Taking the challenge: A joint European policy response to the corona crisis to strengthen the public sector and restart a more sustainable and social Europe

Jo Ritzen, Javi Lopez, André Knottnerus, Salvador Pérez-Moreno, George Papandreou & Klaus F. Zimmermann

#2020-015

Towards the end of 2020 the economies of many EU countries will be in serious disarray due to the corona crisis. In the attempt to regain employment and production, EU member state governments will be tempted to fall back into the 'old normal' - over the thorny alternative of employing a policy of 'creative destruction'. Here we argue in favour of a more visionary strategy to achieve sustainability and to further a social Europe with a stronger public sector. A strong Europe is the solution and not the problem for the future of the continent. EU cooperation implies joint Euro area monetary funding (ECB) and joint Euro area borrowing (ESM or otherwise), but only conditional on strong commitments for sustainable development, an improvement of the public sector, joint taxation as well as for sound fiscal behaviour.

Keywords: Corona crisis, Europe, employment, economic development, environmental sustainability, social Europe, education, health, ECB, sovereign long-term interest rates, conditionalities, taxation.

JEL Classification: I00, J20, H63, H74, O38, O40, O43, O44, E62, E43, Q58, F18, F23,O52 R30, I25, F30, G15, H25, H87

  


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