Given the novel nature of the instrument, its amount and the difficulties in reaching agreements in the EU on such multi-faceted matters, I must say that the outcome is very satisfactory in terms of underscoring the shared will to move the European project forward. The challenge now is to convert these funds that will be made available to countries into a fiscal impulse that accompanies and steers the recovery effort needed in our productive system. In this connection it would be advisable to prioritise, in the short term, public investment projects in innovation, technological capital, education and lifelong learning, and projects that contribute to the transition to a more sustainable economy, in line with the strategic guidelines recently laid down by the European authorities. The fact that the recovery fund agreed by the Council focuses on medium and long-term objectives means there is still a significant need in the short term to fund the Member States’ budgetary effort in combating the effects of the pandemic. Also, in the medium term it remains necessary to equip the EU with an appropriate institutional framework to address the asymmetrical effect of economic shocks, e.g. through the launch of a common budgetary macroeconomic stabilisation capacity, a cyclical stabilisation function or a pan-European unemployment insurance scheme. That would influence greater pooling of resources and risks in the budgetary arena and would enhance the resilience of the Union as a whole to negative shocks.
Otherwise, persistently high public debt/GDP ratios will leave us chronically vulnerable to the possibility of adverse macrofinancial shocks arising in the future. This programme should include a clear definition of the budgetary objectives and their timeframe, along with details of the measures needed to attain them. It should also be based on a prudent forecast of macroeconomic developments. Further, it should include an appropriate response to possible slippage, and be compatible with an improvement in the quality of public finances. In this respect, it will be a priority on the expenditure side to subject the various items to exhaustive review, with the aim of identifying the areas in which there is room to improve efficiency. It is important that the recommendations further to AIReF’s assessments be taken into account as soon as possible. We also need a comprehensive review of the tax system, in order to improve its revenueraising capacity and its efficiency. Comparison with the other European countries can guide us here. And, once again, the results of AIReF’s recently published review of tax benefits are a significant contribution in this connection. 11  Conclusions In sum, following an unprecedented recession, we face a gradual recovery in the economy, which is still incomplete and uneven, and subject to high uncertainty. Against this background, the ECB’s actions since the onset of this crisis and the recent approval of the European recovery plan are also an unprecedented common European response.