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Europe's debate on fiscal policy: too much yet too little. CEPS Policy Insights

Messori, Marcello. (2020) Europe's debate on fiscal policy: too much yet too little. CEPS Policy Insights. [Policy Paper]

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    The initiatives taken by the ECB in mid-March 2020 flatten the structure of interest rates and ensure short-term sustainability for the EMU countries with high government debt/GDP ratios. But the challenges posed by the pandemic require a huge amount of public spending and therefore threaten this sustainability in the long term. This paper proposes ‘contractual arrangements’ between high-debt countries and European institutions, namely the Commission and the ESM as financial donor, which transfer grants (a ‘gift’) to high-debt countries to cover the national public expenditures resulting from the impact of the pandemic. In exchange, the beneficiary countries would share the design and implementation of these public expenditures with the European institutions, thereby giving up a portion of their fiscal sovereignty.

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    Item Type: Policy Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > fiscal policy
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Policy Insights
    Depositing User: Daniel Pennell
    Official EU Document: No
    Language: English
    Date Deposited: 25 Apr 2020 16:45
    Number of Pages: 9
    Last Modified: 25 Apr 2020 16:45

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