EU socialists propose financing ‘Recovery Plan’ with new own resources

Creating debt without planning how to pay it would not be credible, Iratxe García, the leader of the Socialists and Democrats in the European Parliament, stated in a letter sent to EU leaders ahead of the 23 April EU Summit.

For this reason, the Spanish MEP wants a new set of robust own resources for EU budget to finance the Recovery Plan.

In her letter, García, a close ally of Spanish Premier Pedro Sánchez, suggests that the Recovery Fund must be designed within the community framework and be placed within the headroom between the MFF ceilings and the own resources ceilings.

“This innovative financial instrument should be used to issue Recovery Bonds by borrowing money on the markets and issuing common debt (ultra-long or perpetual bonds) guaranteed by the EU budget and paid by future new own resources, making sure this plan is oriented towards future investment,” she said.

According to García, own resources must therefore be revised from the current 1.2% GNI ceiling to a minimum of 2% EU GNI.

“In order to finance a recovery plan, now more than ever it is time that Europe steps forward in the coming weeks to negotiate a basket of new own resources, including revenues from the EU-ETS system and a fee on unrecycled plastics,” she said, adding that all these measures should align with the principles of the European Green Deal.

Sarantis Michalopoulos |


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