The European Commission is planning to present an updated multi-annual financial framework proposal on 29 April, as part of the recovery strategy to tackle the economic fallout of the coronavirus, according to an internal document seen by EURACTIV.com.
An updated MFF, the EU’s long-term budget for the period 2021-2027, is seen as a key tool to overcome the severe recession that the pandemic will cause in Europe, according to Commission President Ursula von der Leyen.
The head of the EU executive said early this month that “we all know that in this crisis we need quick answers and we cannot take two or three years to invent new tools” and that “the MFF is the strongest tool we have”.
For the former German minister, the MFF could be the fiscal stimulus needed in lieu of divisive ‘coronabonds’, a joint debt proposal backed by nine member states on sharing the costs of the recovery. A small group including Germany, the Netherlands, Austria and Finland are against them.
According to an internal Commission document, the recovery strategy is scheduled for 29 April, although the date is still to be confirmed. It is set to include a communication with proposals to amend the draft MFF, initially put forward by the EU executive two years ago.
In addition, the institution is also expected to amend its work programme for this year.
An agreement on the MFF will not be easy. The impact of the coronavirus will complicate further the unanimity needed among the member states, after EU leaders failed to agree on the main features in February.
The pressure to adopt the MFF continues to grow. Big spending programmes, such as the Common Agricultural Policy, will expire by the end of this year. The Commission already warned in February that EU leaders were late compared with previous periods. The European Parliament also needs to give its consent.
Moreover, the EU executive has exhausted almost all the resources under the current MFF to fight the coronavirus. For that reason, some member states are urging to adopt a recovery plan as soon as possible, together with other measures that the Eurogroup will discuss later on Tuesday.
Finance ministers are nearing an agreement on an economic package that will include guarantees and soft loans from the European Stability Mechanism, the Commission and the European Investment Bank to protect as much as possible companies and workers.
Those measures can only do so much to combat the “induced coma” the European economy is suffering and a recovery plan will be needed to kick-start activity and repair the damage.
The plan will depend on when and how member states start to exit their respective lockdowns and lift the containment measures implemented to stop the coronavirus.
The college of Commissioners will hold an orientation debate on Wednesday on the ‘European Roadmap towards exiting from the COVID-19 pandemic’.
A Commission spokesperson said that an exit from exceptional measures on restricting citizens’ movement will be gradual and will depend on the national situation in terms of the pandemic.
As part of the exit strategy, the college is expected to adopt a recommendation on apps used by member states for contact tracing. These apps, together with the testing kits, will play a key role in the process of dismantling the containment measures and avoid new cases.
In this regard, the Commissioners will also adopt guidelines for the validation of testing equipment in Europe, and on the optimisation of supply of medicines during the outbreak.
[Edited by Sam Morgan]