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New economic governance rules
On 26 April 2023, the European Commission published a package of three proposals to revise the EU's economic governance framework: a regulation to replace the current preventive arm of the stability and growth pact (SGP), an amending Council regulation on the corrective arm of the SGP, and an amending Council directive to strengthen the role of independent fiscal institutions. The main proposal on the preventive arm is to be adopted through the ordinary legislative procedure with the European Parliament ...
EU tax achievements: Looking back (and forward)
EU Member States' public finances have been under considerable strain owing to both the COVID-19 pandemic and the twin energy-cost-of-living crisis. To bolster EU economies in the wake of these challenging times, various initiatives were taken forward at EU level to simplify tax compliance for businesses operating across borders, and to ensure that taxpayers were paying their fair share. As the current Commission's mandate approaches its conclusion, this briefing looks at some notable achievements ...
The impacts of recent inflation developments on the EU finances
The focus of this study is the effect of inflation on the ongoing implementation of the current MFF on an aggregate level. The relevant inflation impacts and the channels via which they take effect are presented and analysed for the MFF and the EU revenue system. The study then maps and discusses policy options to mitigate these effects regarding the ongoing MFF and NGEU implementation, as well as with a view to the ongoing MFF mid-term revision.
Study in Focus: Options for a stronger and more agile EU budget
The full study presents recommendations, drawing on several scenarios, for how the EU budget could be recast to enable it to be more agile and responsive in dealing with new and future challenges requiring EU-level expenditure or lending.
Plenary round-up – March I 2023
Among the highlights of the March I plenary session was a debate on the conclusions of the special European Council meeting of 9 February and the preparation of the European Council meeting of 23-24 March 2023, with Charles Michel, the President of the European Council. Members also debated the failure of the Silicon Valley Bank and its implications for European financial stability, a common EU response to save lives at sea, the need to ensure transparency and accountability in the light of alleged ...
Towards EU leadership in the space sector through open strategic autonomy - Cost of non-Europe
This 'cost of non-Europe' report looks at the potential benefits of efficient, ambitious and united EU-level action in the space sector. The report finds that to enable the European space sector to benefit from open strategic autonomy, and to ensure EU access to and use of space, including for its security, the EU must act decisively. Moving away from fragmentation could bring large benefits, amounting to at least €140 billion per year by 2050.
Assessment of the EU fiscal framework: Updating estimates of the cost of non Europe
Without effective coordination of fiscal policies and active supervision of external and internal imbalances, significant negative spillover effects can occur between Member States participating in economic and monetary union and across the EU more widely. A credible fiscal framework and related rules should therefore be designed and enforced, to ensure that Member States pursue sound public finance policies that keep deficits within the range where financing can be secured. This approach, coordinated ...
Public finances in Euro Area Member States: Selected indicators - November 2022
This document presents selected indicators on public finance for the Euro Area Member States and the Euro Area as a whole. For each indicator, it provides a short explanation and the data sources. The final section presents a short overview of the main indicators used by the European and other international institutions to assess debt sustainability.
Monitoring Complex Financial Instruments in Banks’ Balance Sheets
European banks have substantial investments in assets that are measured without directly observable market prices (mark-to-model). Financial disclosures of these value estimates lack standardization and are hard to compare across banks. These comparability concerns are concentrated in large European banks that extensively rely on level 3 estimates with the most unobservable inputs. Although the relevant balance sheet positions only represent a small fraction of these large banks’ total assets (2.9% ...
Financial institutions' exposures to fossil fuel assets
Many financial institutions have warned that the transition to a low-carbon economy could cause a major shock to fossil fuel valuation, with the potential for systemic risk. This paper discusses disclosure commitments and empirical evidence in order to gauge the exposure of banks towards fossil fuel assets as well as the consequent implications for banks’ balance sheets and for financial stability.