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Improving the political sustainability of Next Generation EU

The EU can improve the political sustainability of Next Generation EU by making it a long-term structure

Björn Bremer, Theresa Kuhn, Maurits J. Meijers, Francesco Nicoli

Issues about a populist, Eurosceptic reaction have actually long been a challenge to the financial integration of the EU. This column utilizes a brand-new survey fielded in five nations– France, Germany, Italy, the Netherlands, and Spain– to determine the credibility of those concerns. The results suggest that support for a joint European fiscal instrument is high; that the pandemic recovery plan concurred under ‘Next Generation EU’ is a well-tailored instrument; and that making the recovery fund irreversible would provide a course to political sustainability and gather prevalent support among European residents.

The EU member states’ speedy arrangement to set up a significant, albeit momentary, stabilisation capability and to release Eurobonds as part of the Recovery and Resilience Center (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 after-effects of the euro crisis, policymakers were not able to make considerable development with financial integration, which is seen by numerous (e.g. Jones et al. 2016) as an essential condition for making sure the long-term stability of the euro area.

One important challenge to financial integration has actually been the concern of national governments about a Eurosceptic and populist reaction of their voters. Are these issues legitimate? Existing research suggests that policymakers have actually overstated public scepticism towards fiscal combination of the EU (Daniele and Geys 2015). Considerable support for EU-level joblessness stabilisation existed well before the pandemic (Vandenbroucke et al. 2018); financial combination is well received by European residents and ‘areas of contract’ are undoubtedly possible (Beetsma et al. 2020); and Germans and Italians prefer some kind of joint financial obligation emission over a break up of the euro location (Baccaro et al. 2020). These studies show that some type of fiscal combination is met adequate assistance from European people, under the right circumstances and when properly created.

Nevertheless, the political context of the pandemic in addition to the design of the RFF fund will likely affect citizens’ preferences for fiscal combination and risk-sharing. As such, existing research is not well placed to describe citizens’ preferences towards the specific kinds of the pandemic recovery fund It stays to be seen what Europeans consider the pandemic recovery fund and which policy characteristics drive assistance and opposition.

Public support for a European pandemic recovery fund

To address these questions, we conducted a new experimental study on public assistance for various styles of a European pandemic healing fund as they were gone over by policymakers in July 2020. We fielded the survey in five European nations (France, Germany, Italy, the Netherlands, and Spain) instantly prior to and after the definitive European Council top. The sample in each country is nationally representative in regards to age, gender, education, local distribution, and– to a slightly lesser degree– income and occupation.

In our conjoint survey experiment, respondents were asked to compare and evaluate possible alternative program circumstances for a European pandemic recovery fund Participants were presented with 2 such policy options side by side, and asked to show their favored circumstance.

The content of these policy plans was randomised throughout a variety of dimensions: (i) function of the programme, (ii) sources of financing, (iii) solidarity in payment, (iv) distribution of the funds, (v) duration of the program, and (vi) governance of the programme. While a few of these functions might sound technical and abstract, we put terrific care in guaranteeing that they existed in the most simplified and concise method possible, embracing a language that is easy to comprehend.

To assess the average impact of each alternative on a provided policy measurement on assistance for a programme alternative, we calculate the typical minimal component impact (AMCE) of each alternative on decreasing or increasing assistance (Figure 1). Simply put, whatever else being equivalent, the values in Figure 1 tell us to what degree a specific choice boosts or reduces assistance. We reveal the variation across nations in Figure 2, which displays the predicted possibility to support a pandemic recovery fund circumstance if it consists of the policy option in concern.

Figure 1 Estimated AMCEs of different dimensions of the pandemic recovery fund.

Note: The figure reveals the average component-specific minimal effect (ACME) of a change in the worth of one of the 6 measurements on the probability that respondents select a plan. Reactions from the complete sample are consisted of and 95% confidence intervals are revealed. Respondents saw 3 versions of the experiment. N = 45,006.

Figure 2 Approximated marginal ways of various measurements of the pandemic recovery fund.

Note: The figure reveals the conditional minimal ways (MMs) and 95% confidence periods for all levels of the characteristics by nation. MMs denote the anticipated possibility of support for plan if it consists of the level in question, regardless of all other levels. As such, MMs show the level of favourability towards policy bundles that share a particular policy level. N = 45,006.

