News Archive

The European Union’s recovery plan that has been adopted in response to the coronavirus crisis is a game changer in terms of European economic policy integration: NextGenerationEU is larger than any other stimulus package passed by the EU in previous crises. Together with the EU’s long-term budget a total of EUR 1.8 trillion will be spent to boost and modernize Europe’s economy with major priorities set in the areas of digitalization and climate change.

This Working Papaer analyses the relation between Portugal’s government budget balance and current account balance from 1999  – when Portugal joined the Euro – until 2019. The study arrives at three main conclusions: First, a tightening of fiscal policy improves the external balance of the Portuguese economy, although not substantially. Second, the share of public consumption on GDP has a negative impact on the current account balance. This means, that any policy that stimulates economic activity leading to an increase in public consumption needs to be applied carefully.

The implementation of recovery funds under the EU’s Covid-19 recovery program NextGenerationEU should be aligned with business cycle phases. This could ensure that financial support will have the most even and efficient impact across regions. This is one of the key conclusions derived from this EconPol Working Paper. The study analyzed the impact of the European Structural and Investment Funds on regional development over the period 1986–2018, identifying lessons for the EU's Covid recovery program NGEU.

The latest OECD tax reform will affect only 78 of the world’s 500 largest companies and only about 37 European companies, this EconPol Policy Brief reveals. The number of companies is so low, mainly because the tax applies only to companies with revenues above USD 20 billion which earn a rate of return on revenue above 10%. Reducing the revenue threshold for multinational companies from USD 20 billion to EUR 750 million would increase the number of companies affected by a factor of 13.

The EMU should create monetary and fiscal mechanisms to safeguard its irreversibility in exceptional situations, according to this EconPol Working Paper.