The role of fiscal rules in relation with the green economy
In-Depth Analysis
03-09-2020
This paper discusses the analytical basis for facilitating green public investment under the Stability and Growth Pact fiscal rules. It concludes that additional public debt created by deficit-financed green public investment is likely to increase fiscal sustainability risks. However, such additional risks could be justified to avoid the economic damages (which would also have long run consequences for public finances) arising in the absence of sufficient green public investment. Tre trade off could be improved if green public investment were financed through EU debt.
In-Depth Analysis
External author
Carlo Cottarelli
About this document
Publication type
Policy area
Keyword
- adaptation to climate change
- balance-of-payments deficit
- economic policy
- ECONOMICS
- ENVIRONMENT
- environmental policy
- EU growth strategy
- European construction
- EUROPEAN UNION
- FINANCE
- financing and investment
- green economy
- monetary economics
- monetary relations
- public debt
- public finance and budget policy
- public investment
- reduction of gas emissions
- stability pact
- stability programme
- sustainable development