All EU member states, including the “frugals”, are now convinced that the resources for a virus recovery fund must be found on the market, Italian Minister of European Affairs Enzo Amendola told EURACTIV Italy in an exclusive interview.
“Nobody doubts anymore the need of a debt issuance. This was a historic battle and a proposal made by many great European personalities, from Jacques Delors onwards. These resources must be managed by the Commission, within the EU budget and the Multiannual Financial Framework,” Amendola said.
France and Germany recently presented a €500 billion European recovery programme, which will be issued as grants, not loans.
Amendola said the Franco-German position makes it clear that the funds must be taken on the market, namely as EU debt, and be used in favour of the sectors and countries most affected by the pandemic, which would be determined by the Commission.
“We are on the path Italy proposed: new instrument and important resources against a recession that hits all EU countries.”
The “Frugal Four” (Austria, Denmark, the Netherlands and Sweden) then presented their own plan, which still focuses on loans, meaning the money should at some point be repaid.
Amendola said he spoke with the European affairs ministers of all those four countries, emphasising that Italy rejects their narrative against the spendthrifts.
“Italy is a founding country, a pillar and a net contributor to the EU. Our aim is to defend the integrity of the European single market. All countries benefit from the single market, including especially the ‘frugals’,” he said.
“The Frugal’s document is too defensive with regards to the aim of defending and reforming the single market,” he added.
Conditionality makes sense
Both proposals, though, come with strings attached. “All EU money comes with ‘conditionality’”, an EU diplomat said last week. “If you are spending everybody’s money, terms must apply.”
Referring to conditionality, Amendola said it’s obvious that the Commission should manage the resources.
“The Commission is taking a role it never had before. Ten years ago, the crisis was managed at the intergovernmental level. Now it is the Commission which shall organise and manage the budget and the Recovery Fund. Some call this negatively as ‘conditionality’.”
He added that the funds should be managed “wisely” to support and innovate the single market.
“Reforms are necessary on competitiveness, state aid, minimum level of taxation, social policies, Green deal and digital. And all countries shall participate. Reforms and resources are the two priorities for the EU,” he emphasised.
Last but not least, the Italian minister also backed the idea of own resources, something that is provided in the Franco-German proposal.
He said a digital tax and a carbon border tax could be put in place to help increase the budget, apart from new contributions by member states.
“This is the way the EU should take,” he said.
[Edited by Sarantis Michalopoulos, Sam Morgan]