Macron, Merkel, von der Leyen: three innovators
From a qualitative point of view, yesterday’s is the confirmation of the crossing of a boundary line which is mainly due to three innovators. The first two are Emmanuel Macron and Angela Merkel, who with their “Franco-German initiative for the European reconstruction of the coronavirus crisis” have indicated four intervention chains: the development of a strategic health sovereignty of the EU; the launch of a European recovery fund for solidarity and growth; the acceleration of the green and digital transition of the EU; the strengthening of the resilience and economic and industrial sovereignty of the EU and the new impulse for the single market. I have already talked about this initiative. The third innovator, but in many ways the first, it is Ursula von der Leyen, who with her five-year mandate program outlined the green deal, the need to achieve digital sovereignty, the progressive deepening of the internal market. It has also prefigured those forms of taxation to non-European subjects (web giants and dumping actors) that now become crucial for the issues of Recovery Bonds. Then, faced with the Covid-19 pandemic, he acted promptly by varying the Sure (Support to mitigate Unemployment Risks in an Emergency) for 100 billion. Finally, the role of two European Commissioners should not be underestimated, namely the French Breton (internal market) and the Italian Gentiloni (economy) who in April presented a common request for the issue of European bonds.
Innovative solidarity in sharing
The agreement between Marcon and Merkel has shown full awareness that the 21st century, which started with two crises – the financial one first, the Covid pandemic then – required the urgency for the European Union to find or re-found a new innovative solidarity. This impulse was rooted in the mandate program that the President of the European Commission von der Leyen had presented in taking on his role, thus demonstrating the difference that for me exists between “innovation in sharing” and “improvisation in division”. Because while the first characteristic connotation of European DNA, sometimes with long periods of slowdown, the second is a wrong expectation of those who swap Europe for an arena of clashes in which you have to “beat your fists on the table” to get results. Europe is a democracy of “et et” and not of “aut aut”. For this reason, I would not overestimate the obstinate ambition of the four “frugal or rigorous” countries in the face of a program such as that which the President of the Commission has addressed to the other four EU institutions: Parliament, Council and two Committees. At the same time, I would suggest that Italy lower its tones, avoiding terminologies such as “then they will check us” or “we will pour more than we will take”. Also because it is not uncommon for Italy not to spend what it receives or spends badly.
Reconstruction and Recovery bond
Let us now turn to the main aspects of the Program which innovates above all with the new European fund of 750 billion. The “recovery fund” is a truly important method and merit innovation. First of all, the entity of the 750 billion “Fund” is entirely financed by the issue of bonds guaranteed by the European budget. These bonds will certainly have the highest rating and can be purchased (like those of the EIB) by the European Central Bank. This completes a typical circle of a federal system where between the “central bank” and the “Government” there are complementarities in the decision-making independence between economic and monetary policy. The proceeds from euro-bonds will go to individual states in two ways. For 500 billion in the form of contributions for production expenses (which I keep saying they must be denominated with an invested fund and not with a non-refundable fund !!). For 250 billion as loans to be repaid with various maturities between 2028 and 2058. Secondly, for the payment of interest on the 500 billion of subsidies of the Recovery fund, own resources will be found starting from the reform of the ETS system (Emission Trading Scheme ), the Carbon Border Mechanism and taxation on industrial conglomerates (including digital ones). Thus an innovative European taxation is initiated which strengthens a further branch of a federal or confederal economic policy which must have a certain share of Community taxation (in this case qualitatively innovative).
Three further aspects of the innovation to be recalled.
The first is that the distribution of contributions and loans does not go on the basis of the shares of individual states in the EU GDP, but on the basis of the damage effects of the pandemic. In fact, the main chapters of the program are centered on the reconstruction of the post-pandemic from both an economic and a social point of view. The second is that by using even small multipliers, for example three times, it is possible to mobilize 2,250 billion, while if multipliers such as those estimated by the Juncker Plan were used it would reach levels that the EU would hardly be able to govern effectively if not on a ten-year horizon. The third, which must also be qualified in relation to the multiplicative effect, is that coherence must be sought both on the longer-term supply chains in relation to the “green” and “digital” transitions and on the continuation of the lines of intervention of the seven-year European budgets ( which now represent a consolidated innervation of European structural economic policy action) does not seem to us to be any harm because continuity is important.
One conclusion: civil solidarity
It is said that Europe is always too slow. Maybe, but if we compare the pandemic between European civil solidarity and that of other large countries, democratic and otherwise, I believe that we can all admire our Eurodemocracy which, struck by Covid-19, has not abandoned its citizens to their individual destiny, but he considered them part of two communities: that of their country and that of Europe.