The Covid-19 crisis has shown the costs inherent in the absence of a “permanent” central fiscal capacity, capable of being rapidly deployed to deal with an exogenous macroeconomic shock, the European Fiscal Board said, on Tuesday 20 October, when presenting its annual report for 2020.
According to the Board, this fiscal capacity should ultimately take the form of a “larger budget for the European Union, financed by own tax revenues, with the capacity to borrow and focusing on European...