COVID-19, Trust and Solidarity in the EU

Covid Challenges and a Way Forward; Trust in Government; Common Debt; Sovereign Bank Nexus; Green Consumerism; Government Spending Efficiency; Structural Tax Reforms; Offshore Tax Evasion
Renewable Energy; Public Procurement in Ukraine; Debt as Insurance; Priorities of Public Buyers; Plugging Carbon Leaks
EconPol Europe’s Annual Conference Material Now Online
Sacrificing lives does not save the economy: that’s the stark message in our latest policy report from Panu Poutvaara and Madhinee Valeyatheepillay. Countries that fail to suppress the pandemic risk a disastrous overburdening of their health care system and patients who could have been otherwise saved die. Short of an effective vaccine, no single measure is enough to stop the pandemic. Instead, societies need a combination of effective social distancing measures, careful hygiene, use of masks in indoor public spaces and contact tracing.
In the light of Covid-19, people across the EU have an increased sense of solidarity for each other, but lower levels of trust in government – particularly those hardest hit by the pandemic. Our policy report reveals the result of a survey conducted in eleven European countries to examine the effect of the COVID-19 pandemic on social trust, reciprocity, solidarity and institutional trust.
The crisis has led to a common European fiscal response in the form of the €750 billion Next Generation EU (NGEU) package agreed by EU leaders in July 2020. But common European debt does not represent a free resource – in the end it has to be serviced in one way or another, by all Member States. Daniel Gros examines the insurance properties of common debt in his EconPol policy report and explains the basics in this short article.
Increases in spreads and liquidity are likely to induce banks to expand their positions in high yield sovereign debt, and relatively more risky bonds. Hernán D. Seoane examines the evidence in his latest policy report.
Is green consumerism beneficial to the environment and the economy? Stefan Ambec and Philippe De Donder study the political economy of environmental regulations to find out.
Government spending efficiency and structural tax reforms have been analysed by
 António Afonso, João Tovar Jalles and Ana Venâncio. They suggest that governments could gain efficiencies with up to 30-40% less spending.
While tax administrations have made considerable progress in fighting tax evasion, it remains a seemingly inextricable part of our world. The measurement of inequality accounts for this fact and this paper from CPB attempts to do so for the Netherlands.
How do you put a price on renewable energy? Natalia Fabra explains.
A new online public procurement system reduces collusion in Ukraine, according to Vitezslav Titl.
Can financial regulation help save the planet? Antonio Cabrales thinks so.
Daniel Gros explains the insurance properties of common debt issuance in the European Union.
Public procurement officials make substantial decisions for public good provision, and their decisions have widespread welfare implications. Sebastian Blesse examines their priorities.
The border adjustment mechanism proposed by the European Commission is designed to reduce imported CO2 emissions. It’s an attractive initiative on paper but not so easy to implement, say Stefan Ambec and Claude Crampes.

EconPol Europe Annual Conference

Our 2020 annual conference is over, but the website lives on. Video of the keynote speech from EU commissioner Johannes Hahn, and our panels on sustaining the future of the EU and what’s next for US/EU/Asia trade relations are all online, along with all the available papers, presentations and articles.
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© EconPol Europe: European Network for Economic and Fiscal Policy Research – ifo Institute – Leibniz Institute for Economic Research at the University of Munich 2020.

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Published: ifo Institute for Economic Research at the University of Munich,
Editor: Juliet Shaw.

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