What Kind of EU Fiscal Capacity? Evidence from a Randomized Survey Experiment in five European Countries in Times of Corona

Roel Beetsma*, Brian Burgoon, Francesco Nicoli, Anniek de Ruijter, Frank Vandenbroucke

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Based on a conjoint survey experiment we explore the support among European citizens for a European Union (EU) budgetary assistance instrument to combat adverse temporary or permanent economic shocks hitting Member States. Suitably designed, there is substantial support for such an EU instrument generally and across the sample countries. Support is broader when budgetary support is conditional on debt reduction in good times and on monies being spent in specific policy areas, in particular healthcare and education. Support also increases when there is a role for the European Commission in terms of monitoring and providing guidance. However, there is little support for policy packages that terminate a program and impose fines in the case of non-compliance. Further, there is broad acceptance of programs that entail long-run redistribution towards poorer countries. Financing the assistance through a progressive tax increase is more popular than through a flat tax increase. In general, there is substantial scope for constructing assistance packages that command majority support in all sample countries, particularly if programs have spending conditionality and progressive tax financing.
Original languageEnglish
JournalEconomic Policy
Number of pages49
ISSN0266-4658
DOIs
Publication statusPublished - 18 Jan 2022

Bibliographical note

Epub ahead of print. Published online: 18 January 2022.

Keywords

  • EU fiscal capacity
  • Conjoint experiment
  • EU support instruments
  • Temporary or permanent shocks
  • Stabilization
  • Conditionality
  • Taxation
  • Redistribution

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