions and improvements in operational efficiency as their main reasons for using it. By contrast, intensive users are more frequently motivated by growth and innovation. Responses to the SAFE survey show that intensive users are more likely to mention employment growth[2], as well as support for research and development. They also mention the expansion of products and services as key reasons for adopting AI.
Intensive use driven by peer pressure
Beyond firm and sector factors, survey results indicate that peer pressure is a key driver of intensive AI use. When firms see their peers investing in AI, they fear a potential competitive disadvantage and therefore also feel the need to use the technology more intensively (Chart 2).
A similar pattern emerges when looking at expectations about the diffusion of future AI investment. Firms that expect a higher future share of AI users among similar-sized firms in their sector are likely to intensify their own use of the technology (Chart 2, panel a). The peer pressure effect is primarily driven by incumbent, well-established firms rather than young firms. This means that incumbent firms adopt AI more intensively as they feel threatened by young firms that are technologically advanced, as well as by their high-performing peers (Chart 2, panel b).
Chart 2
Impact of peer pressure on AI use: intensive versus moderate users

a) Current versus future peer pressure

b) Peer pressure of young and incumbent firms

(Average marginal effects)

(Average marginal effects)

Source: ECB Survey on the access to finance of enterprises, round 37 (October-December 2025).
Notes: Perceived AI use and expected future AI use refer to the current and future share of firms investing in AI in the same sector and size class as perceived by respondents. The charts report average marginal effects from firm-level regressions where the dependent variable is a binary dummy taking the value 1 for intensive AI use and 0 for moderate or infrequent AI use. A 10 percentage point increase in the current (future) AI investment rate increases the probability that a firm is AI-intensive by about 1.9 (1.4) percentage points. Young firms are firms that are less than five years old. Survey-weighted regressions with industry, country, firm size and age fixed effects. Whiskers represent 90% confidence intervals.

The peer pressure effect is most pronounced in ICT and professional services. These sectors have a high share of young firms, a large presence of high-growth firms and exposure to technologically advanced foreign competitors. Taken together, these features indicate highly dynamic and competitive business environments. In these settings, incumbent firms are compelled to intensively adopt advanced technologies, such as AI, to remain competitive.
Click here to access table.
Intensive AI use requires broader financing
The SAFE results also show that more than 84% of firms reporting intensive AI use have invested in the technology. Only 33% of moderate users, however, have done so. Looking ahead, 99% of intensive users plan to invest in AI in 2026, allocating around 20% of their total investment to AI-related activities.
This shows that investments that go beyond purchasing licences for general AI tools typically require more substantial funding. Indeed, integrating AI into core processes, such as developing customised solutions or upgrading digital infrastructure, often entails larger and longer-term restructuring. And these investments cannot easily be financed through short-term instruments such as trade credit or own funds.
Our analysis comparing firms in the same industry and country, and of similar size and age, shows that firms using AI intensively are more likely to combine several sources of financing. In the euro area, companies have fewer ways to raise money directly from investors or financial markets, so they depend more on bank loans to finance AI investments (Chart 3). This contrasts with findings that compare AI users with non-users, where firms using AI are more likely to rely on own funds compared with firms not using AI.
Interestingly, it also matters who the company owners are. As our statistics show, firms with public shareholders are more likely to adopt AI. This could reflect a greater willingness of professional management to adopt new technologies. However, being publicly owned does not mean a company is more likely to go from moderate to intensive AI use.
Chart 3
Impact of financing and ownership on intensive use of AI

a) Impact of various financing sources

b) Impact of market ownership

Source: ECB Survey on the access to finance of enterprises, round 37 (October-December 2025).
Notes: Panel a) indicates whether firms view each financing source as relevant. A financing source is considered relevant if the firm used it in the past or is considering using it in the future. Panel b) indicates whether firms are owned by public shareholders (i.e. listed firms) or report other types of ownership. The charts report average marginal effects from firm-level regressions, where the dependent variable is a binary dummy taking the value 1 for intensive AI use and 0 for moderate or infrequent AI use. Survey-weighted regression with industry, country, firm size and age fixed effects. Whiskers represent 90% confidence intervals.

