The package is not yet ready. The European Commission finds itself having to mediate between the Franco-German proposal and the counter-plan presented by Austria, Holland, Denmark and Sweden, the so-called rigorous and ‘frugal’ states, an ultra-diplomatic term used to describe their ungenerous approach to the EU budget. This block of countries asks for resources to be disbursed in the form of loans and not subsidies, they propose a temporary two-year fund, they say no to any increase in national contributions to the European budget, they lash out against any hypothesis of debt mutualisation.
But in the end, according to Huffpost, the executive of Palazzo Berlaymont should respect the approach of Berlin and Paris. The fund, included in the European budget and financed with bonds issued by the Commission, should be based on three pillars: resilience, that is, post-emergency reconstruction in the member countries, the measures that have the greatest impact on the crisis to which 250 billion euros would go; the ‘Green deal’, the green investments identified as a priority by the von der Leyen Commission since the beginning of its mandate with the ‘Just transition fund’; the digital covenant.
The new fund in Brussels call it the ‘facility’. In fact, the plan draws a new economic instrument, born under the sign of Covid, designed specifically to open a new phase in Europe, dictated by the crisis rather than by the will of the individual States, a shock that is overwhelming the initial resistance of some (Germany ) and which borders other countries (the 4 penalty takers and others in the east) to a weaker resistance than in the past. Just look at the term of the loans: the Commission’s plan should be seven years. They are a life: 2027, when the next European multiannual budget that should host the new fund expires (2021-2027, in fact). Who knows how the Stability and Growth Pact will be put in place by then: suspended due to the emergency, it risks being extremely tight for many European states that will overstep the parameters on deficit and debt.
The Commission’s plan should also include a ‘repair plan’ which aims to bring the 14 industrial sectors which are considered 50% of the added value of the European economy, from tourism to small and medium-sized enterprises, back to pre-crisis levels. Aid would be without conditionality.
A reinforcement of ‘InvestEu’, the new European funding program for growth and jobs, which in the Commission’s new formulation should also include strategic investments in European industrial policy to counter hostile take-outs by extra actors, is also expected. Europeans, such as China, for example. It should also strengthen ‘RescEu’, the new ‘additional European reserve’ created to deal with natural disasters, and the structural funds linked to the crisis. Finally, the Commission’s proposal should also provide for an ‘environmental recovery plan’.
With France and Germany, there are all the states most in difficulty with the budget: Spain, Portugal, Greece, Ireland and others are pushing for the Commission’s proposal to follow that presented by Merkel and Macron. Namely: that at least 500 billion are subsidies. Italian Prime Minister Giuseppe Conte asks for more, but it is unlikely that the rigorist countries will accept an even more generous approach to non-refundable grants.
At the moment, Austria, Holland, Denmark and Sweden raise the stakes: they say they are indisposed to accept the minimum proposed by Paris and Berlin, even if they seem weak. In both Vienna and Stockholm, the majority of government is not compact. In both cases, the Greens are in favor of the recovery fund and are holding back the center-right allies in Austria and the center-left in Sweden.
Because in this story, many parties have internal contradictions. The EPP has them. Today the Austrian vice-president of the European Parliament, the Popular Othmar Karas, frontally attacks his party colleague Sebastian Kurz. The ‘frugal’ proposal, Karas writes in a series of tweets, “is very far from that of the House of Elected by Citizens, the European Parliament. It is not adequate for the challenges of the future. It won’t work without a healthy mix of grants and loans! ” And again: in the Nordic counter-proposal “many issues remain open and the specter of debt sharing is still evoked for no reason. The economy is collapsing as a result of the crisis and so is the European budget. So we need new resources to face reconstruction and future challenges. ”
But socialists also have their internal contradictions. Two of the four ‘frugal’ and uncompromising countries are socialist-led: Sweden and Denmark. Today the Minister for European Affairs, Dem Enzo Amendola, had a telephone exchange with counterparts from Austria, Holland, Sweden and Denmark. “I explained the concerns of the Italian government about their proposal for the Recovery Fund – he says – For us it is based on a too defensive approach, given the recessive risks that affect European value chains and production sectors. We are asking for more ambition and innovative choices, especially to those countries which, in recent years, have received greater advantages and benefits from the European single market “.
The President of the European Parliament David Sassoli addresses the “frugal” with a “call for responsibility. There are no frugal and other spendthrift countries but countries aware of the challenges and unaware countries. This is why I ask everyone to live up to this historic moment. ”
“The most urgent issue is the creation of European resources, so that the EU can issue debt without asking for greater contributions from the Member States, but by establishing financial resources at European level, with particular attention to the financial and web giants and to the polluter,” he says Sandro Gozi, MEP of Renew Europe and president of the Union of European Federalists, announcing an open letter sent by the Uef to MEPs asking the European Parliament to propose the necessary amendments to the Treaties and to start the relative modification process. “This is the only way to ensure that any debt issued by the European Union can be guaranteed by the EU budget and should not rely on direct or indirect guarantees from the member states.”
Not surprisingly, von der Leyen should open the chapter ‘new resources’ the day after tomorrow, a chapter not included in the Franco-German proposal. Indeed, the President will speak in front of the European Parliament, meeting at a distance plenary. In mid-May, a very large majority of the Eurocamera (PPE, socialists, liberals, Greens, Conservatives and reformists, the 14 elected members of the M5s) voted for a very ambitious proposal on a recovery fund of € 2 trillion, based more on subsidies than on loans and on a share of own resources of the European budget, coming from new taxes on digital services, plastic or fossils.
In short, von der Leyen could present a mix between the Franco-German proposal and those of the European Parliament. In any case, it will always be the States that decide, starting from the June European Council (or if there will be other meetings before, not yet convened). And in that place the ‘frugal’ will be able to assert their claims.