Policy Briefs
Refine
Document Type
- Working Paper (92)
Is part of the Bibliography
- no (92)
Keywords
- Basel 3; unrated corporates; banking reforms (1)
- Conference on the Future of Europe (1)
- EU Migration; Ukraine; Responsibility Sharing (1)
- Economic Governance, Inflation, ECB (1)
- European Semester; economic governance; recovery instrument (1)
- Fiscal Rules, Excessive Deficit, Stability and Growth Path (1)
- French presidency of the Council of the European Union 2022; French elections 2022 (1)
- German 2021 elections; EU foreign policy; EU security policy (1)
- German 2021 elections; economic governance (1)
- German 2021 elections; rule of law (1)
On 1 July 2020 Germany will take over the presidency of the Council of the EU. Major European issues such as the Commission’s proposal for a Recovery Instrument, the EU multiannual financial framework, or the negotiations on the future UK-EU relationship will fall within its term. If expectations were high before corona that a member state with the political weight and capacities of Germany would be able to significantly advance the political agenda at EU level, such expectations are even more prevalent now. At the same time, the institution of Council presidency has lost much of its bite under the Treaty of Lisbon. Germany does not only find itself wedged between different institutional actors with a limited time frame to achieve political results. It is also faced with an overcrowded agenda and many practical limitations caused by the pandemic. This policy brief analyses and assesses the expectations as regards the German Council presidency, in particular by considering the institutional context in which it operates and the limitations imposed by the pandemic.
How to spend it right - A more democratic governance for the EU Recovery and Resilience Facility
(2020)
The Recovery and Resilience Facility (RRF) will be the core of the EU’s new Recovery Instrument to fight the economic fallout of the pandemic. Under the RRF, 310 billion euros in additional EU spending will be allocated by the European Commission to member states based on individual Recovery and Resilience Plans (RRPs). In this Policy Brief, we argue that the proposed governance to decide on the assessment of RRPs lacks democratic elements as parliaments are largely sidelined. This should be changed to ensure necessary political ownership at national and European level; to include a second pair of European eyes to prevent misspending; and to avoid a roll-back of EU democracy. Therefore, we propose that the European Parliament get a veto over the Commission decision assessing individual RRPs and allocating funds. National parliaments should also have a say in the adoption of the RRP of the respective member state.
The COVID19 – crisis puts a strain on public households in the EU, not only because of necessary rescue packages, but also due to a drop of tax revenues in the face of an economic downward spiral. A European tax reform to support the economic recovery without putting an extra burden on companies s thus in strong need. One solution is to secure corporate taxes that formerly slipped through public budgets due to tax avoidance. In this Policy Brief, Pola Schneemelcher argues that the EU must now focus on the already proposed international minimum tax rate. Member states will not be able to implement it on their own; consensus at international level is necessary, but noncommittal. A legally binding solution can therefore only exist at EU level.
In order to avoid permanent scars from the economic impact of the Coronavirus in Europe, a determined fiscal response will be necessary. We argue that there should be a clear division of labor between Europe and national governments: the latter will have to provide stimulus with targeted measures, while Europe needs to build a safety net so that member states will not lose access to bond markets due to speculative attacks. This safety net should have three components: A commitment by member states to use ESM instruments without conditionality; a commitment by the ECB to use all of its tools; and a number of flanking measures to underscore member states’ commitments.
The ECB has announced a 750-billion-euro purchase programme to fight the economic impact of the COVID-19 pandemic. But like all ECB programmes in recent years, the new Pandemic Emergency Purchase Programme (PEPP) will likely be challenged in court. This policy brief assesses whether the PEPP will likely survive a legal challenge. It argues that the PEPP is compatible with EU law because it meets the three criteria the Court of Justice of the EU has established to check the legality of monetary policy measures: First, the PEPP falls within the ECB’s mandate. Second, it respects the principle of proportionality. And third, it does not violate the prohibition of monetary financing. This assessment even holds if the ECB were to relax some of the constraints in the PEPP like the issuer limit currently applicable to other bond-buying programmes.
The spread of the global coronavirus pandemic has infected the world with a substantial surge of false information. When there is already a significant amount of confusion, mis- and disinformation can amplify feelings of fear and enhance risks. Joint action is crucial to tackle this unprecedented amount of false information and the EU is well-placed to lead a coordinated response. While important steps have already been taken, more decisive action is necessary. This Policy Brief provides an overview of significant examples of mis- and disinformation in the context of the pandemic and identifies key lessons for the EU’s broader fight against false information.
Although the Covid-19 outbreak has reshuffled Germany’s agenda for the upcoming EU Council presidency, a three-point plan by the German government provided new impetus to the discussion about reforming the Common European Asylum System (CEAS). This Policy Brief analyses how Germany’s three-point plan, centred on the idea of a border procedure, compares to previous reform proposals and which elements of the plan can move the reform process forward. It concludes by identifying three areas in which the upcoming German Council presidency can adopt a pragmatic approach to forge a compromise in the Council.
COVID-19 will hit financial institutions with a substantial time lag, but the coming storm will be fierce. The EU banking sector is entering the troubled waters of the Corona crisis with four major vulnerabilities: (1) Market and (2) funding liquidity risks have been mitigated by bold policy measures at EU and national level. (3) Concentration risk in banks’ sovereign exposures could be addressed by a European recovery fund. The immense economic fallout will further depress banks’ already weak (4) levels of profitability. Losses will erode banks’ capital base, putting their viability at severe risk. Monetary, fiscal and prudential emergency measures are keeping the real economy afloat but fail to enhance banks’ resilience. To withstand the crisis, EU policymakers should require banks to suspend all discretionary distributions and preserve capital instead.
Data sharing refers to transactions in which personal or nonpersonal data from the public or private sector is made available for other organisations (public or private) for use and re-use. Data sharing can occur for free or data can be made available for profit. Data sharing in the EU has a lot of untapped value potential both for individuals and for the economy at large. New rules and institutions that can enable data sharing in a trusted manner and give citizens more control over when and how they share their private data need to be built at the European level. The question is how? The EU should work towards a stronger culture of data sharing and help build the necessary infrastructure with a focus on two areas: Building infrastructure for data sharing and access for companies and extending the right to portability of personal data (Art. 20 GDPR).
Does the Eurozone need a “treasury”? The answer is no: The Eurozone needs a common fiscal policy to complement the ECB’s monetary policy. But it does not need a new institution to take fiscal policy decisions or to execute such decisions. The EU institutional framework is well-equipped to perform these functions. Hence, the focus of political energy should be on getting the right policies and instruments in place, not on building new shiny institutions.