What can help firms intensify their AI use?
As shown above, only a fraction of firms use AI intensively. The macroeconomic impact of AI will depend on whether firms move beyond initial experimentation and begin using the technology intensively in their core activities. So, what do firms need to expand their use?
Here, it is important to look beyond the broader structural constraints such as competitive pressure, market dynamism and access to financing. Unsurprisingly, the survey results suggest that technological factors matter. Firms most often cite shortages of AI-related skills (40%), limited usefulness of current AI technologies for their business needs (28%) and incompatibility with existing systems (26%).
Targeted policy support could help address some of these issues. In particular, it could help small and medium-sized enterprises scale up their efforts. Promoting the sharing of successful use cases could, for instance, help raise awareness of AI’s potential. Furthermore, applied training programmes for managers, employees and IT specialists, together with subsidised advisory services, could also help firms strengthen the skills needed to implement AI effectively.
The views expressed in each blog entry are those of the author(s) and do not necessarily represent the views of the European Central Bank and the Eurosystem.
 
 
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Secure, private and free-to-use means of payment, both online and offline

Privacy safeguards built in

Limits to individual holding, pilot testing and coordinated public awareness campaigns

The digital euro would offer citizens and businesses a private, secure and innovative way to pay, while reducing reliance on non-EU providers.

On Tuesday, the Economic and Monetary Affairs Committee adopted its position on the single currency package, consisting of three files. The one on the establishment of the digital euro was adopted by 43 votes to 14, with 1 abstention.
The digital euro would be a new, electronic form of money issued by the European Central Bank (ECB) and would work online and offline. Online payments would be processed through an account-based system, while offline payments would work directly via local storage devices. The offline functionality would be equivalent to using physical cash, as losing the device would mean losing the offline money with no refund possible.
Privacy
Privacy-by-design and privacy-by-default principles would be built into the digital euro. Cutting-edge technologies, such as “zero-knowledge proofs”, would allow transactions to be verified without exposing personal data, which would be processed only to the extent strictly necessary for the system to function. The ECB would not have access to personal identification data.
Distribution model
All payment service providers (PSPs), including banks, e-money providers, post offices, and regulated crypto-asset providers, could distribute the digital euro across the EU. Most businesses would be required to accept it. Exceptions would apply to the self-employed, and small and micro enterprises that do not accept other digital payments.
Temporary refusals, such as during a power outage, would also be allowed under specific conditions. Visitors, tourists and, in some cases, people living outside the euro area would also be able to use it.
Fees and charges
Basic services, such as opening an account, holding and managing funds, and getting at least one payment instrument, would be free of charge. PSPs could charge for extra services, with the exception of account maintenance inactivity penalties or service bundling. Fees for merchant and inter-provider would be capped, while offline payments would be entirely fee-free.
Financial stability and holding limits
To protect the financial system, there would be a cap on how many digital euros any individual could hold. MEPs proposed the EU ceiling should be set by the Commission, based on ECB recommendations, and reviewed at least every two years. MEPs want the Parliament to have full decision-making powers in this process.
Businesses would not be allowed to hold digital euros, except to accumulate incoming payments for up to 24 hours. Crucially, the digital euro would not earn or cost any interest.
Seamless launch and the ECB’s role
MEPs want to ensure that the ECB’s role would be kept separate from its monetary policy functions. Before the launch, the ECB should finalise a rulebook, build the infrastructure, run real-life pilot tests, and iron out liability rules with particular attention to offline risks, like double-spending. Once authorised, a roll-out period of at least 24 months would follow, giving banks, providers, and users time to prepare. Governments and providers would also run awareness campaigns.
The single currency package
A second file on the provision of digital euro services by payment services providers incorporated in member states whose currency is not the euro, adopted by 43 votes to 9, with 6 abstentions, would allow banks and PSPs from non-euro EU countries to distribute the digital euro, subject to the same rules, while the ECB would retain the power to restrict access and use. Non-euro EU member states would also need to appoint a national authority to monitor any impact on their own currency.
A third file, on legal tender of euro banknotes and coins, adopted by 46 votes to 4, with 8 abstentions, would oblige euro area countries to keep cash accessible and plan for digital payment disruptions. Businesses would not be allowed to ban cash through “no cash” signs or standard contract terms. Member states would also need to check cash availability regularly, with special attention to vulnerable groups, such as the elderly, low-income individuals, and the unbanked.
Quote
Rapporteur Fernando Navarrete Rojas (EPP, ES) said: “With the single currency package, we are protecting citizens’ freedom to choose how they pay. We are strengthening access to and acceptance of cash, while making central bank money available in digital form. The digital euro will complement cash, never replace it. No one should be forced away from cash, and no one should be left without a secure, resilient and genuinely European digital payment option.
“Europe does not have to choose between the digital euro and successful private payment solutions. We need both to work together. The agreement rightly recognises the dual approach: existing standards and infrastructure should be reused wherever possible. This will allow European payment solutions to connect to a common acceptance infrastructure and become interoperable across borders.
“The agreement also ensures that privacy will be built into the digital euro from the outset. Europeans will gain a secure digital payment option while remaining in control of both their money and their personal data.”
Next steps
The negotiating mandates for the three texts will be announced at the start of the July plenary session. The final legislation will have to be negotiated with the Council before coming into force.

