The Jacques Delors Centre proposes a one-year policy project to develop lasting tools that can ensure a resilient recovery in the EU in the aftermath of the pandemic. The starting point of the project is the EU’s Recovery Instrument. The basic premise of the project is that the Recovery Instrument should be turned into a permanent EU tool to finance investments backing up common policy goals in particular in the area of climate policy and that the fiscal rules of the EU should be reformed in a way that allows for more investment at national level.
- Implementation: The project will look in detail at the implementation of the Recovery Instrument and in particular of the Recovery and Resilience Facility. It will examine the political and institutional dynamics between Commission and member states in order to draw lessons on how to build a permanent governance process for a future permanent common fiscal policy.
- Policy framework for national budgets: The project will analyse how the EU fiscal rules and their real-world implementation influence the ability of member states to deploy national fiscal policies to support the recovery and will develop proposals how to adapt the rules to allow for more green investment when doing so.
- Financial Market Impact: The project will look at how the large-scale issuance of EU bonds affects financial markets and to what extent this creates a new EU safe asset that shifts market reality. It will also put a particular emphasis on the effects of the EU issuing green bonds to finance the Recovery Instrument and how this affects the overall sustainable finance agenda in the EU.
- Permanent Solutions: Based on these insights and on the previous work the Centre has done in the field, the project will develop concrete proposals for the design of a permanent successor instrument to the Recovery Instrument and for the process that could lead up to its creation as well as for a new steady state of fiscal rules that allow for more, and in particular green, investment.