Tag Archives: recovery

Michel postpones #EUCO Summit

On 1 and 2 October, the EU leaders will meet in Brussels to discuss the Single market, industrial policy and digital transformation, as well as external relations, in particular relations with Turkey and with China. The Summit, initially planned for 24 and 25 September, has been postponed as President Michel is in quarantine.

In July, the European Council agreed an unprecedented recovery package to counter the effects of COVID-19 on the economies and societies of the EU member states. The two pillars of such a recovery, the green transition and the digital transformation, coupled with a strong single market, will foster new forms of growth and strengthen the EU’s resilience.

“This agreement was a major step to our vital objective: European strategic autonomy. (…) The strategic independence of Europe is our new common project for this century. It’s in all our common interest” said Charles Michel, President of the European Council.
The European Council will look at ways of deepening and strengthening the single market, developing a more ambitious industrial policy, and pressing ahead with the digital transformation. EU leaders will focus on:
going back to a fully functioning single market as soon as possible; making the EU’s industries more competitive globally and increasing their autonomy; accelerating the digital transition.

The European Council will hold a strategic discussion on Turkey. During the EU leaders’ video conference of 19 August 2020, the situation in the Eastern Mediterranean and the relations with Turkey were raised by some member states. The leaders expressed their concern about the growing tensions and stressed the urgent need to de-escalate. The members of the European Council expressed their full solidarity with Greece and Cyprus and recalled and reaffirmed previous conclusions on the illegal drilling activities.

“We agreed to come back to these issues during our meeting in September. All options will be on the table”, president Michel said.
Following the EU-China summit on 22 June 2020 and the meeting with President Xi on 14 September 2020, both by video conference, the European Council will discuss EU-China relations.
In the light of events, the European Council may address other specific foreign policy issues.

EU leaders reached recovery&budget deal

«We have reached a deal on the recovery package and the European budget. These were, of course, difficult negotiations in very difficult times for all Europeans. A marathon which ended in success for all 27 member states, but especially for the people. This is a good deal. This is a strong deal. And most importantly, this is the right deal for Europe, right now» said Charles Michel, the president of the European Counil.

«And the decision that is made is not a virtual decision. It is a concrete decision that will have and must have a positive impact to ensure that we can look to the future with the determination to be up to this challenge » Michel concluded.

According to Dutch Prime Minister Rutte, who was seen by many as “Mister No” of the meeting, imposing reforms in exchange of grants, the Netherlands ultimately does not have to pay extra for the entire package that European leaders have agreed on.
The Dutch taxpayers will contribute €1.9 billion in membership fees, which €500 million less than during the previous financial period.

The Netherlands is also allowed to retain more customs income. That amounts to about two billion euros. Due to its favorable location, many goods are shipped via the port of Rotterdam and Dutch customs collect money there, because it is the external border of the European Union. Initially, the European Commission wanted to keep all this money itself, but now the Netherlands is allowed to let a large part of it flow into its own treasury.

The East European countires from Visegrad Four group, namely Poland and Hungary, declared their victory, refusing the claims of Dutch Prime minister to conntect grants reception to reforms obligations. “…We have also protected our national pride. We have successfully refused all attempts that would have tied access to EU funds to “rule of law criteria” wrote press-person of Hungarian goverenment on his Twitter blog.

Following the tradition of the Council meetings all the leaders declared “victory” – French President Macron delcared the day of the deal “historical“.

A massive recovery plan is adopted: a common loan to respond to the crisis in a united manner and invest in our future. We never did! France has relentlessly carried this ambition” Macron wrote on his Twitter blog.

German Chancellor Angela Merkel said the European Union leaders had come to a “good conclusion” after a €1.8 trillion budget for next sever years and coronavirus recovery fund were finally agreed on after days of talks.

However not everyone was impressed by the results of the four days marathon talks. “A hardworking garbage collector is being cheated by Prime Minister Rutte. The Italians and Spaniards do get their money. Hundreds of billions in loans and gifts.
Paid by the garbage collector and the rest of the Netherlands. Vote #Rutte away!
” wrote Dutch Member of the Parliament Geert Wilders.

Italian Prime Minister Giuseppe Conte is “very satisfied”, because he gets €82 billion in “gifts – from our money – while Italians are three times richer than the Dutch“, Wilders continues, explaining they “hardly pay tax there”, and Dutch people are going to pay for them, because of Mark Rutte “weak knees“.

Next to political opponents the criticism of the deal came from the youth, who blamed the leaders the absence of ambition in support of Digital Europe, Horizon, Just Transition Fund (JTF) for vulnérable European. territories, suffering from climate change, European Neighbourhood policy (ENP ) and those who thought that with the Brexit the “era of rebates is finally over”.

EUCO: Michel scales down grants

In a search of compromise the president of the European Council Charles Michel came forward with the proposal to scales down the grants (subsidies) in recovery & resilience facility (RRF) fund €672.5bn, of which loans €360bn & grants €312.5bn, 70% of grants provided in 2021-2022, 30% in 2023. The proposal constitutes a significant change in comparasion to the original plan of €750bn, consisting from €500bn in grants and €250bn in loans, announced at the beginning of the Summit on July 17.

