Inasmuch as institutional independence allows us to take a more long-term view, central bankers are well-placed to push for a more far-sighted approach. Take fiscal federalism and debt mutualisation, both historically contentious issues. Many, including Germany’s current chancellor have described the Next Generation EU decision as Europe’s Hamiltonian moment, an opportunity to combine EU fiscal capacity with common rules and conditionality.
There is little doubt the NGEU constitutes a tremendous opportunity, but it is still built as a temporary crisis response. For it to become a landmark reform, it needs to be transformed into a permanent mechanism, combining fiscal centralisation with supervision.