Assessing Next Generation EU
Lorenzo Codogno and
Paul Van den Noord
LEQS – LSE 'Europe in Question' Discussion Paper Series from European Institute, LSE
The unprecedented fiscal package adopted by the European Council in the summer of 2020 ―dubbed Next Generation EU―is vital for the recovery of the euro area from the pandemic shock. However, there are risks that targets will not be met and that it may prove difficult to muster the same degree of European ‘solidarity’ in the future. Computations with a stylised macroeconomic model indicate that an alternative approach, with ex ante risk sharing through the creation of a Eurobond and permanent fiscal capacity at the centre, would be at least as powerful, yet it would be more sustainable, automatic and timely.
Keywords: Fiscal Policy; Business fluctuations; Safe sovereign assests; Fiscal capacity (search for similar items in EconPapers)
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Chapter: Assessing Next Generation EU (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eiq:eileqs:166
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