‘The EU’s fiscal rules: principle, policy and reform prospects’

This paper by Menelaos Markakis (assistant professor at Rotterdam University) examines the impact of the pandemic on the EMU’s fiscal policy rules. It first analyses the reforms and measures passed in the field over the past two years (starting with the overall suspension of the Stability and Growth Pact), and assesses how the pandemic has shaken the macroeconomic and constitutional foundations of the EU’s fiscal governance regime. From then on, it considers, in light of the most pressing environmental and geopolitical challenges of the EU, and its new macroeconomic environment, some of the main reform avenues that policy-makers should focus on in the immediate future.

‘Revisiting EU’s economic governance framework – economic necessities and legal options’

Based on a CEPR study he co-authored, this paper by Armin Steinbach (professor at HEC Paris) puts forward an ambitious yet feasible blueprint for reforming the European macroeconomic policy system. It highlights three key policy fields for reform: the relationship between the monetary and the fiscal pillars, fiscal rules, and potential follow-ups to the Next Generation EU Initiative (NGEU) launched in response to the Covid crisis. More particularly, the paper focuses on the legal feasibility of reforms in the area. Based on an insightful and forward-looking analysis of relevant Treaty provisions, the paper argues that primary law leaves much room open for reforms and policy improvements.

‘The impact of NGEU on the Union’s institutional balances’

This paper by Paul Dermine (CJEU) seeks to examine how the pandemic, and the main policy initiative it triggered on the economic front, i.e. the recovery plan NGEU, have impacted the various institutional balances of the Union. The paper argues that the pandemic has both confirmed some trends already well underway since the Great Financial Crisis (competence creep, executive dominance, new intergovernmentalism, …), and prompted new evolutions (most notably a return to the Community method). Among others, the paper examines the role of the European Council in EU policy-making, the influence of the Commission on policy implementation (and its relationship with the Council in that context), the attempts of the European Parliament to increase its weight on economic governance, and the involvement of the Court of Justice. The paper also considers how the pandemic and NGEU have impacted the relationship between the EU and national authorities with regard to economic policy-making.