EU institutions

Marco Buti, Oscar Polli, 11 February 2021

The Recovery and Resilience Facility is at the heart of Next Generation EU, Europe’s plan to tackle the economic fall out of the pandemic crisis. Member states must prepare national plans to receive the EU contributions. These plans include the investment and reform projects as well as their implementation mechanisms. This column uses the veto players’ theory to explain and predict the governance arrangements chosen by EU countries. It shows that the institutional features of countries and the internal cohesion of governments are important determinants of the governance of Recovery and Resilience Programmes.

Luis Garicano, 17 December 2020

Without completion of the Banking Union, Europe’s Economic and Monetary Union will continue to be fragile and exposed to a return of the doom loop. This column provides a politically and economically viable solution based on first, creating a model ‘Safe Portfolio’ and, through a reform of the regulatory treatment of sovereign exposures, incentivising banks to move towards it; and second, reforming the resolution framework to empower the Single Resolution Board while simultaneously setting up, within it, a European deposit insurance based on the emerging consensus around a ‘hybrid model’.

Stefano Borgioli, Carl-Wolfram Horn, Urszula Kochanska, Philippe Molitor, Francesco Paolo Mongelli, Eva Mulder, Alessandro Zito, 03 December 2020

The COVID-19 shock is unprecedented in terms of the scale and speed of its effects. This column provides an overview of financial fragmentation in the euro area during the crisis through the lens of a novel high-frequency composite indicator. It reveals that after an initial sharp deterioration, euro area financial integration broadly recovered to pre-crisis levels by mid-September, thanks to unprecedented fiscal, monetary and prudential policy responses.

Ethan Ilzetzki, 16 November 2020

The ECB is in the process of reviewing its monetary policy strategy. This column presents the latest CfM-CEPR survey, which reveals that a majority of panel members support allowing inflation to exceed 2% following periods when inflation has been below target and making more explicit its secondary objective of supporting economic growth and full employment. Only a minority support increasing the inflation target itself. 

Olivier Blanchard, 06 November 2020

The EU's increasingly complex system of fiscal rules should be replaced by a system of fiscal standards instead, Olivier Blanchard tells Tim Phillips.

You can watch the recording of Olivier presenting his paper on Fiscal Standards for Europe at the 72nd Economic Policy Journal Panel Meeting here

The full paper, Redesigning the EU Fiscal Rules: From Rules to Standards by Olivier Blanchard, Alvaro Leandro and Jeromin Zettelmeyer, can be downloaded here

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