Ramon Marimon's picture
Affiliation: 
European University institute and UPF-BarcelonaGSE
Credentials: 
Professor of Economics
Pierre Werner Chair

Voting history

Fiscal Rules in the European Monetary Union

Question 2: Which of the following is the one reform you would choose to improve fiscal rules?

Answer:
Expansion of EU level fiscal capacity for expanded mutual insurance
Confidence level:
Very confident
Comment:
The EU and the euro area have changed after the euro and Covid-19 crises (and Brexit), the ECB has played a leading role with a monetary and fiscal mixed, with some shortcomings similar to the role the the FRB and the US Treasury have played in the financial and Covid-19 crises, with the difference that the ECB had to do it on its own; well together with ESM as crisis resolution mechanism. In any case, an excessive burden. Now the European Commission is, in practice, creating a 'temporary EU Treasury' to fund NGEU, and will issue eurobonds to this end. Meanwhile, the Eurosystem holds more than 20% (close to 30% counting lasts purchases? the limit is 33%!). In sum, euro area debt (national and EU) will play a very different role in the aftermath of the Covid-19 crisis, as to think that a --say, simplified -- SGP can be the center of the EU and EA fiscal policy. There is a need for a unified EU\EA fiscal policy, and for the corresponding institutional development, since the fiscal stakes at the EU\EA level are high and new permanent instruments can be developed without changing Treaties (e.g. EU automatic stabilisers, as a 'permanent SURE, or state-contingent debt), even if to a large extent fiscal policy will remain in the hands of the MS. For them a revised/simplified SGP can be a complement to the new & more powerful EU/EA fiscal instruments that can act, again, as a carrot.

Proposition 1: The existing fiscal rules for European Monetary Union members require revision.

Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
The SGP debt/deficit targets are meaningless if the Escape Clause is deactivated within the incoming years (now the eurogroup says 2023). But there are two, possibly more important reasons. First, as the European Commission has recognised, the ad-hoc 'flexibility' introduced since the euro crisis has made the SGP too complex to be an accountability rule, not only because it's more difficult to assess compliance, but also because makes the SGP even less credible: with a new twist compliance can be achieved! Second, the attempt to enforce the SGP with sanctions has proved, as expected, futile. Yet, NGEU has shown, once more, that EU carrots work, much more than non-credible sticks. When the Maastricht targets were introduced, there was a big carrot ahead for countries which didn't have the entrance in the incoming European Monetary Union guaranteed and most of them comply (well, not all, as it's known).

The ECB’s Green Agenda

Question 2: Would you support changing the ECB’s mandate to incorporate the EU’s target of carbon neutrality by 2050, if such a change is deemed legally necessary to adopt your preferred approach?

Answer:
No
Confidence level:
Very confident
Comment:
Then we should also incorporate an unemployment target (e.g. not to purchase bonds of firms that fire workers?), a health industry target, you name it. This is not, and should not be, the job of the ECB or any independent Central Bank.

 Question 1: Which of the following actions is the most advisable approach for European Central Bank to address the environmental impact of its bond-purchasing policies?

Answer:
Banning bond purchases from industries with current negative environmental impact
Confidence level:
Not confident
Comment:
I would also insist in what should not be done: "pure green rhetoric", as if the ECB had to follow the EC (changing) mandate, which should not. Having said this, the ECB may well take into account that some firms have a (well documented) negative environmental externality and stop purchasing their bonds.

Post Covid-19 Potential Output in the Eurozone

Question 2: How much lower will the potential growth rate of GDP in the Eurozone in 2025 be due to Covid-19 relative to pre-Covid forecasts?

 

Answer:
No different
Confidence level:
Confident
Comment:
Historically has been like this and even if the COVID crisis is different in many respects, is not clear why should it be much different regarding growth trends.

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