Leading Economists Propose a Stronger EU role in the Provision of Public Goods

Economists Clemens Fuest (EconPol Europe and ifo) and Jean Pisani-Ferry (European University Institute and Breugel) have called for the EU to reorganize the division of labor between the national and European levels and provide more public goods in areas where European provision is cheaper and more effective than provision at the national level.

The proposals were presented to French and German finance ministers Bruno Le Maire and Olaf Scholz in Brussels today, in a paper published by research network EconPol Europe.

The two economists see advantages for a stronger EU role in several policy areas: external economic relations, the fight against climate change, digital sovereignty, research and development of large and high-risk projects, development cooperation and financial aid for third countries, migration policy and the protection of refugees, foreign policy and representation abroad, and the procurement of armaments and defense.

One proposal is to introduce a European border management system, a common right of asylum and procedures for the distribution of asylum seekers and the repatriation of people without asylum rights. The EU should also cooperate more closely in foreign and security policy and development policy and develop common strategies, say Fuest and Pisani-Ferry. The European Council should also be given the right to block, by a qualified majority, foreign investments in an EU country that pose a threat to European security.

The economists also propose that Germany and France should establish a joint agency and research institute for cyber security, with a joint fund to promote fundamental innovation that could later be extended to other countries. A joint defense initiative would have the aim of developing joint armed forces and procuring joint weapons systems.

Text: A Primer on Developing European Public Goods, by Clemens Fuest and Jean Pisani-Ferry, EconPol Policy Report No. 16, November 2019