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It has long been thought that a monetary union can only function well if its governance imposes extra fiscal discipline on the member countries of the union. I argue that the arguments for extra fiscal discipline in a monetary union are weak. The current Stability and Growth Pact (SGP) is broken. It has incredible complexity that has been built in over the years when it became clear that fiscal discipline based on the use of numerical targets does not work. As a result, it has lost credibility as a way to organize fiscal discipline. There is an urgent need of reform of the fiscal rules embedded in the SGP.
In this paper I contribute to the debate by developing the principles that should guide this reform of the fiscal rules in the Eurozone. These principles are that the numerical targets should be replaced by sustainability analyses of each member countries’ budget and debt prospects. In addition, I argue that the reforms should prioritize public investments by making it possible for the latter to be financed by issuing debt. Finally, I argue that any fiscal sustainability governance should be integrated with the ECB’s policies regarding its holdings of government bonds. Decisions by the ECB to sell or not to sell these bonds affect the sustainability of public debts of the member countries of the union.
This brief aims to provide an analysis of the use of the Next Generation funds to achieve sustainable water management. To this end, the Spanish Government has drafted the Recovery, Transformation and Resilience Plan (RTRP). The document emphasizes the key role of water in the maintenance and restoration of good ecological status. The idea is based on the fact that environment-friendly water management is needed that guarantees the resource and the ecosystem services it provides. Therefore, for the future, integrated management of water in all its forms (inland, ground, fresh, brackish, transitional and coastal waters) is necessary. It is also crucial to take into consideration the relationship between aquatic systems and the land ecosystems that depend on them. This approach is proposed by Directive 2000/60/EC of the European Parliament and of the Council, of 23rd October 2000, establishing a framework for Community action in the field of water policy, known as the Water Framework Directive (WFD), approved over two decades ago.
The response to the COVID-19 crisis may mark aqualitatively significant step towards accelerating the process of European integration. The battle is obviously not yet over and several obstacles still lay ahead. However, while the EU’s response to the turmoil caused by the Great Recession initially led to a step backwards, the response to the COVID-19 crisis is encouraging. As we have seen, it has paved the way for considerable progress towards fiscal union, with respect to the three pillars on which such a union is based: an EU budge tworthy of the name, a set of resources obtained directly in the form of taxes paid by citizens, and a treasury with the power to issue debt. The EU’s response to the pandemic may also facilitate a step towards the capital markets union, in so far as a new incontestable safeasset will come into circulation,in the form of bonds issued by the Commission. It also reinforces the role of the Commission and the Parliament, to the detriment of intergovernmental agreements. Most importantly, the EU’s response constitutes an unequivocal demonstration of the will to face adversities collectively.
Authors: Ángel Berges, Emilio Ontiveros y Ricardo Pedraz
Date Posted: april 2019
Tipo de archivo: pdf
El Policy Brief number 14 of europeG: "Climate change imposes a cost on future generations that the current generation has no direct incentive to fix, giving shape to what Mark Carney, President of the Financial Stability Board (FSB) and Governor of the Bank of England, has called the “Tragedy of the Horizon”. To address this paradox, and above all to engender the necessary incentives, what better course of action than to have the financial markets put a price on the objectives and commitments agreed to at the Paris Summit? However, to reach this point, providing greater information transparency has first to be achieved. And there are, unquestionably, major information deficiencies in the case of climate-related financial risks."
Authors: Rafael Myro (UCM) and Europe G
Date Posted: June 2018
File Type: pdf
Policy Brief number 13 of EuropeG focuses on: “Economic growth with an external trade balance: A new scenario for the Spanish economy”. By year-end 2017, the Spanish economy had posted three consecutive years of growth at a rate of more than 3% per annum while recording significant surpluses both in its current and capital account balances and in its balance of foreign trade in goods and services, the latter showing a tendency to increase in real terms. More significantly, the trade in goods deficit, a characteristic feature of Spain’s foreign accounts, is currently the lowest it has been in fifty years, equivalent to 1.9% of GDP in terms of current values.
