The EU’s next long-term budget should be a key instrument in the recovery plan to confront the huge economic consequences of the COVID-19 crisis, European Commission President Ursula von der Leyen said on Thursday (2 April).
“Some people are talking about a Marshall Plan. The European budget should be the Marshall Plan we lay out together,” von der Leyen said during the presentation of a package aimed at supporting the most affected countries.
A number of member states, including dramatically affected Spain as well as the European Council president Charles Michel, have been calling for an EU Marshall Plan to support the bloc’s economy after the coronavirus storm.
“We all know that in this crisis we need quick answers and we cannot take two or three years to invent new tools,” she said, “the MFF (Multiannual Financial Framework, the EU’s long-term budget) is the strongest tool we have,” von der Leyen said.
“We want to shape the MFF in such a way that is a crucial part of our recovery plan,” the president added.
Von der Leyen announced recently that the Commission will come up with a new draft proposal for the seven-year budget to confront the economic crisis that will follow after the lockdown measures imposed across Europe to limit the spread of the COVID19.
While she explained that the priorities – digitalisation, decarbonisation and resilience – will not change, von der Leyen said the new blueprint will need to be “a very strong investment signal” and mirror the EU’s interests.
EU leaders were working on an agreement over the next EU long-term budget when the global epidemic erupted, as the existing MFF finishes by the end of 2020. Back then, member states were divided between those wanting to see a leaner budget after Brexit and those who asked for a more ambitious instrument.
Loans for jobs
Von der Leyen presented a set of measures aimed at supporting countries in their economic response to the consequences of the COVID19 pandemic, including SURE (Short Time Employment Scheme), an aid scheme for farmers, and the redirection of all non-allocated cohesion funds to tackle the crisis.
“Besides liquidity and other support, we are introducing a new proposal to preserve the vibrant heart of the European economy and that’s skilled workers,” von der Leyen said in reference to SURE.
The goal is to set up a €100 billion worth instrument in loans for countries to guarantee that workers receive an income and that businesses keep their staff, in spite of economic slowdown.
“The Commission will provide loans to those member states that need them to strengthen their short-time work schemes,” von der Leyen said.
“This will be possible thanks to member states guarantees of 25 billion… This is European solidarity in action,” she added.
Von der Leyen said she had presented her plan to EU leaders during last week’s European Council and has been in contact with them ever since. Those with whom she discussed the scheme “were interested, open and positive.”
Furthermore, the Commission announced that access will be made for flexible to the European Maritime and Fisheries Fund, as well as to the Common Agricultural Policy cash, and the uncommitted money from all cohesion funds.
The EU executive will unlock all available remaining funds from this year’s EU budget to support the European health systems, including through the stockpiling of equipment and scaling up testing.
This package follows up on the Commission’s effort to protect the functioning of the single market as member state shut down the borders, and ensuring flexibility within the EU’s fiscal pack and state aid rules for countries to invest in fighting the pandemic.
The economic plan set out by the Commission will be discussed by EU finance ministers next Tuesday (7 April). The Eurogroup was tasked by the Council with coming up with a recovery plan to get the EU’s economy back on track after the coronavirus crisis is over.
[Edited by Zoran Radosavljevic]