EU Budget & Public Investment

By international comparison as well as compared to other EU policies, the EU’s Cohesion Policy evaluation system is far developed and institutionalized. This report analyses the remaining gaps and shortcomings in the Cohesion Policy evaluation system against principles established by the OECD and others and provides recommendations on how to further improve it.

A joint energy and climate action policy could save European countries EUR 248 billion by 2050. This is the result of a study simulating different scenarios. In the worst-case scenario, the total costs could reach EUR 8.629 trillion.

The EU faces the challenge to combine large and sustained investments to promote the transition towards a green, digital, and competitive Europe while maintaining fiscal sustainability. Based on a comprehensive literature review on the effects of fiscal rules and investment clauses on public finances, this in-depth analysis provides some guidance how higher public investments can be achieved by a targeted golden rule without harming fiscal sustainability in the EU fiscal framework. The study also discusses the role of investments in the current proposals of the European Commission on the reform of the EU Economic Governance.

The war in Ukraine is not over yet. Nevertheless, a possible roadmap and proposals for post-war reconstruction strategies are currently being discussed. They should be accompanied by economic and political reforms in the country. To finance this project, Ukraine will need to tap a variety of sources and institutions. This is because it will require investments in the hundreds of billions ‒ perhaps even trillions ‒ of US dollars. The EU, the US and other Western countries have signaled their willingness to provide further financial support for postwar reconstruction. Also potentially involved could be bilateral donors, multilateral banks, private investors, and the Russian state with reparations.

Persistently low interest rates on government debt over past decades have prompted some economists to question the wisdom of fiscal policies that restrict the use of deficits to finance government spending. In the new EconPol Policy Brief Bev Dahlby and Ergete Ferede argue that the widely held view that there is no, or only a low, fiscal cost from debt-financed increases in program spending can be misleading.