Montchalin: €500 billion in budgetary allocations to ‘be maintained at all costs’

"As far as France and Germany are concerned, the €500 billion in budgetary allocations mentioned in the initiative of the president and the chancellor must be maintained at all costs," said France's European Affairs Minister, Amélie de Montchalin.

Ahead of tomorrow’s EU summit (19 June), France’s European Affairs Minister Amélie de Montchalin told EURACTIV’s partner Ouest-France in an interview that the EU27, including the “frugal four”, are moving towards accepting an EU recovery programme, but that it would not work without reforms and long-term investment.

A former right-wing activist won over by Emmanuel Macron’s LREM and elected into parliament in 2017, Amélie de Montchalin was appointed secretary of state for European affairs in May 2019, replacing Nathalie Loiseau. She spoke to EURACTIV’s partner Ouest-France.

You have just visited Austria and the Netherlands. When it comes to the EU recovery plan, do you see any change among the more stubborn member states?

We are giving a rather false picture of what these countries are trying to do and how we are working with them. These days, no one is disputing the need for a European action plan in the face of the most serious economic and social crisis since the Second World War.

We have already come a long way in a few weeks. Europe’s economy will not recover unless all our economies get back on track. The Netherlands, for example, has a trade surplus of €12 billion a year with Italy, which is massive for its economy. If Italy does not start up again, the Netherlands will not start up again. Everyone realises that now.

Taming the 'Frugal Four': the challenge facing the German Presidency

The European Commission has presented its proposal for a recovery fund as part of the draft EU budget. Now the member states must be convinced, a task that will fall on Berlin when Germany takes over the EU Council Presidency in July, EURACTIV Germany reports.

Is that so?

The economic crisis is happening everywhere. Everyone’s GDP is falling by 7%, 8%, 9% or even 10%. All over Europe, companies and trade unions are calling for this plan. And there is no single national alternative. The debate we are having with these countries is based first and foremost on national specificities.

We have to start with the specific needs of each country. We do not create an agreement as a block, nobody speaks for the other. We have to go into detail. Secondly, there will be no agreement if each country is not in a position to get its own people on board. I do not believe in twisting the arm of one party or the other. One has to convince.

Is there any movement on transfer and subsidies, which they still officially refuse?

Yes. These days, no one disputes the idea that we should go into debt together. Look at how far we’ve come in the last few months!

But four countries [Austria, Sweden, the Netherlands, Denmark] are talking about loans. Are they open to the idea of transfer?

Yes. Afterwards, we have to see how much and how this money is used. It is not a question of financing the current account deficits of states, but of investment.

The Swedish prime minister keeps talking about loans…

Yeah, but the lines are moving and we’re working on it.

Take Giuseppe Conte [Italian Prime Minister] for instance. He had made very strong statements making it clear that this money is not just a financial boost but an investment. He said that this investment should be accompanied by far-reaching reforms.

The European recovery plan will not work miracles without reform and long-term investment. That is why the European budget for 2021-2027 must be ambitious and go beyond urgency.

Merkel and Macron roll out €500 billion COVID-19 recovery initiative

German Chancellor Angela Merkel and French President Emmanuel Macron announced their joint proposal for a €500 billion European recovery programme following a virtual conference on Monday (18 May). The initiative seeks to bring Europe out of the crisis “united and in solidarity,” and prepare the EU for future challenges. EURACTIV Germany reports.

The Swedes are asking for a short-term arrangement to apply until 2022?

There are three things we are all doing.

First of all, job protection in the context of the crisis is covered by short-time work and activity support loans. Second, the issue is how we will get the economy back on track in the coming months. This is the subject of the plans announced for aeronautics, tourism, etc.

And there is a third step to make our economy stronger, greener, more resilient and more supportive of the success of our ecological and digital transition, to ensure sustainable and innovative jobs in the face of the US and China. That is the ambition of the European budget.

Johnson and von der Leyen kick the Brexit can into autumn

Trade talks between the European Union and the UK will be stepped up in July with a view to brokering a deal in the autumn, Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed on Monday (15 June)

When it comes to relations after Brexit, is there still room for an agreement with the Brits?

We had a very important meeting as the EU27 with Michel Barnier on Tuesday.

We are very calm because we have given him a very clear mandate since we know where we want to go. We do not want either of us to win or lose, but to keep a strong partner and a balanced relationship. We will not give in to the excitement.

The UK needs this agreement more than we do. If there is no agreement, there will be an additional shock to that of the COVID-19 crisis. We are all the calmer because the Brits are putting pressure on the timetable as it is in line with their political agenda. Basically, we know where we are going. On all issues, the ‘twenty-seven’ are showing total unity. Total unity.

Including on fisheries?

Especially on fisheries. It’s a highly political subject. In order to reach an agreement, everyone must remain calm and realistic.

On fishing, we’re very vigilant. No one among the ‘twenty-seven’ is questioning the principle that we need an agreement on everything – on trade issues, fair competition conditions and fisheries – to reach an agreement.

So the group of eight countries directly concerned by British waters is supported by the others?

Nobody wants to weaken that mandate.

Germany, which will take over the EU Council Presidency on 1 July, also has a very clear position. Everyone sees the importance of linking all the issues together.

That is the way to clearly protect our businesses, our fishermen, our farmers, but also our investors. I would remind you that 70% of the fish caught in British waters are exported to the European Union. They have no interest in closing their waters to French and European fishermen.

No breakthrough in Brexit stalemate, admits Barnier

The stalemate on EU-UK trade talks remains unbroken both sides conceded on Friday (5 June), with the EU again accusing London of attempting to back-track on its commitments made in the Withdrawal Agreement that took the UK out of the bloc in January.

Nonetheless, no agreement would be brutal…

If the British can no longer export their fish to the EU on favourable conditions, they will suffer greatly. Everyone around the table knows very well that the stakes are shared. Negotiations are very different from the ones that prevailed until last February. Until then, we were in a political discussion with a very strong symbolic dimension: the UK’s exit from the European Union.

This is about the real economy, about the goods we trade. That is where the discussion should be placed.

As a precaution, you are probably preparing for the hypothesis of a non-agreement. What is France preparing?

Three weeks ago, parliament gave the government permission to proceed by executive order if there is no agreement with the Brits on a number of issues, such as the Channel Tunnel, the protection of investors, the defence sector… We are also preparing all the necessary infrastructures. There will be border controls on goods and people.

With what plans?

At the European level, there are support schemes for sectors in difficulty. As we can see with the health crisis, we have the capacity at European level to release funds in emergency situations or to use existing funds, such as the EFFP [European maritime and fisheries fund] for fisheries for example.

If fishermen can no longer go to British waters on 1 January, do you mean there will be a safety net?

Yes, but my first scenario is an agreement.

The Brits would like an annual renegotiation. Is that acceptable to you?

No. We need predictability. We can’t leave an economic sector in a situation where every six months business is at risk. It would weigh on investment and the whole sector. The withdrawal agreement has already solved a lot of problems. We must reassure the French about real deadlines and avoid anxiety-provoking debates.

Nothing is going to change until 31 December, and given the time it takes to ratify an agreement, it is difficult to sign anything after the end of October.

Brexit panic reaches across the Channel to France

The French have finally realised that there may well be a no-deal Brexit. The Medef employers’ federation has said that French businesses are not prepared, the agricultural sector is waiting, while transporters are panicking. EURACTIV France reports.

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