The EU Budgetary Package 2021-2027

03 March 2021

The video of a recent expert discussion hosted by wiiw and including experts from the OeNB, Bruegel and wifo is now online.


On March 1st wiiw hosted a panel discussion on the EU’s budget for 2021-2027. The panel included Thomas Reininger (OeNB), Zsolt Darvas (Bruegel), Margit Schratzenstaller (wifo) and Michael Landesmann (wiiw).

Thomas Reininger’s wiiw Policy Note assessing the EU budgetary package 2021-2027 and  the ‘Next Generation EU’-Recovery Instrument (EURI) was the basis for the panel discussion. In his presentation, the Lead Economist at the Austrian Central Bank (OeNB) looked at the main elements of the budgetary package and provided a detailed evaluation of its implications.

In the discussion, Margit Schratzenstaller, Senior Economist at the Austrian Institute of Economic Research (WIFO), acknowledged the achievement of the underlying agreement. She noted that it develops a range of new instruments, has an important climate policy component, and demonstrates solidarity towards poorer member states. However, she also pointed to its shortcomings. These include reducing some spending items vis à vis the earlier proposed Multiannual Financial Framework, potentially little European added value generated by traditional EU budget lines, and doubts over its effectiveness in mitigating the distributional impacts of the pandemic shock.

Zsolt Darvas, Senior Fellow at Bruegel, particularly challenged the idea that the EURI really is able to act as recovery package. This is because most spending is related to structural investments in poorer EU member states, and less to member states that are particularly affected by the pandemic. He pointed to the lack of adjustments of purchasing power parities in the calculation of underlying GDP indicators, and argued that the foreseen ‘own resources’ tax plans (such as the digital tax) may amount to a shifting of such taxation to the EU level (thus potentially furthering harmonisation), but could therefore constrain national budgets.

A full video of the discussion is available here: