A recovery plan to draw another Europe

By Virginie Malingre

Posted today at 3:57 am

History may remember that the Covid-19 pandemic has enabled a breathless Europe to reinvent itself. Weakened by a succession of crises – in ten years, it had to face those of the euro zone, migrants or even Brexit -, it could emerge from the worst recession it has had to experience in a century by being more federalist , more integrated and more united.

The British are no longer there to oppose it. Angela Merkel’s Germany has never been more ready and has teamed up with Paris to defend the need for it. Of course, resistance remains numerous in the north of the Old Continent, but it did not discourage the Commission from concocting a recovery plan at 750 billion euros, which lays the groundwork for a new European construction. “It’s time for Europe”, insists its president, Ursula von der Leyen.

European leaders will begin a debate on Friday June 19, before another summit in July. The meeting will not be enough to put an end to the discussion, but it will make it possible to assess the balance of power involved. Especially since it will also concern the European Union (EU) budget of some 1,100 billion euros for the period 2021-2027, which the recovery plan must abound.

We must therefore expect a gigantic bargain between Europeans. The “frugal” – Austria, Netherlands, Denmark, Sweden -, attached to budgetary orthodoxy and opposed to a more integrated Europe, will not give up without heavy consideration. The countries of the South, most affected by the current crisis – with Italy at the head – will brandish the threat of an explosion in Europe. Their eastern partners will be careful not to be sacrificed in this matter. And France and Germany will try to play the referee, without bragging about their opinions.

In reality, the virus has already transformed Europe, and freed up hundreds of billions of euros which are intended to revive a comatose economy. Thus, the Commission, which suspended the stability pact and adjusted the state aid system, encourages the member states to spend without counting. What is more, the 27 have already agreed on a first package of emergency measures, amounting to 540 billion euros. Which complements the unprecedented effort of the European Central Bank, which has pledged to inject 1.7 trillion euros into the European economy.

Article reserved for our subscribers Read also The European recovery plan of 750 billion euros is far from unanimous

But it soon became clear that these arrangements would not be enough in the face of the scale of the crisis. And that they also failed to respond to the growing divergence between the 27, and with them the risk of the disruption of the single market and the explosion of the eurozone. Because the countries most affected by the virus – Italy, Spain but also France – are also those who have the least budgetary room for maneuver.

You have 76.74% of this article to read. The suite is reserved for subscribers.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *