Fiscal Policy revised

The COVID-19 pandemic presents not only unprecedented policy challenges, tied to a looming recession of an estimated 8,3% EU GDP decline, but also a window of opportunity for urgently needed fiscal reforms. As monetary policy has reached its limits, due to historically low interest rates over the last decade, there is a revival of fiscal policy in order to deal with the consequences of the economic crisis and the resulting short-term financing needs of almost €2 trillion, including a basic investment gap of €846 billion.

The Policy Lab will be focused on two core topics that shall be complemented by other issues raised during the discussions:

• Fiscal rules 
• Tax exemptions

Policy Lab Objectives 

The policy lab „Fiscal Policies Revised“ takes the recent recovery programs as a working base to 

• Discuss long-term implications of the COVID-19 crisis for managing public debt and fiscal policy
• Develop ideas to align fiscal rules and fiscal policy with the EUs climate and environmental targets

Guiding Questions

• How can economic policy in the EU better reflect the long-term fiscal risks of climate change and biodiversity loss and create fiscal space for preventive investments in the short term?
• How can member states create fiscal revenues from reconsidering taxation and tax exemptions?