Friday 14 May 2021
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Merkel: Germany will have to contribute more to the EU multi-year budget

European leaders have pledged to raise billions of euros for medicines and the global fight against coronavirus. The EU leaders want to raise $ 7.5 billion in an online pledge conference on Monday, May 4.

European top politicians said they support the World Health Organization's call for joint action and announced the launch of a global collaborative platform for research and life-saving therapeutic and diagnostic treatments.

German Chancellor Angela Merkel also takes into account that the German contribution to the European Union must increase due to the corona crisis. With that plea, Merkel is paving the way for a new kind of European debt settlement to be able to pay a mega fund for economic corona recovery. The 27 EU Commissioners will shortly present their proposal for revision of the EU multi-year budget 2021-2027, possibly coinciding with a new EU summit.

Merkel said of such a drastic adjustment in European budgets, "Germany should take on far more obligations than what has been said in the plans so far." Until now, Germany has been counted among the 'economical countries', together with the Netherlands and Austria, among others, who believed that more should be cut.

Germany thus gives the 27 EU Commissioners political leeway for the introduction of a European tax, or for the issue of euro loans. Until now, this has been a major taboo among many EU member states. According to Merkel, this increase in the EU budgets is necessary in order to continue to invest in the aftermath of the corona crisis, so that Europe is not entirely dependent on countries outside the European Union. 

On 1 July, Germany will take over the rotating presidency of the European Union for six months. In addition to health issues (corona fund) and Climate (Green Deal), other issues will also be on the agenda, Merkel says. As examples she mentions levies on financial transactions (European internet tax), minimum tax rates or joint emission trading for shipping and aviation (air tax and CO2 levies). 

This relaxation of the German position is in line with a French strategy note ('non-paper') that was leaked late last year, in which it was suggested that Germany will make radical proposals for 'shaking up the entire EU' in autumn 2020, and that this will be done throughout the year. 2021 will be discussed widely, and will be completed in early 2022 under the French Presidency.

According to EU diplomats in Brussels, the Netherlands has indicated that it wants to cooperate (read: co-pay) with the mega Marshall plan for economic recovery after the corona pandemic, and with it also with a revision (read: increase) of the EU multi-year budget 2021 -2027. However, the Netherlands believes that it should first be determined what is or is not covered by the claims settlement.

President Christine Lagarde of the European Central Bank (ECB) has warned European politicians that the gross national product in the eurozone may drop by around 15 percent due to the corona pandemic. Lagarde estimates that in a base scenario there will be a 9 percent decline in prosperity. 

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