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Zsolt Darvas and Guntram B. Wolff



Articles by Zsolt Darvas and Guntram B. Wolff

A green fiscal pact: climate investment in times of budget consolidation

September 9, 2021

Budget consolidation in European Union countries should be possible within EU rules, but countries should agree a green fiscal pact to protect net-zero investment.

This paper was prepared for the informal ECOFIN meeting in Ljubljana on 10/11 September 2021. The authors thank Klaas Lenaerts for his excellent research assistance and colleagues at Bruegel (Grégory Claeys, Maria Demertzis, André Sapir, Jean Pisani-Ferry and Simone Tagliapietra) for their feedback and suggestions.

The additional public investment need required to meet the European Union’s climate goals is between 0.5 percent and 1 percent of GDP annually during this decade. Increasing green public investment while consolidating deficits will be a major challenge. While our simulations show that budget consolidation can be

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The EU’s Multiannual Financial Framework and some implications for CESEE countries

September 12, 2018

Bruegel scholars Zsolt Darvas and Guntram Wolff contributed to the September 2018 edition of the OeNB’s Focus on European Economic Integration.

The European Union’s budget – which is fundamentally different from the budgets of federal countries and amounts to only about 1% of the EU’s gross national income – continues to be heavy on agricultural and cohesion spending. The literature shows that the EU’s common agricultural policy (accounting for 38% of EU spending from the current budget) provides good income support, especially for richer farmers, but is less effective for greening and biodiversity and is unevenly distributed. The EU’s cohesion policy (accounting for 34% of current EU spending) contributes to convergence, but it is unclear how strong and long-lasting the

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Rethinking the European Union’s post-Brexit budget priorities

March 19, 2018

There will be a €94 billion Brexit-related hole in the EU budget for 2021-27 if business continues as before and the United Kingdom does not contribute. The authors show that freezing agriculture and cohesion spending in real terms would fill the hole, but new priorities would then need to be funded by an increase in the percent of GNI contribution.

The issue
The European Union’s budget is fundamentally different from the budgets of federal countries and amounts to only about one percent of the EU’s gross national income. The literature shows that the Common Agricultural Policy (CAP), which takes 38 percent of EU spending, provides good income support, especially for richer farmers, but is less effective for greening and biodiversity and is unevenly distributed. Cohesion

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An anatomy of inclusive growth in Europe

October 27, 2016

This Blueprint offers an in-depth analysis of inequalities of income and wealth in the EU, as well as their causes and consequences. How evenly are the benefits of growth distributed in our economies, and what does this mean for fairness and social mobility? How could and should policymakers react?

Key findings
Contrary to many perceptions, income inequality in the EU has fallen over the past two decades. In the EU as a whole, and in most EU members, absolute poverty is rare and income inequality is low. Strong welfare states have offered protection against inequality.
However, income inequality has in some cases increased, measured on a country-by-country basis. Unemployment remains high in a number of member states, while the intergenerational divide between the young and the old has widened. Social mobility is weak, in particular in the more unequal economies of southern Europe, limiting opportunities for the children of poor and disadvantaged families.
High inequality can fuel political disenchantment, and may have played a part in the Brexit vote. High inequality and poverty can boost protest votes in referenda and elections.
Technological change and robotisation will not necessarily increase inequality. However, many routine physical and cognitive tasks will be automated, and workers will need creative and social skills.

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