Economy and Development

Economy and Development

During 2020, under the decisive action of the new European Commission chaired by Ursula von der Leyen, and backed by the European Parliament, projects that the CSF have been carrying out for some time, starting with the European Green Deal, have been included in the political agenda. This trend has been reinforced by the, sometimes landmark, responses – starting with Next Generation EU (NGEU) – to counter the economic effects of the pandemic. The idea of a large multiannual European investment plan for the “double transition”, ecological and digital, financed by European debt (with 30-year maturities) and the introduction of new own resources, is thus taking shape.

In this new phase, the CSF aims to focus both on strengthening the opportunities offered by new instruments, and rethinking some of those already in place. Therefore, in 2021, the focus will be on exploring the characteristics and impact that both the creation of European debt and the introduction of European taxes may have. The debate will be between those who consider the NGEU measures temporary and exceptional, and a response to a temporary shock such as Covid-19, and those who instead consider them a step in the direction of the EU’s permanent fiscal capacity, i.e. a fiscal union; a topic that will probably be the focus of the much awaited Conference on the Future of Europe. This is the reason why it will be important to maintain the central institutional role of the Union’s multiannual budget, gearing it to the production of “European public goods” (human capital, health, research, defence, migration management) and equipping it with adequate resources.

In recent years, the CSF has been committed to the issue of ecologically sustainable development, in the context of the fight against climate change, which now has two fundamental pillars, namely the Green Deal and NGEU. The CSF has stressed the importance of carbon pricing, also in the form of carbon border adjustments, which the von der Leyen Commission is in the process of turning into a legislative proposal. However, there are many pieces to put together to decarbonize the economy. Cities will be called upon to play a key role in the “ecological transition”, a role that could be financially supported by redefining the objectives of the European Stability Mechanism (ESM). Furthermore, the EU should set up a federal structure (on the model of the US NASA in the space field) that can focus research and investments on energy transition. In this sense, the CSF aims to explore the possibility of creating a European Community for Energy and the Environment, which could arise from a redesign of EURATOM’s mission.

Regarding the EU’s external dimension, the CSF considers that priority should be given to defining a “development plan with Africa”. The Juncker Commission had already launched a first “European External Investment Plan”, for interventions in African countries. The von der Leyen Commission has reiterated the importance of a partnership between the EU and Africa, especially in the face of the Covid-19 challenge. Important signals are coming from the African continent, with the growing role of the African Union (which is also examining the creation of a common currency area) and with the planned creation of an African Continental Free Trade Area (AfCFTA). The CSF aims to explore both the possible priority investment sectors (starting with energy and water, in connection with the European Green Deal) and the institutional reference framework, centred on the African Union.

As regards two other key components for the EU’s external economic dimension, such as international trade and currency, please refer to the section “Governance of Globalization”.

(From CSF’s 2021 Guidelines - approved on 31 October 2020)

 

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