The European Union post COVID-19: Preserving innovation's cutting edge and fostering social cohesion

Marco Buti and Istvan P Szekely
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Marco Buti: Staff of the Commissioner for the Economy, European Commission, Brussels, Belgium

Acta Oeconomica, 2021, vol. 71, issue supplement1, 141-163

Abstract: Despite a long period of post-crisis recovery, the COVID crisis caught the EU in a precarious state. The policy and institutional innovations during the financial crisis tempered the macroeconomic imbalances that had caused the crisis. Nevertheless, the EU was left with a strong trend of divergence in economic and social performance because of the lack of sufficiently strong reforms at EU and national levels. But the lessons of the previous crisis were learned. This time around, the EU-level policy and institutional innovations were decisive. The fiscal capacities of the hard-hit countries were strengthened quickly. Green and digital transformation will require a major new wave of innovation in the corporate sector in the EU. This, in turn, critically hinges on improving the quality of public and private institutions and advancing with the implementation of major reforms at the EU level, such as the digital single market or Capital Market Union. Implementing these reforms fully, and preventing later reversals is a key to stemming the trend of economic and social divergence, thus strengthening the coherence of the EU.

Keywords: COVID-crisis; European Union; Next Generation EU; twin transitions; cohesion (search for similar items in EconPapers)
JEL-codes: E10 F02 O30 Q56 (search for similar items in EconPapers)
Date: 2021
Note: The views expressed are solely those of the authors and do not necessarily represent the official views of the European Commission.
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