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Lessons learned from poor governance: A comparison of the EU strategies for exiting the crises of 2008 and 2020

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  • Bilbao-Ubillos, Javier

Abstract

This paper analyses the EU's strategy for recovering from the economic and social consequences of the pandemic, of which the NextGenerationEU temporary stimulus package forms part. That strategy is compared to the diametrically opposite approach taken by EU institutions in the crisis of 2008. The most significant elements and economic policy references adopted in the two cases are identified. The paradigm shift in economic policy is evident, and the errors that led to a double dip in European economies in the handling of the earlier crisis have been avoided. In spite of the better discretionary response, it is argued that there is a need for a permanent, amply endowed, well-designed European stabilisation mechanism free from complexes in regard to the mutualisation of debt, so as to simplify procedures and reduce reaction times in the face of further crises.

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  • Bilbao-Ubillos, Javier, 2023. "Lessons learned from poor governance: A comparison of the EU strategies for exiting the crises of 2008 and 2020," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 372-379.
    • Handle: RePEc:eee:streco:v:67:y:2023:i:c:p:372-379
    DOI: 10.1016/j.strueco.2023.09.005
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    References listed on IDEAS

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    1. Jürgen von Hagen & Jean Pisani-Ferry & Jakob von Weizsäcker, 2009. "A European Exit Strategy," Policy Briefs 328, Bruegel.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2010. "Growth in a Time of Debt," American Economic Review, American Economic Association, vol. 100(2), pages 573-578, May.
    3. Francesco Giavazzi & Marco Pagano, 1990. "Can Severe Fiscal Contractions Be Expansionary? Tales of Two Small European Countries," NBER Chapters, in: NBER Macroeconomics Annual 1990, Volume 5, pages 75-122, National Bureau of Economic Research, Inc.
    4. Alberto Alesina & Roberto Perotti, 1997. "Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects," IMF Staff Papers, Palgrave Macmillan, vol. 44(2), pages 210-248, June.
    5. Alberto Alesina & Silvia Ardagna, 2010. "Large Changes in Fiscal Policy: Taxes versus Spending," NBER Chapters, in: Tax Policy and the Economy, Volume 24, pages 35-68, National Bureau of Economic Research, Inc.
    6. Bilbao-Ubillos, Javier, 2014. "The Failure of European Governance of the Crisis," European Review, Cambridge University Press, vol. 22(3), pages 361-381, July.
    7. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h8493edcn is not listed on IDEAS
    8. repec:hal:wpspec:info:hdl:2441/5l6uh8ogmqildh09h8493edcn is not listed on IDEAS
    9. Javier Bilbao-Ubillos & Ana-Isabel Fern�ndez-Sainz, 2014. "The impact of austerity policies in the Eurozone: fiscal multipliers and 'adjustment fatigue'," Applied Economics Letters, Taylor & Francis Journals, vol. 21(14), pages 955-959, September.
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    Cited by:

    1. Uxó, Jorge & Febrero, Eladio & Ayala, Iván & Villanueva, Paloma, 2024. "Debt sustainability and policy targets: Full employment or structural balance? A simulation for the Spanish economy," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 475-487.

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    More about this item

    Keywords

    European recovery strategies; Crises of 2008 & 2020; Paradigm shift in economic policy; Alternative intervention approaches; Permanent stabilisation mechanism;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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