The EU should rewrite its fiscal rules /Martin Sandbu, FT, Opinion 2/3/22/. Nevertheless, there are no “one-fit-all” solutions for all EU member countries.

We can count on three building elements for the new fiscal regime that might last until the end of this seven years EU-budget. Firstly, the Rubicon of joint borrowing for cross-border transfers has been really crossed, meaning that the EU can borrow heavily in the coming years.

Secondly, the EU badly needs an investment-intensive growth path, however, there are different avenues for the 27 member countries. The Northern Group of the EU needs to focus on the new high-tech industries instead of the present mid-technologies. The Southern Belt of the Eurozone needs something very different /sun, soil and the sweetness of life/, while the emerging EU economies need a fusion of Europe’s past successes /mainly huge infra projects/ and the future of the EU /new technologies/.

Thirdly, France and Italy are right saying that some types of investment /like digital and green transition/ have the merit to be financed by the budget.

All in all, we need two budgets in one, where the first traditional part should be under 3% of the GDP and the second part – mainly financed by joint borrowing- should be allowed to add an extra 3% to the first one.

Governor Matolcsy, MNB the Central Bank of Hungary

Re “The EU should rewrite its fiscal rules