A green fiscal pact

Past crises and consolidation episodes have resulted in major public investment cuts. However, in order to meet the European Union’s climate goals, the additional public investment needed is between 0.5 percent and 1 percent of GDP annually during this decade. How does the EU grapple with just how far-reaching the economic implications of the green transition will be?

In a paper presented at the recent ECOFIN in September, Bruegel Director Guntram Wolff and Senior fellow Zsolt Darvas advocate for a ‘green golden rule’, that exempts net green public investment from the debt and deficit rules of the Stability and Growth Pact. They explain more in detail with Yuyun Zhan in today’s episode.

Read more:

Darvas, Z. and G. Wolff (2021) ‘A green fiscal pact: climate investment in times of budget consolidation’, Policy Contribution 18/2021, Bruegel




The Sound of Economics

Insights, debates, and research-based discussions on economic policy in Europe and beyond. The podcast is produced by Bruegel (https://www.bruegel.org/), an independent and non-doctrinal think tank based in Brussels. It seeks to contribute to European and global economic policy-making through open, fact-based, and policy-relevant research, analysis, and debate. A podcast member of EuroPod.