 
 
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As firms around the world adopt AI tools, the impact of AI on labour markets is being widely discussed.[1] While AI’s potential to disrupt job markets could be significant, its effects on aggregate employment appear to be muted so far. Still, there is growing evidence that AI is negatively affecting employment for specific occupational sub-groups, particularly junior workers in highly exposed occupations.[2] This box analyses the effects of AI on employment growth in recent years, focusing on the United States, where such effects are likely to have become visible earlier than in other major economies, given that it is home to some of the most advanced early-adopting firms and has a relatively flexible labour market.

The impact of AI on job growth can be both positive and negative, as highlighted in recent literature on the subject. A well-known framework developed by Acemoglu and Restrepo (2018) distinguishes between the positive effect new technologies have on employment growth by enabling higher productivity, and the negative effect they create owing to job displacement, with the net impact on a country’s employment depending on the relative importance of those effects. Empirically assessing the impact of AI on employment at this early stage is difficult (Lane, 2026). Hampole et al. (2025) show that while in the United States firm-wide adoption of AI generates positive employment effects, these effects mask substantial heterogeneity across occupational groups. Initial evidence for the European Union suggests that firms that adopt AI technologies experience higher productivity gains, without the technology replacing labour in the short term (Aldasoro et al., 2026). This aligns with recent ECB survey findings that firms with high levels of AI adoption or AI-related investment are more likely to employ additional staff (Lebastard and Sondermann, 2026).
In the United States, the number of jobs in occupations with a high AI substitution risk has fallen in recent years. Applying an index developed by Pizzinelli et al. (2023) to measure AI substitution risk, each occupation is categorised into one of three categories, corresponding to a low, medium and high risk of AI substitution.[3] A calculation of average employment growth for each of those categories in the United States suggests that employment in jobs with a high risk of AI substitution (e.g. economists, graphic designers) declined on average by more than 4% between 2019 and 2025 (Chart A).[4] By contrast, employment in jobs with a low risk of AI substitution (e.g. electricians, high school teachers) increased by 13% over the same period. As a consequence, the composition of US employment has changed. The share of low-risk jobs in total US employment has increased from 23% to 25%, while the share of high-risk jobs has dropped from 35% to 33%.

Chart A
Employment growth and share in total employment of occupations grouped by AI substitution risk – United States

(percentages)

Sources: Bureau of Labor Statistics, Pizzinelli et al. (2023) and ECB staff calculations.

An empirical analysis confirms that AI has already led to a reallocation of jobs within the US labour market. The impact of AI substitution risk on employment growth is estimated using the same classification of occupations by level of AI substitution risk as before. The analysis uses a difference-in-difference approach and separately estimates the impact of an occupation’s risk of AI substitution on its employment growth for each year (2020-2025) compared with the base year (2019). It also includes a constant and sector-specific fixed effects corresponding to three-digit North American Industry Classification System (NAICS) subsectors, controlling for shocks (e.g. COVID-19), sector-specific developments and unobserved heterogeneities.[5] The results indicate a growing wedge between job growth in occupations with a high AI substitution risk compared with occupations with a low AI substitution risk (Chart B).[6] All else being equal, between 2019 and 2025 jobs with a high substitution risk grew by around 15 percentage points less than jobs with a low substitution risk. This is in line with studies showing that AI is affecting job growth for specific occupational sub-groups. Overall, while the consequences of AI for aggregate employment to date remain inconclusive, the analysis finds that it has had a relative impact on US employment growth since 2019.[7] This impact has accelerated since the launch of ChatGPT in late 2022.

Chart B
Impact of AI on US employment growth – difference between high and low risk of substitution

(percentage points)

Sources: Bureau of Labor Statistics, Pizzinelli et al. (2023) and ECB staff calculations.
Notes: The line shows the estimated relative impact of AI exposure on employment growth for each year compared with 2019. The model uses a difference-in-difference approach and separately estimates the impact of an occupation’s risk of AI substitution on its employment growth for each year (2020-2025) compared with the base year (2019). The top and bottom 1% of employment growth have been winsorised to control for outliers. The model also includes a constant and sector-specific fixed effects corresponding to three-digit NAICS subsectors. Results have been rescaled to indicate the difference between high and low AI substitution risk. The shaded area corresponds to the 95% confidence interval.

