Headwind to headroom

• Robert Schuman Centre for Advanced Studies
• Department of Political and Social Sciences

Join Moritz Rehm, postdoctoral researcher at Saarland University, as he presents his recent research at the Political Economy Working Group.

The European Union's debt and financial assistance have become increasingly intertwined over the past two decades, gaining significance through successive crises, requiring fiscal innovation. Although fiscal policy remains a national competence and the European treaties on common debt have largely remained unchanged, the EU’s borrowing capacity has enabled it to provide substantial loans and grants, reaching approximately €672 billion in 2020. Recent developments, such as the diversified funding strategy, have streamlined EU debt issuance towards sovereign-style borrowing, while the use of grants to support member states has drawn comparisons with early US federal debt consolidation. Additionally, since 2022, the EU has become Ukraine’s largest financial supporter through multiple rounds of loans and grants. While the general framework has remained stable, the EU’s financial power has noticeably expanded in recent years.

This research project examines the evolution of this financial power and its impact on financial assistance mechanisms. It analyses the EU’s budgetary capacity to secure substantial public and market borrowing and how this has influenced intra-EU financial solidarity and lending to third countries, effectively positioning the EU as a stabiliser and lender of last resort. Tracing developments back to the early European Economic Community (EEC), this study fills a gap in the literature by exploring the institutional and market factors that have shaped the EU’s fiscal capacity over time and assessing the implications for its emerging financial statecraft.

Moritz Rehm is a postdoctoral researcher at the Department of European Social Research at Saarland University. His research focuses on the political economy of European integration, in particular the impact of crises on the structure of EU financial assistance and the institutional developments of the Economic and Monetary Union. He received his PhD from the University of Luxembourg in 2023. His recent work has been published in the Journal of Common Market Studies and Politics and Governance.

This seminar will take place in hybrid mode. Please register to receive to Teams link.