The EU institutions have promised a green recovery from the COVID pandemic. However, this will never be achieved if the fiscal rules of the EU continue to impose austerity measures across the Union. The use of the escape clause of the Stability and Growth Pact in 2020, which has allowed EU countries to increase spending to reduce the economic impact of the crisis, has highlighted how it is high time to change the rules.

Fiscal policy should be an enabler, not the chain that holds economies back. Our fiscal framework needs to be aligned, not at odds, with stated goals of full employment and environmental protection laid out in the Treaty of the European Union.

Greenpeace today sent a letter with trade unions, other NGOs and academics to EU leaders demanding the following:

  • Member states are fiscally enabled and incentivized to flexibly reach the goals of full-employment with decent jobs and a socially just green transition, making sure no one is left behind.
  • A sizable and permanent community EU budget and borrowing capacity is established for promoting investment supportive of the Green Deal and a socially just transition.
  • A coordinated interaction of fiscal and monetary policy is made possible: governments take a primary role in macro stabilization. The ECB pursues an accommodative stance that supports democratically decided fiscal objectives, allowing member states to take full advantage of the fiscal potential afforded to them by monetary policy.

You can read the letter here.