The relative impact of AI on job growth has not yet translated into significant differences in wage growth. As is the case for employment effects, although the impact of AI on wages and inequality is fiercely debated in the literature, empirical evidence of it is scarce. Using the same methodology as before, an analysis of median hourly wage growth by occupation reveals that AI substitution risk has had no significant impact on wage growth since 2019 (Chart C).[8] Over time, as the labour market continues to adjust and AI tools become more generative, income effects may be more pronounced.[9]

Chart C
Impact of AI on US wage growth – difference between high and low risk of substitution

(percentage points)

Sources: Bureau of Labor Statistics, Pizzinelli et al. (2023) and ECB staff calculations.
Notes: The line shows the estimated relative impact of AI exposure on median hourly wage growth for each year compared with 2019. The model uses a difference-in-difference approach and separately estimates the impact of an occupation’s risk of AI substitution on its wage growth for each year (2020-2025) compared with the base year (2019). The model also includes a constant and sector-specific fixed effects corresponding to three-digit NAICS subsectors. Results have been rescaled to indicate the difference between high and low AI substitution risk. The shaded area corresponds to the 95% confidence interval.

References
Acemoglu, D. and Restrepo, P. (2018), “The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment”, American Economic Review, American Economic Association, Vol. 108(6), pp. 1488-1542.
Aldasoro, I., Gambacorta, L., Pal, R., Revoltella, D., Weiss, C. and Wolski, M. (2026), “AI Adoption, Productivity and Employment: Evidence from European Firms”, BIS Working Papers, No 1325, Bank for International Settlements.
Brynjolfsson, E., Chandar, B. and Chen, R. (2025), “Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence”, Stanford Digital Economy Lab.
Felten, E., Raj, M. and Seamans, R. (2021), “Occupational, industry, and geographic exposure to artificial intelligence: A novel dataset and its potential uses”, Strategic Management Journal, 42(12), pp. 2195-2217.
Hampole, M., Papanikolaou, D., Schmidt, L.D.W. and Seegmiller, B. (2025), “Artificial Intelligence and the Labor Market”, NBER Working Papers, No 33509, National Bureau of Economic Research.
Hui, X., Reshef, O. and Zhou, L. (2023), “The Short-Term Effects of Generative Artificial Intelligence on Employment: Evidence from an Online Labor Market”, CESifo Working Paper Series, No 10601, CESifo.
Lane, P.R. (2026), “AI and the euro area economy”, Keynote Speech at the ECB-SAFE-RCEA International Conference on the Climate-Macro-Finance Interface (3CMFI), European Central Bank, Frankfurt, 23 March.
Lambert, P. and Schindler, Y. (2026), “The Broken Ladder: AI, Remote Work, and Early-Career Hiring”, May, SSRN.
Lebastard, L. and Sondermann, D. (2026), “Artificial Intelligence: Friend or Foe for Hiring in Europe Today?”, The ECB Blog, European Central Bank, 4 March.
Massenkoff, M. and McCrory, P. (2026), “Labor Market Impacts of AI: A New Measure and Early Evidence”, Anthropic Economic Research.
Pizzinelli, C., Panton, A.J., Mendes Tavares, M., Cazzaniga, M. and Longji, L. (2023), “Labor Market Exposure to AI: Cross-country Differences and Distributional Implications”, IMF Working Papers, No 2023/216, International Monetary Fund.

The box focuses on the labour market effects of AI adoption on the demand side and does not explicitly capture potential employment gains arising from the supply side, such as job creation linked to investment in AI development and deployment.

See, for example, Brynjolfsson et al. (2025) for an analysis of US payroll data. Note that Lambert and Schindler (2026) question the finding that generative AI is replacing junior workers. They find that exposure to generative AI is strongly correlated with another post-pandemic shock: working from home.

Pizzinelli et al. (2023) adapt the widely used index created by Felten et al. (2021) by factoring in the complementarity of occupations to AI, assuming that a lower complementarity to AI coupled with a high exposure to AI bears a higher risk of AI substitution and therefore job loss. For example, according to this extended index, a computer programmer and a computer science teacher have the same exposure to AI. However, as AI is more complementary to the teacher’s tasks, the teacher has a lower risk of job substitution than the computer programmer. Pizzinelli et al. call their index “complementarity-adjusted AI occupational exposure”. For ease of reading, it is referred to as “AI substitution risk” in this box. It should also be noted that AI does not only include large language models, but also other – earlier available – applications such as image recognition and automated translation.

