Debt Monetization and EU Recovery Bonds

Fighting the COVID-19 emergency and re-launching the European economy This first policy insight of the […]

09/04/2020

Fighting the COVID-19 emergency and re-launching the European economy

This first policy insight of the new FEPS COVID Response Papers series highlights some peculiar characteristics, from an economic point of view, of the current Covid-19 crisis. It looks at its exogenous nature with respect to Eurozone countries, as well as at the complex mix of supply and demand shocks it entails. Given these features, the authors suggest two intertwined policy measures in order to tackle the emergency phase of the crisis and the subsequent recovery.


First, a pervasive intervention of Eurozone governments in support of business and households income in the context of the “suspended” economy that measures against the diffusion of Covid-19 have forcefully given rise. The ECB is advised to monetize all public expenditures linked to this emergency plan by purchasing public bonds in the primary market, and to subsequently write them off or exclude these issuances from the computation of public debt-to-GDP ratios. With no signs of inflationary pressures coming, the ECB intervention would avoid Eurozone governments to pile up considerably higher stocks of debts and would help to bypass the current political impasse among Eurozone Member States as to the creation and release of Eurobonds.

In the aftermath of the emergency phase, the authors suggest the implementation of a massive Europe-wide recovery plan centred on public investment addressing the long-lasting technological and environmental challenges of these years, and financed by European institutions through the issuance of European Pandemic Recovery Bonds (EPRBs).

Read the policy paper

Find all related publications
Publications
21/11/2022

The EU and North Africa: Towards a just Twin Transition?

In an era marked by a deficiency in sustainable growth and a profusion of novel […]
13/07/2022

The EU’s transition to climate justice and gender equality

How just and how equal?
20/06/2022

Talking Green in Europe

Lessons on re-framing the public debate on the climate crisis
13/06/2022

A new EU strategy for rural areas

Just Transition & Revitalisation
Find all related events
Events
Upcoming
12/12/2022
Online

The Russia-Ukraine war: an inflection point for sustainable energy transitions

Geopolitics of energy and the green transition
Past
30/11/2022
FEPS HQ, Brussels (Closed-door)

Territorial Just Transition Plans

Stakeholder meeting
28/11/2022
FEPS HQ, Brussels (Closed-door)

Breaking down the silos

Climate mainstreaming and holistic policy design in the face of multiple transitions
Find all related news
News
15/11/2022

FEPS delegation at COP27

FEPS delegation was present at COP27, with the strategic objectives of mobilizing climate finance for […]
28/09/2021

FEPS joins the European Alliance for a Just Transition

We are delighted to announce that FEPS joins the European Alliance for a Just Transition […]
28/04/2020

FEPS article series on intergenerational solidarity and the need for climate justice

This article series aims to inform on the ways in which intergenerational solidarity can be […]
27/04/2020

New Policy Report on the Green Deal: achieving sustainability and equity in a post-COVID-19 era

The Foundation for European Progressive Studies (FEPS), together with the Institute for European Environmental Policy […]
Find all related in the media
In the media

La doble transición verde y digital como arma contra los depredadores de la energía

by Crónica Global 18/11/2022
Article by Pau Solanilla, Director of Fundació Rafael Campalans, ahead of the FEPS-Campalans event 'Figuring out the Twin Transition'

El reto de las Smart Cities, combinar digitalización y sostenibilidad

by ABC 18/11/2022
Article by Pau Solanilla, Director of Fundació Rafael Campalans, ahead of the FEPS-Campalans event 'Figuring out the Twin Transition'

Los retos de la doble transición sostenible y digital

by elEconomista.es 16/11/2022
Article by Pau Solanilla, Director of Fundació Rafael Campalans, ahead of the FEPS-Campalans event 'Figuring out the Twin Transition'

‘Wave of poverty’ expected to hit Brussels in winter, says social welfare expert

by Euronews 08/09/2022