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1. Using RRF resources to kick-start a job-rich recovery in Greece

Author:
Manos Matsaganis and Georgios Manalis
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The Recovery and Resilience Facility (RRF) is a golden opportunity for those member states that were most badly hit first by the debt crisis then by the pandemic. Greece, one of the largest beneficiaries in per capita terms, is due to receive very significant resources that can help arrest the decline of the 2010s. Can these resources be spent wisely and efficiently enough to kickstart the process of inclusive and sustainable growth? This paper briefly reviews the Greek National Recovery and Resilience Plan (Greece 2.0), assessing its potential contribution to upgrading the economy’s growth model, enhancing skills, and boosting employment. In 2007-19, total investment in Greece shrank by a stunning 70% in real terms. Over the same period, public investment fell by 62%, business investment by 44%, and household investment (on housing, mostly) by 89%. Under-investment constrains growth and undermines the future prospects of the Greek economy. The Recovery and Resilience Facility offers Greece a unique opportunity to bridge the investment gap, giving a boost to the sustainable recovery of the Greek economy. Technically, Greece 2.0, the country’s National Recovery and Resilience Plan is competently drafted, as its favourable reception by the European Commission indicates. Still, critical issues abound. In this sense, Greece 2.0 embodies the contradictions of the current juncture. On the one hand, there is a consensus that the Greek economy should rebalance, by pursuing a growth strategy that relies much more on exports than in the recent past, and much less on domestic consumer demand fuelled by debt. On the other hand, the legacy of the past weighs heavily on social and political actors, limiting their room for manoeuvre. The list is daunting. It remains to be seen how the above will play out over the next few years.
Topic:
Debt, Economy, Crisis Management, Resilience, and Economic Recovery
Political Geography:
Europe and Greece

2. Nudging for Recovery: Behavioral Economics and the implementation of the National Recovery and Resilience Plan

Author:
Demosthenes Kollias
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
With the National Recovery and Resilience Plan, Greece is presented with yet another opportunity to catch up with global trends. At the same time, behavioral economics are being established worldwide as a valuable asset in the policy maker’s toolkit. The paper -mainly focusing on taxation, labor market policy, and climate change- aims to examine the behavioral conundrum that creates frictions and inefficiency in the domains outlined above and to offer concrete and quantifiable policy proposals, in accordance with the goals of Greece 2.0. Regarding tax evasion, for example, one can estimate at least €1 billion in additional tax revenue if the proposals are implemented.
Topic:
Climate Change, Economics, Tax Systems, Labor Market, and Economic Recovery
Political Geography:
Europe and Greece

3. Will corporate debt choke the post-COVID-19 recovery?

Author:
Frederico Mollet
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
European Policy Centre (EPC)
Abstract:
Europe’s economic recovery is threatened by the corporate debt overhang created in the wake of the pandemic. Even as vaccines roll out, Europe faces the prospect of a prolonged retrenchment as indebted firms pull back investments and repair their balance sheets. Insolvency procedures have gradually improved over the past decade in Europe, but decisive and swift public action is needed to take advantage of these reforms. Given the scale of the crisis, Frederico Mollet argues in favour of a comprehensive European restructuring strategy. EU member states and the Commission must step in to provide the resources, guidance, and coordination necessary to push through this monumental restructuring. This strategy would furthermore benefit from common European guidelines and criteria for creditors and debtors. It will not only increase the likelihood of success but also protect the level playing field. Lack of a clear strategy and coordinated approach will result in a drawn-out restructuring process that pushes too many viable firms into liquidation and permanently hampers the economic recovery. Centring on private restructurings would also minimise the use of public funds at a time when governments have to deal with multiple competing fiscal pressures.
Topic:
Debt, Political Economy, and Economic Recovery
Political Geography:
Europe

4. Recovery and reform in the EU’s most vulnerable regions

Author:
Alison Hunter and Marta Pilati
Publication Date:
06-2021
Content Type:
Policy Brief
Institution:
European Policy Centre (EPC)
Abstract:
Europe’s most vulnerable regions, characterised by persistent low growth and poverty, face a systemic lack of specific EU support. These regions display particularly high levels of vulnerability to the social, economic and territorial impacts of COVID-19, which will affect their recovery trajectories. They risk being left further behind in the EU’s complex pathway towards ‘a green and digital recovery’. The Union’s lack of focus and action for investing in these most vulnerable regions must be addressed. First and foremost, EU institutions and member states should recognise that some territories will struggle much more than others in their recovery trajectories. Ignoring their plight would have potentially far-reaching consequences. The EU’s ‘convergence machine’ could be damaged irreparably, with long-term – and potentially political – consequences. Alison Hunter and Marta Pilati continue their extensive research on the Union’s low-growth, poor regions, calling for the founding of a specific EU initiative to support them as well as further targeting by the existing policy architecture. In particular, they recommend: creating an EU policy space for regions experiencing long-term low growth and poverty, to promote the value and visibility of place-based support; aligning Cohesion Policy and the Recovery and Resilience Facility for improved policy coherence and greater investment impact; and tailoring support for growth-enhancing reforms in the EU’s most vulnerable regions. The EU’s green and digital recovery strategy fails to account for the specific needs of its poor and low-growth regions. Existing disparities and fragmentation challenges across the Union could widen or even become entrenched, casting new doubts on the EU’s ability and commitment to strengthen its convergence agenda and execute a just transition. The fallout could lead to a rise in territorial and political tensions while leaving many vulnerable places behind. Hunter and Pilati outline an agenda for a new EU initiative that champions reform support for these vulnerable territories and improves their prospects for a digital and green recovery.
Topic:
Political Economy, Poverty, Reform, European Union, Digital Economy, Economic Growth, Green Technology, Recovery, COVID-19, and Economic Recovery
Political Geography:
Europe