As the focus lies on recent developments, the last pre-pandemic year (2019) is taken as the base year for the analysis. However, AI is likely to have already impacted the US labour market prior to 2019.

For example, a decline in manufacturing jobs might be unrelated to AI and instead be driven by other structural developments such as offshoring. As some manufacturing jobs run a high risk of AI substitution (e.g. inventory management or order picking), such a decline could mistakenly be attributed to AI.

It should be noted that the framework does not explicitly control for AI adoption.

Massenkoff and McCrory (2026) undertake a similar analysis for US unemployment rates and find no significant rise in the unemployment of workers in the most exposed occupations. This could also point to a reallocation of jobs within the US labour market.

The impact of AI on wages also depends on labour supply and demand dynamics, which cannot be distinguished in the framework used here.

In one of the few available empirical studies in this area, Hui et al. (2024) assess the impact generative AI models have had on freelancers registered on a large online hiring platform since 2022 and find reductions in both the employment and earnings of highly affected occupations.

 
 
 
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Blog | New policy tracker shows many governments pursuing costly responses to fuel and food price hikes, leaving less room to address future challenges.
As governments move quickly to shield people and businesses from the energy shock caused by the war in the Middle East, early evidence suggests many countries are resorting to untargeted and potentially expensive policies amid tight budgets. If the recent peace talks lead to a quick normalization of trade and oil flows, and prices go back to their historic trends, the challenge for many governments will be how unwind this support.
A new IMF Global Policy Tracker has recorded nearly 900 policy measures introduced across about 170 countries since the beginning of the war, both in advanced and emerging and developing economies. Fiscal measures dominate the response with governments cushioning the impact of higher energy prices by limiting pass-through to consumers and firms.
The tracker illustrates an important pattern. The composition and sequencing of today’s policies broadly resemble those deployed during the 2022 energy shock. But for many countries, circumstances are not the same: debt service burdens are rising for many countries and fiscal space remains limited, amid an environment of heightened uncertainty and recurrent shocks. Also, the exposures and disruptions of the current energy shock differ from the previous shocks. Both make policy design more consequential.

One shock, different responses
Our new tracker shows that, in advanced economies, almost half of the measures are subsidies to energy producers and distributors. Another third are cuts to fuel excise taxes aimed at containing retail price increases. European countries, for example, have leaned heavily on fiscal and pricing measures to cushion households.
Meanwhile, emerging economies have deployed a more varied policy mix. In addition to fiscal measures, which account for around half of recorded policies, many have used price controls—such as fuel price caps or adjustments to pricing formulas—and other administrative interventions. In the Middle East and Central Asia, monetary and financial tools play a larger role, alongside fiscal expansion in oil-exporting economies. African countries rely more on pricing and supply-side measures, while parts of Asia have turned to demand management, including conservation and rationing. The Western Hemisphere region shows a more mixed approach.

Policy space also matters. Countries with higher levels of debt and heightened fiscal risks, including emerging market economies, have relied more on pricing measures and demand suppression, including through fuel rationing, mandated remote work, and travel restrictions.
A group of countries has taken a more fiscally sustainable yet politically difficult path: allowing administered prices to rise, scaling back subsidies, or suspending price-smoothing mechanisms. These choices preserve price signals and contain fiscal costs, but they also require strong safety nets (or new interventions, such as containing public transportation tariffs) to protect vulnerable households.
Noble, but potentially costly and risky intentions
The dominance of price containment policies reflects a common objective: to cushion households and firms from a sharp increase in energy costs. Yet a large share of measures described as temporary lack clear expiration dates or fiscal cost estimates. This is how interim support can become permanent: extended incrementally, difficult to unwind, and increasingly costly if prices remain elevated. It is just one of several risks:

Fiscal costs can escalate quickly. Broad-based subsidies and tax cuts are expensive, particularly when extended beyond the initial phase of a shock. Price caps by oil importing countries risk becoming impossible to finance if global fuel prices escalate further.
Costs do not disappear when they are not visible in standard government fiscal accounts. Pricing measures that compress margins—especially in state-owned energy companies—can generate losses that later surface as contingent liabilities on the public balance sheet.
More subtly, widespread suppression of price pass-through can weaken adjustment at the global level. When many countries simultaneously shield consumers, demand responds less, contributing to tighter markets and potentially higher global prices. Individually rational policies can collectively amplify the shock.
Finally, by spending more freely now, governments will limit their scope to take further action if, for example, we see an escalation of the conflict, more energy disruptions, or other shocks. The more fiscal space is used today on broad price support, the less remains available tomorrow to respond to new challenges.

