The European Parliament and the European Commission begin on Wednesday with a first public political-parliamentary debate on what could become the most far-reaching interim revision ever of the EU multiannual budget.
This debate forms the second stage in what could be an EU turning point, after EU country ministers and heads of government had already taken the first step in February and March by agreeing to a new kind of Marshall aid fund. The European Parliament will now clear the way for the Commission to overhaul all existing EU budgets.
The 27 EU Commissioners and Commission President Ursula von der Leyen provide explanations in Brussels on how they intend to make hundreds of billions of euros available for the megafund to recover from the economic damage caused by the corona pandemic. They will likely present the initial financial consequences in about a week, on May 20. This will be the third stage of the meeting process regarding the incorporation of that corona megafund into the EU budgets.
All European countries have been affected by the pandemic. But there are risks of major differences in economic pain and chances for recovery. Greece (-9.7 percent of GDP), Italy (-9.5 percent), Spain (-9.4 percent), and France (-8.2 percent) are experiencing a stronger decline than, for example, Germany (-6.5 percent).
The figures remain officially secret, but a leaked memo proposes a budget of up to €2 trillion. Once the budgets are definitively drawn up (and the Commissioners have agreed to cuts in their ongoing budgets!), billions of euros can be invested to restart the European economy.
Behind the scenes, disagreement remains over whether countries receiving money from such a corona fund will get it as a grant/donation or as a loan, with or without interest. In the latter case, partial repayment would be required. Others refer to it as ‘perpetual mortgages or leases.’
The chairman of the parliamentary Budget Committee, Belgian Johan Van Overtveldt (ECR), said regarding ‘subsidies versus loans’ that he would like to see the fund’s income and expenditures maintain a balance between solidarity and responsibility.
The presentation of the financing of the first billions (in the 2020 and 2021 budgets) on May 20 coincides with the long-awaited and twice postponed presentation of the comprehensive EU Climate plan Green Deal. In the initial draft versions of that plan, Vice-President Frans Timmermans had already made clear that significant changes must occur in the EU if Europe is to be climate-neutral in fifteen to twenty years. That entails a radical shift in energy and raw materials usage, reduction of environmental and air pollution, and other taxes and subsidies.
This afternoon, the European Commission states in Brussels that the economic damage caused by the corona pandemic in many countries does not form a blockade or impediment to the shift to the Green Deal, but that the Green Deal can actually be the engine and driver to set economic development in EU countries on a new course.
The European Parliament debates on Wednesday with Commission President von der Leyen about this new proposal. On Friday, the Parliament will vote on a resolution that – as it currently appears – will be adopted by an overwhelming majority. Additionally, on Wednesday the EP will vote on a call to the European Commission to come forward with an emergency plan. Should budget negotiations fail or be delayed, guarantees must be provided for EU subsidies after January 1, 2021.