Philippe Martin, Lucrezia Reichlin, 01 March 2022

What are the economic imperatives and legal hurdles for reform? A new CEPR Policy Insight identifies the fault lines in the EU framework and suggests what can be done economically and legally to repair them.

Read more about this research and download the Policy Insight:
M. Maduro, P. Martin, JC Piris, J. Pisani-Ferry, L. Reichlin, A. Steinbach, B. Weder di Mauro, Revisiting the EU framework: Economic necessities and legal options, CEPR Policy Insight No 114.

Marco Buti, 23 November 2021

The policy response to Covid-19 in Europe avoided mistakes made a decade earlier. But what should the fiscal and monetary policy framework be after the pandemic? Marco Buti, author of a new CEPR policy insight on this topic and the book The Man Inside about how Europe coped with recent crises, talks to Tim Phillips.

Download the CEPR policy insight: 

Buti, M and Messori, M, Euro area policy mix: From horizontal to vertical coordination, CEPR Policy Insight No 113.

Register for the launch of the book The Man Inside: A European Journey through Two Crises, Wednesday 24 November 2021, 16:00 GMT

Fabio Canova, Evi Pappa, 09 November 2021

In light of last year’s launch of the Next Generation EU funds, understanding the effectiveness of the EU’s use of structural funding has become even more important. This column examines the role of the European Regional Development Fund and the European Social Fund over time. While both have contributed to job creation and economic recovery, the former had a more short-term direct effect and the latter a more medium- to long-term indirect impact. There is significant regional heterogeneity in these impacts, driven by location, level of development, EU tenure, and euro area membership.

Maarten Verwey, Allen Monks, 21 October 2021

On 19 October 2021, the European Commission adopted a Communication relaunching the public consultation on the EU’s economic governance framework. This consultation had been put on hold in March 2020 in order to focus on the Covid-19 pandemic. The Commission communication assesses the implications of the changed circumstances for economic governance following the COVID-19 crisis and sets out additional questions for the public debate. All stakeholders are invited to engage in the debate, which must be wide-ranging and inclusive to build a consensus on the way forward well in time for 2023.

Marco Buti, Marcello Messori, 13 October 2021

The way European policymakers solve the policy mix trilemma of asymmetric fiscal rules, no central fiscal capacity and constrained monetary policy in the post-pandemic economy will define the resilience of the euro area in the face of future shocks and the transition to a more sustainable growth model. In a new CEPR Policy Insight, the authors argue that moving to a structured vertical coordination between national and EU budgets would help ensure an adequate fiscal stance and avoid the overburdening of the single monetary policy.    

Géraldine Mahieu, Philipp Pfeiffer, Janos Varga, Jan in 't Veld, 04 August 2021

Next Generation EU is an unprecedented tool that provides significant financial support for reforms and investment, resulting in a coordinated fiscal expansion across the EU. This column quantifies the effects of the additional investment expenditure for each member state by extending a standard macro model with a rich trade structure. The model suggests Next Generation EU investment can boost GDP by up to 1.5%, and that the effects are around one-third larger when explicitly accounting for the spillover effects from individual-country measures. A simple aggregation of the national effects of individual investment plans would thus substantially underestimate the growth effects of Next Generation EU.

Debora Revoltella, Rolf Strauch, 24 May 2021

Jump-starting investment after Covid-19 is a crucial challenge for the sustainability of the recovery. This column highlights that incentives to re-launch investment remain crucial. Viable and new firms need to have access to additional new financing as we emerge from the crisis. Debt finance cannot be the only option. Incentives for recapitalisation of companies and access to equity or equity-type finance become increasingly important. The legacies of the pandemic in the financial sector need to be worked out quickly. European and government support complementing post-pandemic bank and capital market financing will be critical to a strong and sustained recovery. 

George Papaconstantinou, 23 April 2021

Europe has struggled through two crises in the last decade, but this time its response has been much more decisive and ambitious. George Papaconstantinou tells Tim Phillips why Covid-19 may be the catalyst for deeper EU integration.

You can download CEPR Policy Insight 109: Reshaping economic policy in the EU in the post-Covid world, by Marco Buti and George Papaconstantinou, here

Marco Buti, George Papaconstantinou, 23 April 2021

Most of the discussion on the economic policy response to the pandemic in Europe has centred on its ambition, tools, and institutional characteristics. Less discussion has taken place on the factors shaping EU integration and economic policy priorities after the pandemic. In a new CEPR Policy Insight, the authors argue that four sets of issues will be important in shaping the legacy of the pandemic for European integration: redefining the new boundaries between state and market; revisiting the nature of subsidiarity; reconnecting the EU domestic with the global agenda; and learning to respond to longer term structural shifts.

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.

Roel Beetsma, Lorenzo Codogno, Paul van den Noord, 09 November 2020

Björn Bremer, Theresa Kuhn, Maurits J. Meijers, Francesco Nicoli, 04 November 2020

Concerns about a populist, Eurosceptic backlash have long been an obstacle to the fiscal integration of the EU. This column uses a new survey fielded in five countries – France, Germany, Italy, the Netherlands, and Spain – to measure the validity of those concerns. The results suggest that support for a joint European fiscal instrument is high; that the pandemic recovery plan agreed under ‘Next Generation EU’ is a well-tailored instrument; and that making the recovery fund permanent would provide a path to political sustainability and garner widespread support among European citizens.

Thorsten Beck, 27 July 2020

Maarten Verwey, Sven Langedijk, Robert Kuenzel, 09 June 2020

As Member States start to ease restrictions linked to the COVID-19 pandemic on citizens and businesses, EU leaders and institutions have turned their attention towards the medium-term recovery of their economies. In late May, the Commission presented its proposals for a recovery plan. This column provides a brief overview of the economic rationale for collective action and an assessment of the expected impact of the recovery plan proposed by the Commission.

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