It’s always pleasing to see the British Eurosceptic press defeated again: habemus RRF deal! Rumours of the EU’s death were exaggerated as usual 😊 1/8
Now, on substance, the signals are very positive. The taboo of debt mutualisation is broken. Financial solidarity that does not saddle recipients with more debt is an important political moment 2/8
However, with the grants reduced, and the inherently slow disbursement schedule, the RRF is no macroeconomic game-changer 3/8
Institutionally, it is a triumph of the inter-governmental management of the EU, the “federal” bodies (EC, EP) were sidelined. This is reflected in the cuts to the EU-wide programmes to boost the direct grants to member states 4/8
Governance could be a source of headaches as well. Macroeconomic conditionality comes through the back door, with potential political conflicts ahead 5/8
There is no veto right, but a complicated and potentially noisy appeal process 6/8
Can we expect a further push towards fiscal federalisation in the near future? The RRF is enmeshed in the 2021-2027 budget framework, so it would be difficult, and it’s been a painful process so political appetite probably low for long. 7/8
Full musings here media.axa-im.co.uk/content/-/asse… 8/8
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