*** The European Union and the European Central Bank have countered the crisis with exceptional means and instruments, also facilitating the use of enormous national budget resources by individual countries. This was a far more incisive response than the insufficient one provided during the global financial crisis and above all during the subsequent sovereign debt crisis.
The pandemic has nevertheless further highlighted the limits of the current European arrangements, which do not provide for a common fiscal capacity. A sufficiently broad capacity, with the possibility of borrowing to finance investment projects or of activating social safety nets and common welfare programmes, would allow a European fiscal policy to stand alongside monetary policy action in countering wide-ranging economic shocks.