The Transformation of EU Economic Union: How Enhanced Central Fiscal Capacity Sows the Seeds for the Future
Authors: Albuquerque Matos Nuno 
Published: February 2025

p class="MsoNormal"span style="font-size:10.0pt;line-height:107%;font-family:
"AdvOTecfccdcf_I",sans-serif;mso-bidi-font-family:AdvOTecfccdcf_I"By endowing
the European Union (EU) with enhanced central /spanspan style="font-size:
10.0pt;line-height:107%;font-family:AdvOTecfccdcf_I+fb;mso-bidi-font-family:
AdvOTecfccdcf_I+fb"fi/spanspan style="font-size:10.0pt;line-height:107%;
font-family:"AdvOTecfccdcf_I",sans-serif;mso-bidi-font-family:AdvOTecfccdcf_I"scal
capacity, Next Generation EU (NGEU) marks an important shift in supranational
economic policy. The EU has evolved from intergovernmental coordination and /spanspan style="font-size:10.0pt;line-height:107%;font-family:AdvOTecfccdcf_I+fb;
mso-bidi-font-family:AdvOTecfccdcf_I+fb"fi/spanspan style="font-size:10.0pt;
line-height:107%;font-family:"AdvOTecfccdcf_I",sans-serif;mso-bidi-font-family:
AdvOTecfccdcf_I"scal surveillance of Member States, to disposing of a more robust,
autonomous, and e/spanspan style="font-size:10.0pt;line-height:107%;
font-family:AdvOTecfccdcf_I+fb;mso-bidi-font-family:AdvOTecfccdcf_I+fb"ff/spanspan style="font-size:10.0pt;line-height:107%;font-family:"AdvOTecfccdcf_I",sans-serif;
mso-bidi-font-family:AdvOTecfccdcf_I"ective instrument for intervention in the
EU economy. These improvements derive from some notable innovations NGEU brings
about. However, this instrument also holds several shortcomings usually
associated with the EU budget, namely regarding the nature of funding, the type
of expenditure, and the overly intergovernmental legislative process.
Accordingly, NGEU is described as a bridge between past and future. The paper
analyses each of these issues by looking at the United States of America (US)
experience and /spanspan style="font-size:10.0pt;line-height:107%;
font-family:AdvOTecfccdcf_I+fb;mso-bidi-font-family:AdvOTecfccdcf_I+fb"fi/spanspan style="font-size:10.0pt;line-height:107%;font-family:"AdvOTecfccdcf_I",sans-serif;
mso-bidi-font-family:AdvOTecfccdcf_I"nds that the parallelism that is possible
to draw in the di/spanspan style="font-size:10.0pt;line-height:107%;
font-family:AdvOTecfccdcf_I+fb;mso-bidi-font-family:AdvOTecfccdcf_I+fb"ff/spanspan style="font-size:10.0pt;line-height:107%;font-family:"AdvOTecfccdcf_I",sans-serif;
mso-bidi-font-family:AdvOTecfccdcf_I"erent matters is substantial and could
serve as a useful inspiration for the EU going forward. Lastly, the /spanspan style="font-size:10.0pt;line-height:107%;font-family:AdvOTecfccdcf_I+fb;
mso-bidi-font-family:AdvOTecfccdcf_I+fb"fi/spanspan style="font-size:10.0pt;
line-height:107%;font-family:"AdvOTecfccdcf_I",sans-serif;mso-bidi-font-family:
AdvOTecfccdcf_I"nancial component of the Draghi report on the future of
European competitiveness is also addressed, as it suggests that this recent
experience may be a useful blueprint for the future of EU /spanspan style="font-size:10.0pt;line-height:107%;font-family:AdvOTecfccdcf_I+fb;
mso-bidi-font-family:AdvOTecfccdcf_I+fb"fi/spanspan style="font-size:10.0pt;
line-height:107%;font-family:"AdvOTecfccdcf_I",sans-serif;mso-bidi-font-family:
AdvOTecfccdcf_I"nances./span o:p/o:p