The presentation of a long-awaited economic recovery plan for Europe, as part of a revised multiannual budget, has been postponed until the end of the month. The 27 European Commissioners and EU countries have not yet agreed on the plans, revenues, and expenditures.
EU officials are struggling to reconcile the conflicting visions of EU member states, as became apparent in the European Parliament. There, Commission President Ursula von der Leyen discussed the necessity of a corona recovery fund and how it should be financed.
EU leaders have saddled the European Commission with the unenviable task of drafting a plan that bridges the opposing goals of frugal northern Europe and the desperate corona-related expenditures of the southern countries. European Commission President Ursula von der Leyen told EP members on Wednesday that she is working on an "ambitious" plan, despite the suspicion that EU countries will not provide her with the means to carry it out.
Promotion
Von der Leyen did not name a specific amount but said the plan would be linked to the EU's regular budget and partially financed through the Commission's borrowing on financial markets. This part of the plan will address the strong objections from the Netherlands and other self-declared "frugal" countries that do not want Brussels to gain additional borrowing powers.
The Parliament urged in a non-binding resolution that the new "recovery and transformation fund" reach a size of 2 trillion euros. The fund should be financed "through the issuance of long-term recovery bonds" and disbursed "through loans and grants, direct payments for investments, and equity." MEPs believe EU countries should increase their contributions and that the EU itself should start levying taxes. For some EU countries, this is (still?) off the table.
Meanwhile, the European Commission has adjusted the rules accompanying state aid schemes. EU Commissioner Frans Timmermans had previously expressed support for environmentally friendly, sustainable conditions tied to support from the corona fund. At the European level, no stringent green conditions will ultimately be imposed, despite pressure from the European Parliament and environmental groups in Brussels. However, companies may not pay out dividends, buy back shares, or award bonuses as long as they receive EU corona aid.