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European Reconstruction Fund—Emergency Aid or Permanent Fiscal Union with Joint Debt?

In: European Union and Monetary Union in Permanent Crisis II

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  • Dirk Meyer

Abstract

With a decision of the European Council of 17 to 21 July 2020, a multi-year financial framework (MFR) for the period 2021 to 2027 in the total amount of 1074.3 billion EUR and a special budget ‘Next Generation EU’ (NGEU) in the amount of 750 billion EUR was launched. In addition to an increase of six already running programmes by 77.5 billion EUR, a reconstruction fund in the amount of 672.5 billion EUR is in the center. New here is a common EU debt financing throughout the entire scope, which is why the EU’s own resources system had to be changed. 360 billion EUR will be lent to the states as repayable loans. 312.5 billion EUR will be given as lost grants. The economic promotion is justified with the pandemic consequences on the basis of Art. 122 Treaty on the Functioning of the European Union (TFEU). The focus of the analysis is on the associated structural breaks towards a centrally controlled fiscal union, the inclusion of a credit financing in the EU treaties, the justification of the construction instrument with the ‘EU disaster relief clause’ as well as the joint and several liability of the member states.

Suggested Citation

  • Dirk Meyer, 2022. "European Reconstruction Fund—Emergency Aid or Permanent Fiscal Union with Joint Debt?," Springer Books, in: European Union and Monetary Union in Permanent Crisis II, chapter 0, pages 81-109, Springer.
    • Handle: RePEc:spr:sprchp:978-3-658-38646-7_6
    DOI: 10.1007/978-3-658-38646-7_6
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