Thursday, 05 November 2020 08:36

The EU Can Improve the Political Sustainability of Next Generation EU by Making it a Long-term Structure

The EU member states’ swift agreement to set up a far-reaching, albeit temporary, stabilisation capacity and to issue Eurobonds as part of the Recovery and Resilience Facility (RRF) in July 2020 took many political observers by surprise (e.g. Corsetti et al. 2020, Garicano 2020, Giavazzi and Tabellini 2020). After all, in the aftermath of the euro crisis, policymakers were unable to make significant progress with fiscal integration, which is seen by many (e.g. Jones et al. 2016) as a necessary condition for ensuring the long-term stability of the euro area.

One important obstacle to fiscal integration has been the concern of national governments about a Eurosceptic and populist backlash of their voters. Are these concerns valid? Existing research suggests that policymakers have overestimated public scepticism towards fiscal integration of the EU (Daniele and Geys 2015). Substantial support for EU-level unemployment stabilisation existed well before the pandemic (Vandenbroucke et al. 2018); fiscal integration is well received by European citizens and ‘spaces of agreement’ are indeed possible (Beetsma et al. 2020); and Germans and Italians prefer some form of joint debt emission over a breakup of the euro area (Baccaro et al. 2020). These studies show that some form of fiscal integration is met with sufficient support from European citizens, under the right circumstances and when appropriately designed.

However, the political context of the pandemic as well as the design of the RFF fund will likely affect citizens’ preferences for fiscal integration and risk-sharing. As such, existing research is not well placed to explain citizens’ preferences towards the specific forms of the pandemic recovery fund. It remains to be seen what Europeans think about the pandemic recovery fund and which policy characteristics drive support and opposition.

Public Support For a European Pandemic Recovery Fund.
To address these questions, we conducted a new experimental survey on public support for different designs of a European pandemic recovery fund as they were discussed by policymakers in July 2020. We fielded the survey in five European countries (France, Germany, Italy, the Netherlands, and Spain) immediately before and after the decisive European Council summit. The sample in each country is nationally representative in terms of age, gender, education, regional distribution, and – to a slightly lesser extent – income and profession.

In our conjoint survey experiment, respondents were asked to compare and evaluate possible alternative programme scenarios for a European pandemic recovery fund. Respondents were presented with two such policy alternatives side by side, and asked to indicate their preferred scenario. The content of these policy packages was randomised across a number of dimensions: (i) purpose of the programme, (ii) sources of financing, (iii) solidarity in repayment, (iv) distribution of the funds, (v) duration of the programme, and (vi) governance of the programme. While some of these features may sound technical and abstract, we put great care in ensuring that they were presented in the most simplified and concise way possible, adopting a language that is easy to understand.



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