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Exogenous shocks and proactive resilience in the EU

Author

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  • Bartzokas, Anthony

    (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn)

  • Giacon, Renato
  • Macchiarelli, Corrado

Abstract

The Covid-19 pandemic prompted economic policy innovations in response to new exogenous shocks, resulting in economic recovery policies at the national and supranational level. This paper considers the modalities of these policy innovations and their long-lasting effects in the case of the European Union (EU), focusing on the Next Generation EU (NGEU) programme and its centrepiece, the Recovery and Resilience Facility (RRF). We discuss the novelties in the design of the NGEU/RRF in comparison to previous EU structural funds, aimed at reducing regional divergences across the EU. The NGEU is changing the way the EU finances itself as never before had the European Commission borrowed at such large scale and long maturities on financial markets. In the paper, we identify potential gaps in the design of the EU Recovery Funds, due to their focus on thematic clusters with limited linkages to other vertically designed EU programmes, an absence of microeconomics considerations, and likely spending overlap with the Structural and Investment (ESI) Funds. The scope for coordination is evident as, on top of the new RRF Funds, EU countries will have to absorb the unspent ESI Funds from the 2014-20 Multi Financial Framework (MFF) and those recently allocated under the new 2021-27 MFF. Considering these challenges, we articulate a proactive resilience framework for the design and implementation of policy instruments in the EU.

Suggested Citation

  • Bartzokas, Anthony & Giacon, Renato & Macchiarelli, Corrado, 2022. "Exogenous shocks and proactive resilience in the EU," MERIT Working Papers 2022-025, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2022025
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    References listed on IDEAS

    as
    1. Paul De Grauwe, 2014. "The Governance of a Fragile Eurozone," World Scientific Book Chapters, in: Exchange Rates and Global Financial Policies, chapter 12, pages 297-320, World Scientific Publishing Co. Pte. Ltd..
    2. Paul De Grauwe, 2012. "A Fragile Eurozone in Search of a Better Governance," The Economic and Social Review, Economic and Social Studies, vol. 43(1), pages 1-30.
    3. Jérôme Creel & Mario Holzner & Francesco Saraceno & Andrew Watt & Jérôme Wittwer, 2020. "How to Spend it: A Proposal for a European Covid-19 Recovery Programme," wiiw Policy Notes 38, The Vienna Institute for International Economic Studies, wiiw.
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    More about this item

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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