EU policies

Barbara Baarsma, Roel Beetsma, 18 January 2022

An important vulnerability of the EU economy is high public debt levels. This column proposes revisions to the EU fiscal rules to stimulate debt reduction, which would create budgetary room for stabilisation and growth-promoting spending and also support growth convergence among member states. Climate investment should not interfere with the fiscal rules but be financed through an EU fund, in line with the idea of subsidiarity. It should co-exist with uniform pricing of all greenhouse gas emissions.

Leonardo D'Amico, Francesco Giavazzi, Veronica Guerrieri, Guido Lorenzoni, Charles-Henri Weymuller, 15 January 2022

In January 2023, the escape clause triggered to suspend the rules of the Stability and Growth Pact will expire, possibly forcing painful fiscal adjustments in countries that are already struggling with the impact of the pandemic. In this second column in a two-part series, the authors focus on the debt management aspect of their proposal to strengthen the European fiscal framework. They argue for moving a portion of national debts under the umbrella of a European Debt Management Agency, with the aim of reducing debt costs for the whole Union and helping the operations of the ECB in debt markets.

Leonardo D'Amico, Francesco Giavazzi, Veronica Guerrieri, Guido Lorenzoni, Charles-Henri Weymuller, 14 January 2022

Over the last few years, there has been a growing consensus that the current rules of the Stability and Growth Pact are outdated, too complicated, and not countercyclical enough. The authors of this column present a proposal to strengthen the European fiscal framework based on two elements: a revision of the fiscal rules, and a plan to create a European Debt Agency to absorb the debt accumulated during the pandemic. This first of two parts focuses on the fiscal rules and proposes setting a ceiling on the growth rate of primary spending, to be revised over three-year intervals, targeting debt reduction over a ten-year horizon.

Pauline Affeldt, Tomaso Duso, Klaus Gugler, Joanna Piechucka, 10 January 2022

The majority of large horizontal mergers are unconditionally cleared by antitrust authorities. Since most horizontal mergers generate incentives to increase prices and/or reduce output, the presumption seems to be that the resulting efficiencies must be sizeable to make them good for consumers. This column uses a novel database covering over 1,000 mergers scrutinised by the European Commission and shows that, under certain assumptions, compensating efficiencies appear too large to be achievable for a large part of the mergers in the sample. The Commission's view on required efficiencies might have been too optimistic and it appears to have been too lax in enforcing its merger policy.

Timothy Hatton, 17 December 2021

Refugees from conflicts in Yemen, Syria, Iraq, and many other countries travel thousands of miles seeking a new life in Europe. But how likely are these refugees to be recognised as asylum seekers, and does it matter in which country they apply? Tim Hatton tells Tim Phillips that, despite efforts to standardise the process of granting asylum, there are still big differences in recognition rates across Europe.

Download the free DP:
Hatton, T. 2021. 'Asylum Recognition Rates in Europe: Persecution, Policies and Performance'. CEPR

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