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Options to Align the EU Fiscal Framework to Green Public Investment Needs

Author

Listed:
  • Atanas Pekanov

    (WIFO)

  • Margit Schratzenstaller

Abstract

The necessary green transition in the EU requires substantial additional green public investment (GPI) by Member States throughout this decade and beyond. This briefing paper discusses four approaches for a reform of EU fiscal rules to better accommodate higher (debt-financed) GPI: first, an exemption clause for GPI; second, the implementation of a green golden rule; third, a country-specific benchmark share of government expenditures dedicated to GPI recommended by the European Commission; and fourth, an EU Climate Fund. We also discuss these options in relation to the recent Commission proposal from November 2022.

Suggested Citation

  • Atanas Pekanov & Margit Schratzenstaller, 2023. "Options to Align the EU Fiscal Framework to Green Public Investment Needs," WIFO Research Briefs 2, WIFO.
    • Handle: RePEc:wfo:rbrief:y:2023:i:2
    as

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    File URL: https://www.wifo.ac.at/wwa/pubid/70624
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    References listed on IDEAS

    as
    1. Mr. Nathaniel G Arnold & Mr. Ravi Balakrishnan & Ms. Bergljot B Barkbu & Mr. Hamid R Davoodi & Andresa Helena Lagerborg & Mr. Waikei R Lam & Mr. Paulo A Medas & Ms. Julia Otten & Louise Rabier & Chris, 2022. "Reforming the EU Fiscal Framework: Strengthening the Fiscal Rules and Institutions," IMF Departmental Papers / Policy Papers 2022/014, International Monetary Fund.
    2. repec:imf:imfdps:2022/014 is not listed on IDEAS
    3. Zsolt Darvas & Guntram B. Wolff, 2021. "A green fiscal pact- climate investment in times of budget consolidation," Bruegel Policy Contributions 44540, Bruegel.
    4. Jean Pisani-Ferry, 2021. "Climate policy is macroeconomic policy, and the implications will be significant," Policy Briefs PB21-20, Peterson Institute for International Economics.
    5. Ferdinandusse, Marien & Nerlich, Carolin & Téllez, Mar Delgado, 2022. "Fiscal policies to mitigate climate change in the euro area," Economic Bulletin Articles, European Central Bank, vol. 6.
    6. Atanas Pekanov & Margit Schratzenstaller, 2023. "A Targeted Golden Rule for Public Investments?. A Comparative Analysis of Possible Accounting Methods in the Context of the Review of the Stability and Growth Pact," WIFO Studies, WIFO, number 70628.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    EU fiscal framework; EU fiscal rules; green golden rule; green public investment; EU Climate Fund;
    All these keywords.

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