Authors: Europe G
Date Posted: November 2017
File Type: pdf
Policy Brief number 12 of EuropeG focuses on "Size and productivity of the Spanish company, the forgotten resource of the quality of management". Its authors Emilio Huerta (Public University of Navarra), and Vicente Salas (University of Zaragoza) analyze the reality of SMEs in Spain, compare it with other countries of the European Union and conclude with the recommendation that productivity should star in the debate on growth and the business dimension.
Authors: Europe G
Date Posted: June 2017
File Type: pdf
This document, elaborated by the economist Santiago Carbó, discusses in detail the banking union implementation framework in this first stage. Furthermore, compares its different application in Spain and Italy, while revealing other weaknesses related to the very environment of the European banking union, the absence of the deposit protection scheme and the emergence of the fintech competition.
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Authors: Europe G
Date Posted: March 2017
File Type: pdf
EuropeG's Policy Brief number 10 was prepared by Martí Parellada, a member of EuropeG and Luis Sanz Menéndez, a CSIC researcher at the Institute of Public Goods and Policies, entitled "The whys and wherefores of R&D+I policy. The situation in Spain". It analyses in detail the impact of the crisis on investment in Research, Development and Innovation in the global and European context and asks what should be the applicable reforms so that the Spanish economy reaches at least the objective marked by the Spanish Government, of devoting 2% of GDP to R&D in 2020.
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Authors: Europe G
Date Posted: September, 2016
File Type: pdf
This Policy Brief is focus on two highly relevant issues: First, the role of international confidence in Spain’s ongoing recovery and, thus, indirectly, the role of internal reforms, specifically those affecting the governance of the euro and the activity of the ECB. In fact, this radical shift can be identified as the hinge that separates the second recession (2011-2013) from the growth stage (2014-2016), a diagnosis for which there is already broad consensus (European Commission, 2016c). Second, we examine the role being played by domestic and foreign debt in the recovery, given their importance in the origin of the problems underlying the euro crisis (European Commission, 2016A).
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Authors: Europe G
Date Posted: May 5, 2016
File Type: pdf
This policy brief offers a description of the changes that the banking systems of the eurozone have been exposed to in recent years in terms of both their structure and regulatory framework, with particular attention to the European banking union, the most important project to have been initiated in the last thirty years. It then analyses the basic features that characterise these systems today and identifies the main challenges they face in the immediate future.
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Authors: Europe G
Date Posted: September, 2015
File Type: pdf
The Great Recession has revealed, firstly, that fiscal stabilising instruments remain essential and, secondly, that these must be set up at eurozone level, given their limitations at national level. It is the absence of such stabilising instruments that accounts in part for the severity of the austerity policies applied in some countries. The creation of this European stabilising instrument is a priority issue, after the experience to the Great Recession, and its implementation could be a very significant first step towards a genuine fiscal union.
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Authors: Europe G
Date Posted: November 12, 2014
File Type: pdf
The Banking Union must overcome the risks of perverse link between sovereign debt and banking stability so that taxpayers do not return to bear most of the costs of banking crises.
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Authors: Europe G
Date Posted: May 7, 2014
File Type: pdf
The Spanish economy is emerging from the tunnel of the second recession. The external financing situation has improved substantially, and the forecasts for activity and employment anticipate a new cycle, although its strength remains to be seen.
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Authors: Europe G
Date Posted: December 2, 2013
File Type: pdf
Structural reforms are essential to ensure the competitiveness of the Spanish economy. Among them, the reform of university legislation to promote excellence, competitiveness and internationalization of the university system plays a key role.
Authors: Europe G
Date Posted: December 16, 2012
File Type: pdf
The euro crisis has put progress toward a fiscal union at the centre of the European debate. At first reluctantly, then ever more clearly, a fundamental consensus seems to have been reached on the need to move toward this fiscal union and on the idea that there will be no monetary union if it is not accompanied by fiscal union.
Authors: Europe G
Date Posted: July 10, 2012
File Type: pdf
The Spanish economy is immersed in a crisis which reflects the various effects of a series of shocks which have altered the behaviour of the supply and demand factors which drove Spanish GDP growth in previous years.
Authors: Europe G
Date Posted: March 15, 2012
File Type: pdf
The current eurozone crisis is the main threat to monetary union, to the single market itself and, probably, to the global economy as a whole.
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