Newsletter: Making fiscal rules friendly to public investment
Friday, 10 December 2021
Hello Future is blue readers,
You may recall that recently we started a debate about the need to reform the EU´s fiscal rules and we shared a podcast featuring MEP Jonás Fernández. This week we are revisiting the topic with concrete ideas on how the new rules should actually take shape.
We’ve reached out to Paul De Grauwe, John Paulson Chair in European Political Economy at the European Institute in LSE. Paul is featured in this week's podcast, together with Raymond Torres, Funcas Europe Director, and Carlos Carnicero Urabayen, Future is blue editorial coordinator. More info on the podcast below.
At the end of this email, you can see as usual the readings that are capturing our attention this week.
New podcast available!
Mario Draghi has said that the reform of the current fiscal rules is "inevitable". We couldn't agree more. A new pact is needed to preserve recovery, gradually consolidate public debt levels while protecting public investment, particularly green investment.
A recent Bruegel paper estimates that public spending will need to increase by some 100 billion euros per year if Europe is to accomplish its goals for advancing towards a net zero carbon economy. Furthermore, recent energy prices are adding extra pressure on the need to invest in green technologies. If there's not a new framework, green and other critical productive investments will most likely be cut short.
Don't miss our new podcast, including some concrete proposals from Paul de Grauwe and Raymond Torres on how EU policymakers can build trust around common rules to equip Europe with the policy framework it needs for a post pandemic world.
What we are reading
What is the great resignation? An expert explains
Good overview by Isabell Welpe explaining what we can learn from this recent trend in the workforce.
An inclusive European Union must boost gig workers’ rights
A European initiative strengthening rights for gig workers is welcome. A digitised economy should also be inclusive.
The EU needs a permanent recovery fund
Good arguments to see the RRF becoming permanent, with a focus on climate investment to ensure the EU meets its carbon neutrality goal by 2050.
The climate won’t wait. We need a carbon tax now
Compelling piece by FT´s Tim Harford about taxing carbon, including concrete proposals.
Have a nice rest of the week!
Raymond Torres, Funcas Europe Director