Figures 1 and 2 show that in terms of the purpose of the RRF, residents have a strong preference for accompanying health care steps with an extra goal: If an RRF policy package likewise focuses on economic healing, public assistance boosts by 11 percentage points compared to the baseline. The ‘green deal’ variation is likewise appreciated: if a pandemic recovery fund also targets at dealing with climate modification, assistance boosts by 7 percentage points with respect to a program directed at supporting health care systems only. When it comes to financing, respondents are somewhat sceptical about the concept of joint European loaning: usually, it reduces support by about four portion points with regard to the alternative of repurposing existing resources. Notably, this effect is negative in all countries, including Spain and Italy, but the magnitude of this effect is small. Likewise, the average result of joint repayment (through grants) is also somewhat negative and decreases assistance by 3 portion points. On this measurement, however, differences in between countries are starker, with Spaniards and Italians highly supporting grants, while residents of other countries favour loans (see Figure 2). On all other dimensions, public opinion in all countries is much more comparable and there is a clear pattern: citizens prefer circulation on the basis of monetary requirement instead of on size, long-term duration rather than short-term, and Council decision-making instead of Commission or self-governing nationwide decisions.

While Figures 1 and 2 are helpful about how specific design choices affect public opinion, they just inform part of the story. In particular, they do not reveal to what level specific combinations of policy options find public assistance. Utilizing participants’ rankings of each RRF circumstance as an additional reliant variable, we present the aggregate levels of assistance for 4 alternative packages in Figure 3: the least-liked package; the most-liked package; the RRF as it was concurred in the Next Generation EU programme; and a permanent version of the RRF, which we identify ‘Permanent Next Generation EU’ (see Table 1).

Table 1 Circumstance structure of 3 picked European pandemic recovery fund situations

Note: The Next Generation EU circumstance is operationalised here as being administered by the European Commission. In practice, the Council can ask for a ‘brake’ on the Commission’s assessment, which the Commission is unlikely to neglect.

Here, we supply 2 estimates: a conservative quote that counts neutral views of a healing fund scenario as opposition, and the basic view in which we just consist of those who have unfavorable or positive views of a plan (leaving out those who had actually revealed neutral views). Support for the least-liked bundle differs from a minimum of 33% of participants (in the conservative quote) to an optimum of 56%. Support for the most liked package differs from a minimum of 57% in the conservative estimate to well over 80%. The picture for the actual RRF arrangement (determined as a scenario with health care and economy focus, joint debt, grants instead of loans, distribution depending on requirement, momentary period, and Commission governance) is less specific, with support varying from 47% in the conservative quote to about 69%. However, if policy-makers were to move towards a permanent RRF, this would render the arrangement definitely politically sustainable, with assistance varying from a minimum of 50% to about 72%.

Figure 3 Projected levels of assistance for different versions of the pandemic healing fund

Keep in mind: The figure reveals the predicted level of support for four selected plans; 95% self-confidence levels are revealed. Participants were asked to rate bundles on a scale from one to 5. The ‘conservative price quote’ counts individuals who picked three instead of the package; the other design drops all respondents who selected 3.

The roadway from the euro crisis to the EU’s first attempt at producing a fiscal capability has been a long one. Importantly, we find that assistance for a joint European financial instrument is high which the RRF concurred under ‘Next Generation EU’ is a well-tailored instrument for the purpose, a minimum of according to citizens in the five countries studied. While citizens are not enthusiastic about common financial obligation, this problem is not important enough for citizens to adversely evaluate the program as a whole. Transforming the RRF into an irreversible fund to handle future crises would supply a clear path to even more political sustainability– ensuring widespread political support amongst European people.


Baccaro, L, B Bremer and E Neimanns (2020 ), “Everybody Thinks that Germans Oppose “Coronabonds”: Our Research Demonstrates how They’re Incorrect”, Washington Post Blog Monkey Cage, 20 April.

Beetsma, R, B Burgoon, F Nicoli, A de Ruijter and F Vandenbroucke (2020 ), “After polarisation: Steady agreement on European shared help is possible”,, 21 August.

Daniele, G and B Geys (2015 ), “Public support for European financial integration in times of crisis”, Journal of European Public Policy, 22( 5 ): 650– 670.

Corsetti, G, A Erce and A Garcia Pascual (2020 ), “Perpetual bonds are not the very best way to finance the European Recovery Fund”,, 14 Might.

Garicano, L (2020 ), “Towards a European Restoration Fund”,, 5 May.

Giavazzi, F and G Tabellini (2020 ), “Covid Continuous Eurobonds: Collectively guaranteed and supported by the ECB”,, 24 March.

Jones, E, R D Kelemen and S Meunier (2016 ), “Failing Forward? The Euro Crisis and the Incomplete Nature of European Integration”, Comparative Political Studies, 49( 7 ): 1010– 1034.

Vandenbroucke, F, B Burgoon, T Kuhn, F Nicoli, S Sacchi, D Van Der Duin and S Hegelwald (2018 ), “Risk Sharing when Joblessness Strikes: How Policy Design Influences Public support For European Joblessness Insurance Coverage”, University of Amsterdam: AISSR Policy Report Nr 1.

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