Chronic. Finally ! Two decades after the launch of the single currency, the monetary giant that is the euro area began to use its financial potential: Tuesday, June 15, the European Commission borrowed on the financial markets 20 billion euros, at a rate of 0.086%. This is the first step in the great pan-European recovery plan of 750 billion euros.
For the first time, the Twenty-Seven are using the immense privilege offered by their economic size, with an embryonic common budget. Commission President Ursula von der Leyen talks about a “Truly historic day”. The adjective is not overused for once.
Institutional shift
We must, however, begin this European institutional shift with our eyes wide open, being aware of the limits of this plan: first, it is slow and of relatively limited scope; then, it means a transfer of sovereignty to Brussels, which will have to be assumed politically.
The European Union (EU) is moving forward at its usual pace. The recovery plan was painfully approved following a very long European summit in July 2020. It then had to be finalized in December, then ratified in each of the twenty-seven countries. It has been done since the end of May.
The disbursement will also be slow. About 13% of funds will actually arrive in state coffers this year, followed by 20 to 25% per year until 2024 and the last cents will wait until 2026 to be paid. Nothing to do with the US $ 1.9 trillion (€ 1.6 trillion) stimulus package announced by US President Joe Biden in January, approved by Congress in March and almost all of which will have been paid out. ‘here in the fall. This is double the European plan, paid in eight times less time.
Medium-term reconstruction of economies
However, you should not shy away from your pleasure. The EU is not the United States and the stimulus plan does not have the same function. Emergency measures during the pandemic were provided by each of the twenty-seven member states. The “Whatever the cost” did not need the help of the European Commission.
The pan-European plan aims at the medium-term reconstruction of the economies. Priorities are given to sectors of the future: digitization (development of optical fiber, digitization of administrations, development of the cloud, etc.) and ecological transition (renewable energies, insulation of housing, low-carbon transport, etc.).
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