5. Rethinking EU economic governance: The European Semester

Author:
Frederico Mollet
Publication Date:
12-2021
Content Type:
Policy Brief
Institution:
European Policy Centre (EPC)
Abstract:
In the debates over the future of the EU’s economic governance, the reform of the Stability and Growth Pact (SGP) usually takes centre stage. But the European Semester – the framework governing economic policy coordination and country surveillance – is also critical. Reforming and strengthening it is vital given the multiple challenges the EU faces, from the twin green and digital transitions to implementing the Recovery and Resilience Facility (RRF) and tackling the macroeconomic and structural scars left by COVID-19. This Policy Brief, the second in a series of EPC papers that reassess the EU's economic governance policies, sets out proposals for reforming the European Semester across three strands: (i) integrating the RRF into the Semester; (ii) drawing on the positive lessons of the RRF process; and (iii) improving the effectiveness of cross-cutting policy coordination and the Macroeconomic Imbalances Procedure (MIP).
Topic:
Governance, European Union, Economy, COVID-19, and Economic Recovery
Political Geography:
Europe

6. "Next Generation EU" Cities: Local Communities in a Post-Pandemic Future

Author:
Anna Lisa Boni and Tobia Zevi
Publication Date:
12-2021
Content Type:
Special Report
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
As the world enters a new year, the Covid-19 pandemic is still upsetting our daily lives. And as 75% of EU citizens live in urban areas, cities are the most prominent stage both for responding to the health crisis, and for seizing opportunities to recover and move forward. Meanwhile, in 2020, EU countries agreed to Next Generation EU, a €750 billion recovery package that represents a once-in-a-generation opportunity. This report, produced in collaboration between ISPI and Eurocities, argues that cities should be given more say over how post-pandemic national recovery plans pan out between here and 2026, when all projects are supposed to be wrapping up. Indeed, the success of the EU recovery plans will hinge upon what cities do, or they don’t do over the next five years. How are cities rethinking their role within the “twin” green and digital transitions? How can they achieve gender parity, reduce inequalities, and preserve a vibrant cultural life?
Topic:
European Union, Cities, COVID-19, Health Crisis, and Economic Recovery
Political Geography:
Europe

7. EU Employment Dynamics: The Pandemic Years and Beyond

Author:
Stefan Jestl and Robert Stehrer
Publication Date:
11-2021
Content Type:
Special Report
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
The economic shock induced by the pandemic has plunged European economies into a recession. Lockdowns and social distancing measures have affected economic life in a substantial way, with industries and population groups facing varying difficulties. This study explores potential future employment dynamics across European industries and employment groups for the period up to 2026 by drawing on past sectoral trends and the latest macroeconomic forecast results from the International Monetary Fund (IMF) and the European Commission. A scenario analysis is also carried out, taking into account the great uncertainty and risks that are related to the baseline forecasts.
Topic:
Labor Issues, European Union, Employment, COVID-19, and Economic Recovery
Political Geography:
Europe

8. Not For Patching? Public Opinion and the Commitment to ‘Build Back Better’

Author:
Karl Pike, Farah Hussain, Philip Cowley, and Patrick Diamond
Publication Date:
05-2021
Content Type:
Special Report
Institution:
Mile End Institute, Queen Mary University of London
Abstract:
This project, led by MEI Deputy Director Dr Karl Pike, examines the views of the British public on what rebuilding after the pandemic might mean. It offers some preliminary indications of what policy areas the public want to prioritise, and how the machinery of government has managed and performed during this crisis.
Topic:
Public Opinion, Crisis Management, Public Policy, Survey, COVID-19, and Economic Recovery
Political Geography:
Britain, United Kingdom, and Europe

9. Multi-annual financial framework and Next Generation EU, Review of an unprecedented, tumultuous European budgetary chapter

Author:
Anne Vitrey and Sébastien Lumet
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Robert Schuman Foundation (RSF)
Abstract:
Negotiations on the adoption of the multi-annual financial framework 2021-2027 and the "Next Generation EU" recovery fund continue. Although hope of an agreement allowing deployment from 1 January 2021 has not yet been lost, there are still many sticking points. This is illustrated by the strong tensions that have recently emerged between the European Parliament and the Council of the European Union, but also between Member States, themselves reluctant to question the precarious balance of the 21 July agreement.
Topic:
Budget, European Union, Finance, and Economic Recovery
Political Geography:
Europe

10. Economic recovery and climate: for Europe and the world, two battles to fight at once

Author:
Clémence Pèlegrin
Publication Date:
12-2020
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
The global economic and sanitary situation has accelerated many States’ commitments to fight climate change and, more specifically, the inclusion of climate issues in national recovery plans. Almost a year after the announcement of the Green Deal by the European Commission, and several weeks after ambitious climate announcements made by China and Japan, Europe will be playing an important round in its commitments at the forthcoming European Council on 10th and 11th December.
Topic:
Climate Change, Economics, Carbon Emissions, and Economic Recovery
Political Geography:
Europe