The role of fiscal rules in relation with the green Economy
Abgeschlossene Forschungsprojekte
Studie von: Österreichisches Institut für Wirtschaftsforschung
Auftraggeber: Europäisches Parlament
Abgeschlossen: 2020
The recent European Commission Communication on Economic Governance review, following guidance already reflected in the European Green Deal, highlights the challenges of financing green transition. In that context, the fiscal framework might need additional reflexion in three specific areas: (1) The extent to which the fiscal framework can support reforms and investments necessary to finance green transition; (2) Whether the current flexibility clauses are still appropriate, in terms of their scope and eligibility, to facilitate the right type and level of investment while preserving debt sustainability; and (3) What could be the role of the fiscal framework in greening national budgets. In the briefing paper, we will evaluate the following issues: (1) What “green public investment” (GPI) could be; (2) What special treatment, if any, the GPI would require in terms of the fiscal framework; (3) Whether the current monitoring and enforcement framework are fit for addressing GPI; and (4) Whether shifting expenditure from selected current priorities to GPI is appropriate or whether taking up additional public debt would be preferable. Hereby, we will also examine historical precedents regarding past attempts to cope with new priorities at EU level and their success. Based on this analysis, we will provide recommendations on how to better reflect, in the current economic governance framework, the GPI, notably by legal or other instruments. These options will have to reflect two basic conditions: (1) Given the limitations of the MFF in terms of expenditure structure and overall size as well as of other financial instruments and institutions at EU level, national governments will have to do most of the green investment; and (2) the bulk of green investment will have to be undertaken by the private sector.
Forschungsbereich:Makroökonomie und öffentliche Finanzen – Klima-, Umwelt- und Ressourcenökonomie
Sprache:Englisch