EU Debt Instruments and Fiscal Transparency: The Case of the EU Recovery Fund
-
Ahmed Demir
and
Sebastian Garmann
Abstract
We study the transparency of debts incurred for the EU Recovery Fund. In our opinion, the Recovery Fund lacks transparency at various levels. We find that the Fund implements a hidden transfer scheme that splits member states into net contributors and net recipients. As a result, the national budgets of the EU member states will have to face uncertain future obligations. Finally, we hold that the Fund weakens the European fiscal rules because the debts of the Recovery Fund do not add to the national debt levels. The national debt levels therefore do not show the whole burden.
References
Bundesrechnungshof. 2021. Special Purpose Report on the Potential Impact of Joint Borrowing of the Member States of the European Union on the Federal Budget (Recovery Fund).Search in Google Scholar
Bundesrechnungshof. 2022. Advisory Report on Basic Conditions to Ensure Sustainable Public Finances.Search in Google Scholar
Bundesrechnungshof. 2023. Bericht nach § 88 Absatz 2 BHO zur Steuerung und Kontrolle der Umsetzung des Deutschen Aufbau- und Resilienzplans.Search in Google Scholar
Council of the European Union. 2020. Opinion of the Legal Service of 24 June 2020, Proposals on Next Generation EU, 9062/20.Search in Google Scholar
Heinemann, F. 2021. “Die Überdeckung der Next Generation EU-Schulden im Entwurf des neuen EU-Eigenmittelbeschlusses: Ausmaß und Haftungskonsequenzen.” List Forum für Wirtschafts- und Finanzpolitik 47: 133–50. https://doi.org/10.1007/s41025-021-00234-3.Search in Google Scholar
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Articles in the same Issue
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- Editorial
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- Public Debt Ratios Will Increase For Some Time. We Must Make Sure That They Do Not Explode
- An EU Fund to Incentivise Public Investments with Positive Externalities
- The Case for Putting a Public Investment Clause into the German Debt Brake
- EU Debt Instruments and Fiscal Transparency: The Case of the EU Recovery Fund
- Explaining the Divergence in German and French Public Finances
- Fiscal Prospects for Italy
- The Swiss Debt Brake Is Democratic, Strict, Transparent, and Binding. A Model to Follow?
Articles in the same Issue
- Frontmatter
- Editorial
- Economic Policy Making Under Hardening Fiscal Constraints
- Policy Papers (No Special Focus)
- A Latticework of Inflation Models
- A Comparative Evaluation of Fiscal Stabilization Strategies during the Covid-19 Pandemic with Germany as a Reference Point
- The Relationship Between the German Current Account and Financial Account: Evidence from the Toda-Yamamoto Causality Approach
- The Tax Attractiveness of EU Locations for Corporate Investments: A Stocktaking of Past Developments and Recent Reforms
- Aid in Conflict: Determinants of International Aid Allocation to Ukraine During the 2022 Russian Invasion
- Policy Forum: Economic Policy in an Era of Hardening Fiscal Constraints
- Public Debt Ratios Will Increase For Some Time. We Must Make Sure That They Do Not Explode
- An EU Fund to Incentivise Public Investments with Positive Externalities
- The Case for Putting a Public Investment Clause into the German Debt Brake
- EU Debt Instruments and Fiscal Transparency: The Case of the EU Recovery Fund
- Explaining the Divergence in German and French Public Finances
- Fiscal Prospects for Italy
- The Swiss Debt Brake Is Democratic, Strict, Transparent, and Binding. A Model to Follow?