Protect people, not prices
Energy shocks force policymakers to choose if adjustment happens via prices or is absorbed by budgets. The early responses so far show a clear preference for containing prices. That is understandable. But if sustained, it risks higher fiscal costs and distorted incentives, especially if energy prices eventually normalize.
The alternative is less politically palatable but more fiscally responsible and sustainable: allow prices to adjust and ensure fiscal interventions are temporary and targeted. Some countries are already moving in this direction. Others would be well advised to follow suit.
In an uncertain, shock-prone world, keeping powder dry matters as much as acting quickly. The principle remains simple: protect people, not prices.
 
 
Compliments of the International Monetary Fund The post IMF | The Energy Shock Is Testing Government Budgets first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Blog | This blog post is part of a special series based on the April 2026 Commodity Markets Outlook, a flagship report published by the World Bank. This series features concise summaries of commodity-specific sections extracted from the report.
Australian thermal coal prices reached $150/mt in early June, fueled by supply disruptions in China, export uncertainty in Indonesia, and rising summer electricity demand, before retreating sharply after the announcement of an end to military operations in the Middle East. Earlier in March, prices jumped about 20 percent (m/m), as the outbreak of conflict in the Middle East and the disruption of natural gas shipments pushed power generators toward coal. Prices stayed elevated through April and May as conflict in the Middle East persisted.

Global coal consumption edged up in 2025 (y/y), and demand is now set to hold firm in 2026 as conflict-driven energy disruptions reshape power generation. Last year’s gains were concentrated in Eurasia and the United States, where consumption expanded by 10 percent on stronger power demand tied partly to surging data-center activity and substitution away from costlier natural gas. In China and India, the two largest consumers, robust solar, wind, and hydropower generation held coal demand in check, while European Union demand edged down. In 2026, global thermal coal demand is projected to stay roughly flat, partly compensating for interrupted gas supplies from the Middle East. Increases are expected to center in China and, especially, India, where governments are turning to domestic coal to shore up energy security; U.S. consumption is seen holding steady after last year’s increase, while Europe’s continues to decline—though more slowly than before the conflict.

 
Global thermal coal supply was little changed in 2025, and production is set to decline by roughly 1 percent in 2026 while still meeting demand. Output gains in China, North America, and Eurasia last year offset cuts by Australia and Indonesia, the two main exporters. Notably, both China and India intensified efforts to substitute domestic production for imports to bolster energy security—a shift that may prove durable, leaving exporters to adjust to shrinking international demand. In 2026, Asia Pacific supply is expected to decline, mainly because of Indonesia’s lower production targets, while India’s output surges and China’s rises moderately in response to conflict-related trade disruptions. European production continues to shrink, while output in the United States holds steady. International coal trade is forecast to ease as Indonesia restrains the volumes available for export. Adding to supply-side pressure, diesel shortages and soaring diesel prices stemming from the Gulf conflict are lifting producer costs and, in extreme cases, capping output.

The Australian coal price is projected to rise 20 percent in 2026 (y/y) to average $130/mt before falling 12 percent in 2027, with risks to the forecast broadly balanced. The forecast assumes that conflict-related disruptions to Middle Eastern energy supply keep coal substituting for natural gas in power generation, particularly across Asia Pacific and Europe. Upside risks dominate the near term: extended delays in natural gas trade normalizing after the reopening of the Strait of Hormuz would prolong the surge in coal-fired generation, while broader-than-expected AI-driven electricity demand could bring underutilized coal plants back online in China and the United States. In that case, U.S. consumption could again exceed its assumed trend decline. The main downside risks run the other way: stronger-than-expected renewable generation—especially if the sharp rise in Chinese and Indian solar and wind output in 2025 continues—and any unexpected rebound in Indonesian exports would pull prices below the baseline.

Compliments of the World Bank The post World Bank | Coal’s Unexpected Comeback: Middle East Conflict Drives a Return to Coal Power first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

The European Commission published the fourth State of the Digital Decade report, showing that Europe has made progress on its 2030 digital transformation targets, such as secure and sustainable digital infrastructures and the digitalisation of public services – but the challenge now is delivering results at scale, speed and consistency.
The report comes as the Commission published the last Special Eurobarometer, showing that an overwhelming majority of Europeans rank digital policy as a top EU priority, firmly backing a more autonomous European digital future.
The Digital Decade Policy Programme serves as the EU’s strategic compass for advancing and investing in Europe’s digital competitiveness and sovereignty. The report evaluates progress made by the EU in its digitalisation across the board, including in critical infrastructures, digitalisation of business, digital skills, and digitalisation of public services. This year, the report goes beyond stocktaking, outlining priority reforms and investments at EU and Member States level in an attempt to guide digital funding allocations in the next EU Multiannual Financial Framework.
2026: progress and remaining gaps
The report shows that progress has been made in the following areas: with regard to the deployment of basic connectivity infrastructure, 96.8% of households now have basic 5G coverage. However, certain high-capacity bands and ‘Fibre-to-the-Premises’ deployment lag behind.
With regard to the basic adoption of advanced digital technologies by businesses, 46.7% of EU enterprises use cloud computing, 39.9% apply data analytics, and nearly 20% deploy artificial intelligence (adoption jumped by 48% in 2025 compared to the previous year). An example is in the healthcare sector, where it leads with AI-powered medical imaging, improving early detection, faster diagnoses, and better patient outcomes.
Finally, over 60% of Europeans now have at least basic digital skills.
Gaps do, however, remain. In the field of semiconductors the EU accounts for only 9% of the global semiconductor market – far from the 2030 target of 20%. The same can be said about computing capacity. While edge node deployment is on track to meet the 2030 Digital Decade target ahead of schedule, computing capacity still lags significantly behind demand.
Furthermore, despite significant progress in the domain of cybersecurity, Europe remains structurally dependent on non-EU cybersecurity suppliers, with European companies underrepresented in global cybersecurity leadership.
There is also a shortage in ICT skills. Specialists represented just 5% of employment in 2025 – half the 2030 target of 10%. Women accounted for under 20% of employed ICT specialists, a figure that has not changed since 2024, despite soaring demand – especially in cloud security, cybersecurity, data management and software development.
Finally, when it comes to advanced tech adoption, SMEs face persistent barriers in data, skills, integration and resources, making it harder for them to adopt and scale advanced digital solutions.
A Commission study shows that coordinated EU action in digital delivers high returns. Every €1 spent in digital policy under NextGenerationEU will generate €1.50 in economic output within the EU and €2 for the global economy as a whole (incl. the EU) until the end of 2030. This is far above the average in other policy areas. These investments in digital generate spillover effects both across borders and across sectors of the economy.
Recommendations: closing structural gaps and mobilising investments for 2030 and beyond
The report provides clear recommendations for both the EU and Member States to continue scaling efforts, in a time where nearly half of the public budget included in the Digital Decade national roadmaps will be phased out by 2026. To avoid stalling progress, the report urges to secure funding continuity post-2026 to bridge the gap, scale up successful projects (e.g. European Digital Infrastructure Consortia (EDICs), Important Projects of Common European Interest (IPCEIs) and strengthen EU-level coordination (e.g. through Multi-Country Projects) to prevent market fragmentation and uneven implementation.
Eurobarometer: Public support for EU’s digital policy
A Special Eurobarometer survey, conducted between February and March 2026, shows 79% of Europeans rank digital policy as a top EU priority in shaping the future. The Eurobarometer explores how citizens’ attitudes have evolved in a year marked by rapid technological change and intense policy debates on digital rights.
Citizens are firmly behind a more autonomous European digital future, prioritising investment in EU-developed infrastructure (85%) and reduced dependency on third-country technology (82%). 80% think it is important to make the EU a global leader in technological infrastructures. Furthermore, 58% of Europeans would switch to an EU provider even at a higher cost. The top five factors encouraging switching to an EU-based provider include: greater security and reliability (50%), better protection of personal data (49%), clearer rules and consumer protection (39%), reduced dependence on non-EU countries (33%), supporting the EU economy and competitiveness (30%).
Europeans believe that digital health (55%), green technologies (50%), faster connectivity (42%) and AI (39%) will have the most positive impact for the next decade.
Around four in ten citizens use generative AI at least weekly, and among those who do, nearly seven in ten report increased usage over the past year. 80% think the development of AI should be carefully regulated, even if it means AI developers face some constraints.
Concerns about the harmful use of digital technologies is widespread and increasing: 92% of citizens want stronger protection for children online, 87% agree that online manipulation (disinformation, deepfakes, AI-generated content, foreign interference) poses a threat to democracy, and feel personally impacted by fake news and disinformation (53%), misuse of personal data (47%) and insufficient minor protection on platforms (41%).
Next steps
Through the 2026 State of the Digital Decade report, the Commission calls on Member States to update their National Digital Decade Roadmaps with concrete measures, while ensuring stronger alignment with the next Multiannual Financial Framework, notably in the context of the preparation of the National and Regional Partnership Plans and the future EU Competitiveness Fund. The first discussions with Member States will take place at the Digital Day and Digital Decade Board meeting organised in Nicosia by the Cyprus Presidency of the Council of the EU on 18 and 19 June.
In 2027, the Commission will review the Digital Decade Policy Programme targets to ensure they reflect the adopted legislations, align with the changing digital landscape and fulfil the EU’s priorities and ambitions. The revision will modernise, simplify and extend the framework beyond 2030.
 
