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REVIEW PAPER
EU Emergency COVID-19 Instruments as an Attempt to Address Deficiencies in the EMU Design
1
Wydział Nauk Ekonomicznych, Uniwersytet Warszawski, Polska
Submission date: 2021-03-10
Final revision date: 2021-05-27
Acceptance date: 2021-10-21
Publication date: 2021-12-28
Corresponding author
Mateusz Szczurek
Uniwersytet Warszawski, Wydział Nauk Ekonomicznych, Długa 44/50, 00-241, Warszawa, Polska
Uniwersytet Warszawski, Wydział Nauk Ekonomicznych, Długa 44/50, 00-241, Warszawa, Polska
GNPJE 2021;308(4):83-102
KEYWORDS
JEL CLASSIFICATION CODES
ABSTRACT
The European Recovery and Resilience Facility (RRF), together with the Temporary
Support to Mitigate Unemployment Risks in an Emergency (SURE) instrument,
constitutes a significant attempt to address deficiencies in the design of the European
Monetary Union (EMU). This article shows the importance of a common fiscal instrument
for the functioning of the EMU. It also shows why, before 2020, such mechanisms were
extremely limited and why making the RRF and SURE permanent will be politically difficult.
Challenges hampering fiscal integration in the EMU, combined with the need for
a permanent fiscal capacity, make the implementation of the RRF from 2021 to 2026 crucial
not only for post-COVID-19 recovery, but also for the long-term economic stability of
the EU. A failure in the RRF’s transition into a permanent federal instrument will require
a more conservative fiscal policy as member state budgets remain crucial for the macroeconomic
stabilisation of asymmetric shocks.
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