“New rules and more shared sovereignty are needed in the eurozone” – Corriere.it

Mario Draghi intervenes in the negotiations to reform the Stability Pact to be approved by the end of the year The old rules, which were suspended during the pandemic, were prevented from applying from next JanuaryBut it is now insufficient to meet the common challenges facing us, which opens the door to fiscal union. A negative slide back into the old financial rules would be the worst possible outcome.Draghi writes in his post The Economist, as the articles are known to be unsigned. this is the reason Europe needs “new rules and a greater sharing of sovereignty”. » says the former prime minister.

Green transition and digitization

Draghi says fiscal rules must be strict to ensure credibility in the medium term, and flexible to allow governments to respond to unexpected shocks. Noting that “the current rules are not, and lead to policies that are too loose in times of prosperity and too strict in times of crisis.” The European Commission’s proposal would help solve the problem of cyclicality (measures that exacerbate the fluctuations of the economic cycle, exacerbating recessions). But even if fully implemented, it “would not completely resolve the compromise between hard rules and flexibility”.

Green transition and digitization

The solution is to move “more spending powers to the centre”. Indeed, the problem is no longer to avoid strong-state to weak-state transfers, but to align federal spending and tax incentives with the pursuit of common goals, so that we can be globally competitive in meeting current challenges as well as in the future. The Biden administration is doing it. Europe can achieve a more American equilibrium, if part of the investments needed to achieve common goals – from combating climate change to defense – are made at the federal level. Like the rest It happened during the pandemic with the plan allocating 750 billion for green transformation and digitization. “Borrowing and spending at the federal level would lead to greater efficiency and more fiscal space, as overall borrowing costs would be lower,” explains the former head of the European Central Bank. While national fiscal policies can focus “on reducing debt and accumulating reserves for difficult periods.”

Enlargement of the European Union along with the strengthening of the center

He wrote that such reforms would mean “the consolidation of greater sovereignty and, therefore, would require new forms of representation and centralized decision-making”. Warning about that As the EU expands to include the Balkans and Ukraine, we will have to “avoid repeating the mistakes of the past.”Expanding the periphery without strengthening the centre, otherwise we risk weakening the EU rather than putting it in a position to act.

Strategies that brought prosperity and security to Europe in the past – Dependence on America for security, on China for exports, on Russia for energy – is now “inadequate, uncertain or unacceptable”. He gets to know Draghi and therefore “the only way is a closer union”.