Within the European Union, battle plan around the recovery plan

Faced with the crisis linked to Covid-19, the European Commission is ready to go into massive debt, on behalf of all the citizens of the Old Continent. “While the Member States, with the help of the Commission, are doing their best to contain the economic damage (…), it is clear that we will need new money ”, recalled the Commissioner responsible for the budget, Johannes Hahn.

This new money is that of the European recovery plan of 750 billion euros, the adoption of which, in July 2020, was ratified after bitter discussions between leaders gathered for more than four days – and a few sleepless nights – in Brussels. Almost a third of the sums raised will be issued in the form of “green bonds” supposed to guarantee the sustainability of the investments made.

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Nine months later, we get to the heart of the matter. The Brussels executive presented, Wednesday April 14, its strategy to raise this sum – reassessed at 806 billion in current prices – by 2026 through the issuance of bonds and short-term debt instruments. A large part of the liquidity of the stimulus plan (407.5 billion in current prices) will be distributed among the States in the form of subsidies, the amount of which will vary according to the severity of the economic crisis they are going through.

In addition, 386 billion will be distributed in the form of loans to States which request them. “This crisis requires swift action on all fronts, urged Mr. Hahn. I therefore call on the member states which have not yet done so to speed up the ratification process. ” To this will be added 12.5 billion for specific European Union programs.

“Stimulate employment, growth”

For the first payments to finally take place, all national parliaments must have approved the text on “Own resources”, which therefore serves as a guarantee for the States as regards the repayment of this debt, if by any chance the Commission does not manage to develop its own resources by means of mechanisms that have yet to be created. If ratification was missing, the recovery plan could not see the light of day.

Of the 27 countries of the Union, the national parliaments of ten of them (Austria, Germany, Estonia, Finland, Hungary, Ireland, Lithuania, the Netherlands, Poland and Romania) have not yet given their approval to the text. In Poland, the ultra-conservative majority is divided over the stimulus package. In Germany, the constitutional court suspended the ratification process, but European sources have ” certainty ” that everything will be back to normal by June.

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