Von der Leyen to announce new post-virus economic ‘stimulus package’

"To ensure recovery the Commission will propose changes in the MFF proposal that will allow to address the fallout of the coronavirus crisis," von der Leyen said. [European Union, 2020 Source: EC - Audiovisual Service]

The European Commission will propose a new stimulus package, including changes to the EU budget, in order to help the bloc recover from the economic damage caused by the coronavirus pandemic, Commission chief Ursula von der Leyen said Saturday (28 March).

“To ensure recovery the Commission will propose changes in the MFF proposal that will allow to address the fallout of the coronavirus crisis,” von der Leyen said in a statement.

The MFF is the multi-annual financial framework (MFF), the European Union’s long-term budget.

“This will include a stimulus package that will ensure that cohesion within the Union is maintained through solidarity and responsibility,” she added.

“At this juncture, the President is not excluding any options within the limits of the treaty.”

Last month, EU leaders failed to reach agreement on an extension to the upcoming seven-year budget plan, for the years, 2021 to 2027. They could not agree either on how much each sector should receive.

Summit fails to narrow differences over EU's seven-year budget

EU leaders broke off in the early hours of Friday (21 February) after failing to make significant progress on the bloc’s expenditure for the next seven years. They will reconvene at 10 am this morning to try and make a breakthrough.

Although talks have continued since then, the novel coronavirus pandemic has spread further across Europe, which now accounts for two thirds of the global death toll: 21,334 out of the latest world total of 30,003.

That has changed the outlook of many political leaders, with the whole EU bloc facing the prospect of slipping into recession by the end of the year.

But the 27 EU leaders could not agree on the best economic response to the economic damage wrought by the pandemic during a video-conference Thursday.

They asked the Eurogroup bloc of nations to come up with proposals next month.

“The Commission will participate in these discussions and stands ready to assist, if supported by the Eurogroup,” von der Leyen said.

“In parallel the Commission is working on proposals for the recovery phase within the existing treaties.”

Leaders clash over stimulus against pandemic, pass hot potato to Eurogroup

EU leaders on Thursday (26 March) continued to disagree over the economic response to the coronavirus as Northern countries rejected the idea of issuing joint debt, known as “corona bonds”, proposed by nine member states to finance the recovery.

Italy, Spain and France – the hardest hit countries so far, with cases spreading fast – are pushing for Europe to find a way to better share the financial burden.

But the Netherlands and Germany are sceptical, fearing their big-spending southern neighbours will exploit the crisis to push for a pooling of eurozone government debts.

Last week, a group of leading lawmakers in the European Parliament urged the Commission to update its proposal for the EU’s 2021-27 budget and factor in the response that will be needed to tackle the consequences of the coronavirus pandemic.

“The situation today has very little in common with almost 2 years ago, when the MFF 2021-2027 proposal was put forward,” said the chair and the coordinators of the political groups in the European Parliament’s Committee on Budgets.

MEPs demand a new long-term budget in response to coronavirus 

Leading MEPs are urging the European Commission to update its proposal for the EU’s 2021-27 budget and factor in the response that will be needed to tackle the consequences of the coronavirus pandemic.

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