🇪🇺 Fiscal policy is once again central to Europe’s future. With defence, energy, and demographic change reshaping public priorities and budgetary choices, France and Germany face a shared question: How should national and European fiscal frameworks adapt to these new realities?

🇪🇺 Fiscal policy is once again central to Europe’s future. With defence, energy, and demographic change reshaping public priorities and budgetary choices, France and Germany face a shared question: How should national and European fiscal frameworks adapt to these new realities?

🇪🇺 A rare moment: senior #French and #German fiscal officials will meet in Paris to discuss Europe’s budgetary future. At a time when almost every European country faces tighter budgets and rising investment needs, this conversation matters. 🧵

++next Friday, Paris++

@eco_avant_garde @DezernatZ For more information and registration :

More info:

9/ Read the full report here 👉 https://t.co/LYUNDBh8kP 🇪🇺And explore more EMPN work on Europe’s fiscal, monetary, industrial, and energy policy on our new digital home: https://t.co/mAgFW2YlhI

8/ And it offers concrete recommendations for aligning fiscal methodology with legal commitments - from EU-level guidance to reforms of Germany’s “Normallage” approach.

7/ The study shows how EU and German law already provide interpretive space to integrate medium-term effects of #employment, #equality, and #climate policy into potential output estimation.

6/ Recognising this is not about politicising fiscal surveillance. It’s about legitimising it: ensuring that the analytical tools used in Brussels and Berlin respect the treaties and constitutions they serve.

5/ Today’s method largely ignores these legal obligations, even when policies clearly lift medium-term productive capacity. That creates a gap between what the #law demands and what the #numbers reflect.

4/ The law does allow (and sometimes requires) these judgements to be aligned with constitutional and EU objectives: ✔ full employment ✔ gender equality ✔ environmental sustainability

3/ "Potential output" shapes Europe’s authorised fiscal space. But the way it’s estimated embeds implicit value judgements: what counts as “normal” employment, capacity, or growth.

2/ This paper picks up where last week’s analysis left off — showing that #PotentialOutput isn’t purely #technical, but rests on #legal and #normative choices. Prev. thread 👉

📘 Our new EMPN publication on #Norms Behind #Numbers Europe’s #FiscalRules rely on a concept that isn’t as “technical” as it looks: #PotentialOutput. Here’s why its legal foundations matter. 🧵

1/ 🇪🇺 Europe’s budgets are tightening — just when investment is most needed. Europe must invest in energy, defence, innovation, and care, yet current fiscal rules mostly count the costs of investment, not the growth they generate. 🧵

🚀 the @EMPN_eu has a digital home! Check out our new website to see who is involved and dive into research from across the network like the new paper on policy dependent fiscal policy with contributions from across 🇪🇺. 🙏 @Lsuttors @sm_gottschalk and everybody else involved!

In this paper, we propose to make potential output estimates in EU fiscal rules policy-responsive in assessing fiscal space via debt sustainability analysis. Allow public investment, R&D expenditure, and labour-supply reforms to affect potential output and fiscal space! @EMPN_eu

Europe's debt rules ignore the real power of investment. 🤯 *new paper* @EMPN_eu EU DSAs only see the costs of investment (e.g., in infrastructure or R&D), but largely exclude their positive, long-term impact on potential #growth. This makes sound policy fiscally unattractive.

7/ Read here 👉 https://t.co/vbVabAKU6H #FiscalPolicy #PublicInvestment #EuropeEconomy #EUbudget #Macroeconomics

6/ The paper is published today on https://t.co/AK67lgrWIY — our new digital home. It joins 70+ publications from the European Macro Policy Network (EMPN), a coalition of think tanks rethinking Europe’s economic foundations for prosperity, sustainability and sovereignty. 🌐