Friday, 17 December 2021
Hello Future is blue readers,
Today we are continuing our discussion about what is one of the most challenging policy issues of our time. We’re referring to the need of a new fiscal approach in the EU, to make sure Europe recovers in good shape, transitioning towards a green economy while gradually consolidating public deficits.
In previous episodes, we discussed this topic with MEP Jonas Fernandez and, more recently, with LSE professor Paul De Grauwe. This time Guntram B. Wolff, the Director of Bruegel think tank, has joined our latest podcast, together with Raymond Torres, Funcas Europe Director, and Carlos Carnicero Urabayen, Future is blue editorial coordinator. More details below.
See at the end, as usual, what we are reading these days.
This is our last newsletter of the year. We will come back in January with more exciting stories about Europe’s key economic challenges.
New podcast available!
The goal to cut greenhouse gas emissions by at least 55% before the end of the decade will need a boost in public spending of around €100 billion per year. This is a big number, particularly if we think about the current context where we are leaving a crisis that has left public finances with high levels of debt. One way or another, green investment will need to be protected along the fiscal consolidation path.
The EU should put in place a “green fiscal pact” based on a “green golden rule” that would exclude net public contributions in climate protection from deficit and debt calculations under the new fiscal rules, argued Guntram B. Wolff in our latest podcast.
Don’t miss our last conversation of the year where analyse the policy frameworks that would work best, the appetite of EU policymakers for a green exception and what kind of signals we are getting so far from the freshly formed government in Berlin.
What we are reading
Inflation ideology: camp permanent or camp temporary?
Policy focus should be on tackling uncertainties by being able to tackle as many scenarios as possible.
The cost of Brexit
In October 2021, UK goods trade was 15.7 per cent, or £12.6 billion, lower than it would have been if the UK had stayed in the EU’s single market and customs union.
A divide in responses to the inflation threat
US, UK and eurozone central banks adopt varying but reasonable approaches.
GDP’s days are numbered
Economists and statisticians are developing alternative wealth and well-being approaches to measuring economic success.
Happy holidays and all the best for 2022
Funcas Europe Director