This view is traditionally associated with the economic historian Charles P. Kindleberger. His 1973 book, The World in Depression 1929–1939, proved a catalyst for what eventually became known as hegemonic stability theory. For a brief discussion, see The Economist (2013), “Railroads and hegemons”, 10 October. 4. Georgieva, K. (2023), “Confronting Fragmentation Where It Matters Most: Trade, Debt, and Climate Action”, 16 January. See also Aiyar, S. et al. (2023), “Geoeconomic Fragmentation and the Future of Multilateralism”, IMF Staff Discussion Notes, SDN/ 2023/001, 15 January. 5. The White House (2022), “Fact sheet: How the Inflation Reduction Act Will Help Small Businesses”, 12 September. 6. For example, one recent survey finds that the share of firms planning to regionalise their supply chain rose from 25% in April 2021 to 45% in April 2022. See McKinsey (2022), “Taking the pulse of shifting supply chains”, 26 August. 7. International Energy Agency (2022), “The Role of Critical Minerals in Clean Energy Transitions”, World Energy Outlook Special Report, Revised Version, March. 8. Macron, E. and Scholz, O. (2023), “Deutschland und Frankreich – Unser Europa für die nächste Generation gestalten”, Frankfurter Allgemeine Zeitung, 22 January. 9. European Commission, “EU position in world trade”. 10. European Commission (2021), “Strategy for Financing the Transition to a Sustainable Economy”, COM/2021/390 final, 6 July. 11. World Economic Forum (2022), “Digital solutions can reduce global emissions by up to 20%”, 23 May. 12. De Haas, R. and Popov, A. (2019), “Finance and carbon emissions”, Working Paper Series, No 2318, ECB, September; Popov, A.

(2020b), “When markets fail – the need for collective action in tackling climate change”, 28 September; Schnabel, I. (2021a), op. cit. 33. Economic theory shows that when economic agents fail to internalise the full cost of their individual actions and/or there are informational frictions that prevent them from adequately pricing assets, market forces lead to a suboptimal allocation of resources. 34. Article 127(1) of the TFEU forms the basis for the primary and secondary mandates of the ECB. Primary mandate: “The primary objective of the European System of Central Banks (hereinafter referred to as ‘the ESCB’) shall be to maintain price stability.” Secondary mandate: “Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union as laid down in Article 3 of the Treaty on  European Union.” In addition, “The ESCB shall act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources.” 35. See Lipsey, R.G. and Lancaster, K. (1956), “The general theory of second best”, The Review of Economic Studies, Vol. 24, No 1, pp. 11–32. 36. See Papoutsi, M., Piazzesi, M. and Schneider, M., (2021), “How unconventional is green monetary policy”, Working Paper. 37. See Schnabel, I. (2021a), op. cit. 38. See Greenpeace (2021), “Greening the Eurosystem collateral framework”, March. The executive director of Greenpeace International, Jennifer Morgan, has also recently argued in favour of exclusion policies.