EP30 · Economy · first published 2020-08-06
The EU recovery fund and fiscal transfers | Tuomas Malinen | Negotiator 30
Tuomas Malinen of GnS Economics walks through the structure of the EU recovery fund and argues it is a permanent transfer mechanism rather than a one-off crisis measure: the allocation criteria do not correlate with Covid, the EU borrows directly into member-state budgets for the first time, and the balanced-budget requirement of Article 310 is bypassed. The conversation covers the German constitutional court's ultra vires ruling, the scale of Italy's debt, the arithmetic of Finland's negotiated outcome, and the case for a referendum.
The EU recovery fund and fiscal transfers | Tuomas Malinen | Negotiator 30
Summary: Tuomas Malinen of GnS Economics walks through the structure of the EU recovery fund and argues it is a permanent transfer mechanism rather than a one-off crisis measure: the allocation criteria do not correlate with Covid, the EU borrows directly into member-state budgets for the first time, and the balanced-budget requirement of Article 310 is bypassed. The conversation covers the German constitutional court’s ultra vires ruling, the scale of Italy’s debt, the arithmetic of Finland’s negotiated outcome, and the case for a referendum.
Key Themes
- Why the fund should be put to a referendum: Discussed from 00:00 onward.
- Cheaper credit was available: the ESM and market rates: Discussed from 02:00 onward.
- Allocation criteria and the Article 310 balance requirement: Discussed from 04:00 onward.
- Is this a fiscal transfer or not — Article 125: Discussed from 06:00 onward.
- The leverage mechanism and the missing federal structure: Discussed from 08:00 onward.
- Downplaying the scale of the debt in public debate: Discussed from 10:00 onward.
- Rating agency warnings and Italy’s retirement age: Discussed from 12:00 onward.
- Italy’s refinancing needs and the banks’ position: Discussed from 14:00 onward.
- The fund as a bribe for staying in the euro: Discussed from 16:00 onward.
- The German constitutional court and ultra vires: Discussed from 18:00 onward.
- Why the ‘exceptional circumstances’ argument fails: Discussed from 20:00 onward.
- The arithmetic of Finland’s negotiated outcome: Discussed from 22:00 onward.
- One-off as a promise — what Macron actually said: Discussed from 24:00 onward.
- Dismantling the welfare state as an optimal strategy: Discussed from 26:00 onward.
- Political backbone and the constitutional law committee: Discussed from 28:00 onward.
- On whose mandate does Finland defer to Brussels: Discussed from 30:00 onward.
- A referendum and what would follow from it: Discussed from 32:00 onward.
- The citizens’ initiative as leverage: Discussed from 34:00 onward.
- Becoming a guarantor of the EU budget — the only exit is leaving: Discussed from 36:00 onward.
- Sweden and Denmark are in: this is no longer only a euro problem: Discussed from 38:00 onward.