News Archive

The functioning of the Eurozone was irreversibly transformed by the European debt crisis and now, as a consequence of the Covid-19 pandemic, a new and even more devastating crisis has hit the EU. German Chancellor Angela Merkel has abandoned her opposition to substantial intercountry transfers and any form of debt mutualization, a turnaround motivated by the exceptional circumstances brought about by the pandemic.

The EU should receive a new source of funding in the form of revenue from the European emissions trading system (ETS), say Clemens Fuest, president of the ifo Institute and speaker for EconPol Europe, and Jean Pisani-Ferry, French economist and the founding director of the Bruegel think tank. Their joint paper was presented to the EU Economic and Financial Affairs Council (ECOFIN) in Berlin on 11 September. In it, they recommend that revenue from the ETS be used to finance the EU fund for economic recovery (Next Generation EU), which was adopted in July.

The corona pandemic has created a health and economic crisis without modern parallel: as it hit countries ill-prepared and spread quickly within the EU, member states had to adopt more interventionist approaches than ever before – particularly in the areas of fiscal and monetary policy, but also labor markets, redistribution mechanisms, and industrial policy. Finding a compromise as to which measures are suitable to save the Union is the subject of emotional debate.

Improving the economic and social integration of immigrants should be prioritized along with economic and health policies to prevent a rise in far-right parties in the wake of the Covid-19 crisis, as the economic downturn caused by the pandemic and the increased economic insecurity of large numbers of the population could lead to xenophobic reactions and rejection of immigrants.

The corona pandemic has created a health and economic crisis without modern parallel: as it hit affected countries ill-prepared and spread quickly within the EU, member states had to adopt more interventionist approaches than ever before – particularly in the areas of fiscal and monetary policy, labor markets and redistribution, and industrial policy. EU member states started controversial discussions about how to support those that were hit particularly hard.