Dr. Kieran McQuinn:

We have not had much detail on the particulars of any reform of the fiscal rules. Much of the discussion has been more general and relates to the need for greater capital investment to be permitted under them. Under the existing rules, some form of investment is allowed; it is not that investment is prohibited. The point has been made that, over the past eight or nine years and reflecting what many people would argue was the flawed policy response to the financial crisis, Europe has suffered from an absence of significant investment across many economies. This has inhibited the growth performance of European economies during that period. It is worth remembering that most European economies were averaging approximately 1.5% growth before the pandemic.

There is a recognition among policymakers. It is interesting to note that, even in the ECB, which previously had a hawkish reputation as far as its stance on these matters was concerned, there is a growing debate about the need for any revision of the fiscal rules to be broader and more comprehensive and, in particular, to allow for greater investment to occur across European economies. I do not believe that we have yet seen particular details emerging about the likes of state aid being addressed, but the discussion is progressive in terms of more investment being facilitated.