The EU’s long-term fiscal challenges

The EU faces a fiscal dilemma in the long-term: fiscal space has likely declined, but public investment needs have gone up.

Publishing date
03 May 2023

EU finance ministers met at the April 2023 informal ECOFIN meeting to discuss the reform of the fiscal governance framework as proposed by the European Commission. Bruegel researchers were asked to contribute to this discussion by providing information on the long-term fiscal needs that countries will have and how well they may be able to meet these needs.

In this episode of The Sound of Economics, Maria Demertzis invites Zsolt Darvas and Jeromin Zettelmeyer to share their insights on the implications of long-term fiscal challenges facing the European Union. 

In their latest report, the authors identify that the pandemic and subsequent price shocks triggered by Russia’s invasion of Ukraine have increased longer-term fiscal pressures in the European Union through higher debt, higher expected real interest rates and higher public investment needs. 

Relevant publication:

Zettelmeyer, J., G. Claeys, Z. Darvas, L. Welslau and S. Zenios (2023) ‘The longer-term fiscal challenges facing the European Union’ Policy Brief 10/2023, Bruegel

This Policy Brief is a version of a paper prepared for the Working Session II of the Informal Meeting of EU Economy and Finance Ministers and Central Bank Governors, Stockholm, 29 April 2023.


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