 
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On Tuesday, MEPs gave their final approval to two pieces of legislation implementing EU tariff commitments under the August 2025 EU-US joint statement.

Sunset clause: tariff preferences set to expire on 31 December 2029, unless renewed

Clear conditions set on tariff reductions on steel and aluminium derivatives

Safeguard mechanism to protect EU industry and agricultural sector

Sunset clause
The main regulation on industrial and agri-food imports will expire on 31 December 2029. By 30 June 2029, the Commission will make a comprehensive assessment of its trade effects on EU industry, agriculture and small and medium-sized enterprises, and of changes in trade patterns with third countries, accompanied by a legislative proposal to prolong the regulation’s duration, if appropriate.
Steel and aluminium derivatives
In August 2025, the US added 407 product categories to the list of derivative steel and aluminium products subject to tariffs. Parliament considered that these new tariffs increased the level of trade instability and pushed for this issue to be addressed in the main regulation. As a consequence of this, the Commission will now be able to suspend tariff preferences if by 31 December 2026 the US continues to apply a tariff rate higher than 15% on EU steel and aluminium derivatives. The Commission will report to the European Parliament and to the Council, by 1 December 2026, on the tariff treatment of steel and aluminium derivatives.
Strengthened suspension clause
The Commission will also be able to suspend tariff preferences if the United States fails to address the EU’s concerns regarding the tariff treatment of Union exports which until 24 February 2026 benefitted from the 15% all-inclusive tariff ceiling.
Safeguard mechanism
Parliament and Council also agreed to establish a safeguard mechanism should tariff preferences granted to the US lead to increases in imports that threaten to cause serious injury to EU industry, including the agricultural sector. The Commission will be able to start an investigation on its own initiative, or on the basis of information provided by one or more member states or by the European Parliament. The Commission will also report to the Parliament and the Council on a quarterly basis on changes in trade volumes and values of US exports of the goods covered by this legislation.
Quote
Bernd Lange (S&D, DE), International Trade Committee Chair and standing rapporteur for the US, said: “Despite the pressure, Parliament stood its ground throughout these negotiations. Our determination has paid off, delivering a stronger agreement for European businesses and citizens and far more robust guardrails than originally envisaged.”
“By translating the EU’s commitments in the joint statement into law, this regulation becomes part of the EU’s defensive toolbox: it not only strengthens and stabilises EU-US trade relations, but it also gives the EU the ability to respond if the United States fails to uphold its side of the bargain. Thanks to Parliament’s firm stance, the final text now contains a far stronger safety net, including a robust suspension clause, a sunset clause, a safeguard clause, enhanced review mechanisms and stronger democratic oversight.”
“Having the right tools are only half of the job. Political will is also needed. We will continue to closely watch the implementation of this agreement. If the US side breaches either the letter or the spirit of the Turnberry agreement, Parliament will insist that the Commission makes full and timely use of every instrument provided by this regulation and the wider EU toolkit. A stable and prosperous transatlantic partnership can only succeed if both sides remain committed to it.”
Next steps
Once approved by the Parliament, it will be the Council’s turn to formally approve the agreed texts. The new legislation will then enter into force on the day after its publication in the EU’s Official Journal.
Background
On 27 July 2025, in Turnberry, Scotland, US President Donald Trump and European Commission President Ursula von der Leyen reached a deal on tariff and trade issues, outlined in a joint statement. On 28 August 2025, the Commission published two legislative proposals aimed at implementing the tariff-related aspects of the statement.
 
 
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