14 Ideas for After Corona

Preface

After Corona we will rebuild our societies. Here we explain how these 14 ideas build towards a democratising central banking, a capable state and resilient society.

General

Neutral policies are not fair policies

The pandemic has highlighted and exacerbated a number of inequities that require urgent addressing, both in the post-COVID recovery packages and, most importantly, in the structural changes that come after Corona.

Democratic Central Banking

Strengthening the Secondary Mandate

Swift interventions by the European Central Bank (ECB) have stemmed market pressures and credit crunches throughout the early period of the current crisis. However, monetary policy is wielded with little regard to the social and ecological crises Europe and the world are facing. The

Democratic Central Banking

Redefining Price Stability

COVID-induced uncertainty in money and capital markets has led to large-scale central bank interventions in these markets. While quantitative and qualitative changes have been made to particular tools, by and large central banks have “followed the 2008 playbook”. However, these tools have contributed to

Democratic Central Banking

Boosting Monetary Policy Capacity

State-backed emergency lending schemes have been among the most important tools for supporting small and medium enterprises during the Corona crisis. Examples include PPP in the US, CBILS in the UK, KfW-guaranteed loans in Germany, or BPI-guaranteed loans in France. However, even though most

Democratic Central Banking

Democratically Embedded Central Banking

During the immediate Corona crisis, the European Central Bank was able to act quickly and decisively to stabilise financial markets, including those for government bonds. Its formal independence from democratic decision-making made its response faster than any other EU institution. However, monetary policy is

Capable State

European Investment Authority

After Corona, large-scale investment will be necessary to transition the European economy towards sustainability and resilience. How can we ensure that this investment takes place effectively, at the required scale, and with sufficient democratic oversight? To these ends, a dedicated entity could be created:

Capable State

Restoring the Tax Base

Through profit shifting, tax evasion, and tax avoidance, corporations and high-net-worth individuals conceal significant parts of their income and wealth. This impairs the tax base and inhibits the capacity of states to levy fair and effective taxes. Though recognised before COVID, this problem has

Capable State

Update National Accounting

National accounting systems are the backbone of economic policy making. They express collective value judgements and guide political decision-making. Existing, GDP-based systems were already seen as questionable prior to COVID. Corona has conclusively shown their inadequacy. Besides their blindness to sustainability concerns, they conceal

Capable State

Sustainability and Prosperity Pact

The EU treaties’ fiscal rules focus narrowly on avoiding excessive deficits. These regulations reflect a widely-held but flawed view of economic sustainability, which ignores the growth side of debt sustainability, the social and environmental preconditions of stable and longer-term economic prosperity, and the feedback

Resilient Society

Reducing Leverage

The Corona-induced market sell-off in March 2020 reinforced an old lesson: high leverage, and in particular high debt-to-equity ratios, makes for brittle balance sheets. This had become clear in 2008, too, but post-crisis deleveraging measures concentrated on banks, leaving corporate leverage to increase over

Resilient Society

Fair and Effective Wealth Taxation

As societies exit from COVID and the associated economic crisis, two wealth-related problems are likely to emerge. First, high debt may divert public spending into debt servicing costs, away from other and more pressing priorities. This is a one-off problem, the solution to which

Resilient Society

Onshoring Essential Industries

During the COVID-19 medical crisis, dependency on imports compounded supply shortages of essential goods like medical equipment, masks, and pharmaceuticals which threatened lives. The web of extended supply chains built up through offshoring and globalization in recent decades proved brittle in the face of

Resilient Society

Universal Basic Services

The Corona crisis has shown the vulnerabilities of market-coordinated, highly differentiated societies: brittle child care arrangements, limited community health capacities, sub-par elderly care, among others. Moreover, it has demonstrated that these vulnerabilities, while to a certain extent shared and universal, fall most heavily on

Resilient Society

Valorising Work, Democratising Corporations

The crisis has shown the enormous importance of human labour — in the care sector, in the provision with food, in testing-and-tracing, etc. — for maintaining our societies. But on a structural level, many of the workers in these sectors, who are disproportionately female and/or

Resilient Society

Resilient Global Finance

Since the collapse of the Bretton Woods system, the world economy has been organized around the US dollar. The adverse domestic and international effects of this monetary system include global financial instability, cycles of global leveraging, destabilizing trade imbalances, and elite capture. As the