Policy recommendations for the new European Commission: priorities for stabilising EMU
Jan David Schneider, Fabian Zuleeg, Janis A. Emmanouilidis
EPC Discussion Paper
The euro area crisis exposed substantial structural flaws in the currency areas architecture. Addressing these flaws this discussion paper explores the ways in which the European Institutions can re-evaluate and overcome challenges for a more positive European future.
To do this Jan David Schneider, Fabian Zuleeg and Janis A. Emmanouilidis recommend that the coming European Commission should develop a new framework to assess the real returns to growth of public and social investment, which could open the path for more flexibility on deficits in future. In close coordination with the European Parliament, the Commission should also review the Country Specific Recommendations with a stronger focus on a smaller number of key priorities for each country. The construction of a fiscal capacity should be made a priority in the new political cycle to resolve the absence of a mechanism to provide effective ex ante fiscal risk sharing in the Eurozone. Furthermore, to boost growth, there is a need to encourage private, public and social investment through a European Investment Programme (EIP) in the short term. Finally, the Commission should ensure that the implementation of an EIP is compatible with the long term goals of a fiscal capacity.
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