ifo Institute: EU Agreement Shows Solidarity and Ability to Act
With the agreement on an economic recovery fund, the EU has sent an important signal of solidarity, its ability to act, and far-reaching change, according to the assessment of the EU summit outcome by Clemens Fuest, President of the ifo Institute.
He says this is a major difference compared to the euro crisis. At that time only loans were granted, and they were attached to extensive conditions. Now, the fund will support economic recovery of the countries most severely affected by the crisis, with transfers flowing virtually unconditionally. Fuest explains: “With this agreement, the EU is showing that it is undergoing profound change. It also serves as an expression of confidence in the recipient countries.” He goes on to say: “However, the economic recovery will work only if the countries affected undertake considerable reform efforts themselves.” At the same time, he believes further reforms at the EU level are needed: “The EU should become more involved in the provision of European public goods, such as security and defense policy, migration policy, and development aid, and should shift budget funds accordingly.”
