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Policy Brief

Rebooting Europe: a framework for a post COVID-19 economic recovery

COVID-19 has triggered a severe recession and policymakers in European Union countries are providing generous, largely indiscriminate, support to companies. As the recession gets deeper, a more comprehensive strategy is needed. This should be based on four principles: viability of supported entities, fairness, achieving societal goals, and giving society a share in future profits. The effort should be structured around equity and recovery funds with borrowing at EU level.

By: , and Date: May 13, 2020 Topic: Energy & Climate

The issue

To slow the spread of COVID-19, European governments have adopted stringent containment measures. These have led to a severe recession and policymakers in European Union countries are providing generous support to help companies cope with the immediate consequences. The basic approach has been to provide generous and indiscriminate emergency support to help cash-strapped firms meet their immediate liquidity needs. But as lockdown measures continue and the recession gets deeper, a more comprehensive strategy for the future needs to be designed.

Policy challenge

The success of support measures as COVID-19 lockdowns are relaxed depends on the type of recovery the EU wants to achieve. At the same time, decisions taken today will have long-term implications for the single market and government debt. How should further fiscal support provided to companies be structured? What implications will different approaches have for the single market, government budgets and the EU’s climate strategy? Difficult trade-offs lie ahead: a speedier recovery could run counter to green ambitions; national rescues could hurt neighbouring markets. The hard choices in the next phases should follow a set of four principles, and the recovery effort should be structured around equity and recovery funds with borrowing at EU level.

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Opinion

A K-shaped recovery and the role of fiscal policy

The spine of the letter represents the fall in activity at the start of the pandemic. Then there is a split, which leads to the two ‘arms’ that capture the different directions taken by economic activity in different sectors.

By: Maria Demertzis Topic: European Macroeconomics & Governance Date: March 2, 2021
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External Publication

European Parliament

The impact of COVID-19 on the Internal Market

Study assessing the impact of the COVID-19 crisis on the European Union's Internal Market and consumer protection prepared for the European Parliament.

By: J. Scott Marcus, Niclas Poitiers, Lionel Guetta-Jeanrenaud, Monika Grzegorczyk, Sophie Buckingham, Fernando Hortal Foronda, Norman Röhner and Jacques Pelkmans Topic: European Macroeconomics & Governance, European Parliament, Testimonies Date: March 1, 2021
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In this workshop, invited guests will discuss priorities and proposals for the Italian G20 Presidency for a green local infrastructure agenda.

Speakers: Amar Bhattacharya, Maria Demertzis, Niclas Poitiers and Gelsomina Vigliotti Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels
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Working Paper

COVID-19 credit-support programmes in Europe’s five largest economies

This paper assesses COVID-19 credit-support programmes in five of the largest European economies, and examines how countries have dealt with trade-offs raised by the programmes.

By: Julia Anderson, Francesco Papadia and Nicolas Véron Topic: European Macroeconomics & Governance Date: February 24, 2021
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Asset bubbles won’t help our post-pandemic recovery

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By: Alicia García-Herrero Topic: Finance & Financial Regulation Date: February 23, 2021
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La dette : une obsession prématurée

Ce qui est malsain, avec la proposition d’annuler la dette, c’est le déni de réalité consistant à affirmer que l’Etat peut effacer une partie de ses engagements sans que cela ne coûte à personne.

By: Jean Pisani-Ferry Topic: European Macroeconomics & Governance Date: February 22, 2021
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Past Event

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Money laundering and hybrid threats: Has COVID-19 made it all worse?

Will the European Union and its member states be ready to control this risk – even if competition for financial inflows intensifies?

Speakers: Arnis Praudins, Arnis Šnore, Nicolas Véron and llze Znotiņa Topic: Finance & Financial Regulation Date: February 18, 2021
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Podcast

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So long, credit support?

How effective have COVID-19 credit support programmes been?

By: The Sound of Economics Date: February 17, 2021
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Opinion

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Aiming for 'green zones' offers a clear path to navigate an exit from the pandemic with as little damage as possible. Europe should not miss the opportunity to build on its strength and unity.

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Join us in conversation with EBRD President Odile Renaud-Basso.

Speakers: Odile Renaud-Basso and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: February 16, 2021
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Living standards and financial resilience across Europe

What has the impact of the pandemic on households’ financial resilience been, and how should policy makers respond?

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Podcast

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From support to recovery: national fiscal policy in the wake of COVID-19

The EU has set ambitious goals for economic recovery: how these recovery funds are spent by member states will be critical to its success. A look into the European framework and the case of Italy.

By: The Sound of Economics Date: February 10, 2021
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