Both a sustainable economic and social recovery from the COVID-19 crisis and the need to address effectively the climate change will require a massive expansion of investments. To achieve this, reshaping the EU fiscal rules is indispensable. Against this background, the Section for Economic and Monetary Union and Economic and Social Cohesion (ECO) of the European Economic and Social Committee (EESC) organised a hearing on Friday 10 September 2021, bringing together experts from organised civil society, academia as well as decision-makers to discuss how the new economic governance framework should be shaped to ensure that fiscal policies target both long-term sustainability and short-term stabilisation. The EESC intends to use the findings and conclusions of the event to feed into an own-initiative opinion and the Europe-wise discussion held in the framework of the Conference on the Future of Europe.
Professor René Repasi shared his views on the legal feasibility of certain reform elements of the EU fiscal rules. His main argument was that a lot is possible if political will can be formed. The Treaties only require to avoid excessive deficits without specifying in a legally binding way what is meant by that. The main dangers lie therefore in a potential cumulative effect of reforms that lead altogether to a structural transgression of the excessive deficit limitation and in further weakening the core role of national Parliaments in their right to adopt and to define national budgets.
Professor Repasi's presentation was preceded by Professor Sebastian Dullien's (IMK Düsseldorf) presentation on the economic necessity of the reform proposals. Professor Alicia Hinarejos (McGill University) also participated in the hearing, commenting on the legal aspects of the suggested reforms.