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European Stabilization Policy After the Covid-19 Pandemic: More Flexible Integration or More Federalism?

Andersson, Fredrik N G LU and Jonung, Lars LU (2022) In Working Papers
Abstract
Crises are a major driving force behind cooperation in the European Union. This holds also for monetary and fiscal policy. During severe crises, cooperation has been enlarged and intensified. The recent covid-19 pandemic is a clear example of this pattern. The pandemic has had huge impact on the conduct of stabilization policies in the EU. Public debt has grown rapidly in many EU member states. The ECB has carried out a highly expansionary monetary policy. In this paper, we discuss the implications for the EU of a move towards increased fiscal federalism following the pandemic. First, the role of crises as a driver of political change is analysed. Next, we examine in greater detail, the effect of crises on the design of stabilisation... (More)
Crises are a major driving force behind cooperation in the European Union. This holds also for monetary and fiscal policy. During severe crises, cooperation has been enlarged and intensified. The recent covid-19 pandemic is a clear example of this pattern. The pandemic has had huge impact on the conduct of stabilization policies in the EU. Public debt has grown rapidly in many EU member states. The ECB has carried out a highly expansionary monetary policy. In this paper, we discuss the implications for the EU of a move towards increased fiscal federalism following the pandemic. First, the role of crises as a driver of political change is analysed. Next, we examine in greater detail, the effect of crises on the design of stabilisation policies in the EU since the introduction of the euro, the common currency. Finally, we discuss the significance of the recent pandemic-induced steps towards increased federalism for the EU. We raise the question as to whether this is a desirable path for the future of European cooperation. (Less)
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author
and
organization
publishing date
type
Working paper/Preprint
publication status
published
subject
keywords
Monetary policy, fiscal policy, fiscal rules, stabilization policy, European Union, ECB, crises, E60, F42, H60
in
Working Papers
issue
2022:11
pages
30 pages
language
English
LU publication?
yes
id
24240c89-6017-49ad-89f9-68a689e80c4b
date added to LUP
2022-06-23 10:04:54
date last changed
2024-03-11 13:58:34
@misc{24240c89-6017-49ad-89f9-68a689e80c4b,
  abstract     = {{Crises are a major driving force behind cooperation in the European Union. This holds also for monetary and fiscal policy. During severe crises, cooperation has been enlarged and intensified. The recent covid-19 pandemic is a clear example of this pattern. The pandemic has had huge impact on the conduct of stabilization policies in the EU. Public debt has grown rapidly in many EU member states. The ECB has carried out a highly expansionary monetary policy. In this paper, we discuss the implications for the EU of a move towards increased fiscal federalism following the pandemic. First, the role of crises as a driver of political change is analysed. Next, we examine in greater detail, the effect of crises on the design of stabilisation policies in the EU since the introduction of the euro, the common currency. Finally, we discuss the significance of the recent pandemic-induced steps towards increased federalism for the EU. We raise the question as to whether this is a desirable path for the future of European cooperation.}},
  author       = {{Andersson, Fredrik N G and Jonung, Lars}},
  keywords     = {{Monetary policy; fiscal policy; fiscal rules; stabilization policy; European Union; ECB; crises; E60; F42; H60}},
  language     = {{eng}},
  note         = {{Working Paper}},
  number       = {{2022:11}},
  series       = {{Working Papers}},
  title        = {{European Stabilization Policy After the Covid-19 Pandemic: More Flexible Integration or More Federalism?}},
  url          = {{https://lup.lub.lu.se/search/files/173630676/WP22_11.pdf}},
  year         = {{2022}},
}