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According to the Centre for European Reform, the grid also needs one-third more interconnectors to allow renewable energy to flow from windy or sunny areas and help the bloc advance its overall transition. 

The Centre for European Reform think-tank has suggested that the reset would raise GDP by only about 0.3 per cent in the long run.

« Merz a décidé de réengager l’Allemagne sur la scène européenne. Il a besoin de von der Leyen pour pousser à Bruxelles son agenda économique allemand », souligne Sander Tordoir, économiste au Centre for European Reform, à Berlin. 

Sander Tordoir, chief economist at the Centre for European Reform, welcomed the return of subsidies for electric and hybrid vehicles, which will include a "local content" requirement, expected to ease pressure on the beleaguered automotive industry. "Starting by stimulating consumption, in a situation where both domestic and external demand are very weak, is not a bad idea, even if it is not as effective in the long run as investing in infrastructure or education," he said.

“Germany has historically lacked a comparative advantage in services and resisted integration for fear of competition from countries stronger in this area,” said Sander Tordoir, chief economist at the Centre for European Reform. “In the long run, Germany too would benefit from deeper capital and services markets, but in the short run, integration means more competition and disruption.”

Ian Bond, director of foreign policy at the Centre for European Reform, said Putin has shown no interest in compromise. Bond predicted that Trump’s envoy will hear in Moscow that the proposal is merely “a good starting point” but that the “root causes” of the conflict need addressing — meaning, in Putin’s view, Ukraine’s sovereignty and right to make independent foreign and security policy choices.