Since our last summit in June, we have worked intensively with all of you and taken due note of your concerns. On that basis I have put forward a proposal to address the key difficulties and to build bridges between the different positions. Finding agreement will require hard work and political will on the part of all. Now is the time. A deal is essential. We will need to find workable solutions and come to an agreement, for the greater benefit of our citizens” Charles Michel wrote in this invitation letter to the leaders ahead.

Sassoli: MEPs call for end to rebates

Statement by European Parliament President on the ongoing European Council meeting:
After days of discussions, European citizens expect an agreement that lives up to this historical moment. We are worried about a future where European solidarity and the Community method are lost. The European Parliament has set out its priorities and it expects them to be met.

The multiannual financial framework must be able to address the main challenges facing Europe in the medium term, such as the Green Deal, digitalisation, economic resilience, and the fight against inequalities. New own resources are needed immediately. We also need measures to ensure the effective defence of the rule of law.
“Furthermore, Parliament has repeatedly called for the end of rebates. If these conditions are not sufficiently met, the European Parliament will not give its consent. COVID-19 is still here and we are seeing new outbreaks in Europe. More than ever it is necessary to act quickly and courageously.”

EU budget Summit marathon

The European Union leaders continue the marathon negociation at Summit in Brussels on a coronavirus recovery package, and the seven year budget of the 27 members bloc.

The Leaders left the marathon summit early Monday morning hours and are plnanning to resume talks at 16:00 CET. The summit was originally planned as two-days event, ending on Saturday 19.

EU Summit have focussed on a proposed €1.68 trillion package, a seven-year budget and a coronavirus recovery fund.

Eastern Europe leaders have opposed attaching rule of law conditions, while southern European countries are rejecting demands from the so-called frugal four, now five, countries – Netherlands, Austria, Finland, Sweden and Denmark – for a great sum bound by economic reform requirements.

EU Council President Charles Michel urged leaders to set aside disagreements.

“Are the 27 EU leaders capable of building European unity and trust or, because of a deep rift, will we present ourselves as a weak Europe, undermined by distrust,” he said according to Euronews reports.

Early Monday morning, Austrian Prime Minister Sebastian Kurz tweeted that “tough negotiations had ended” but that leaders can be “very happy with today’s result.”

Prime Minister Rutte reacted at the the frustarions among some of the leaders: “I don’t really care” Dutch Prime Minister said during the pause in talks.
“I’m not distracted by background noise” he added. “I’m fighting for Dutch people and a strong Europe.”

Dutch Rutte is «not opitimistic»

«Hard work» lies ahead said the Dutch Prime Minister Mark Rutte at the doorstep of the European Summit (#EUCO) on recovery and long-term budget. However he underlined that due to prepararty period the positions of everyone became clear, and it also became more visible where the «bridges can be built», but of paramount importance is the conducting reforms in the countries which are at utmost in need of the European subsides, to make sure that this kind of situation is the last one.

«If the [member-states in need] are willing to receve subsides above the borrowing, it is very important to be sure that the reforms are conducted there» Rutte has underlined.
Dutch head of government said that he is not «optimistic», but from the other hand «you never know», because nobody is interested to «come together again», but still there are very difficult issues to be agreed upon.

«Nobody is willing to bring to standstill Brussels traffic once again in two week time, however it is not about the speed but about the content», Rutte joked whiling continuing. “Yes” to solidarity, but everything should be done that the countries, which are suffering from the crisis the most, would be able to cope with it the next time. The answer lies in the reforms of the labour market, the pensions reforms, etc. Being against subsidies, the Dutch government sill finds they are possible step, in case there are reforms guarantees, which are crucial. Because the funds should go from the North to the South “in principle last time”.

The Prime Minister has also explained the significance of the consistency of his position on reforms as a condition for two major reasons: the profound need of the stability of Europe in the “unstable world”, with such authoritarian players as China, the U.S., the situation in the Middle East, and role Russia is playing, and the second reason is the EU internal market, which should recover. He also put the Netherlands as an example of a strong internal market, which allows the country the speedy recovery in crisis.

However, Rutte has underlined, that he does not consider the veto perspective, but the power of reasoning as his major advantage, making the point that he does not have any aces in the sleeves.

“We don’t believe in grants set system. It is crucial to maintain the rebates on the sufficient level, and we still need to negotiate what is the sufficient level, and we need the reforms. If the South is in need of help, in terms of coping with crisis we understand that, because they have limited scope of dealing with it financially themselves, it is reasonable for us to ask for the clear commitments to reforms. If the part of loans are converted to grants, then the reforms are absolutely crucial, and we need guarantees that they would take place” Rutte said at doorstep of the Summit. “The EU economies should come of the crisis more résiliant, we need a strong Europe in an unstable world” he said. “The countries who are lagging behind in terms of reforms should steep up” he added.

Rutte also rebuffed the rumours and insinuations, underlining that he works for “strong’ Europe, which is also in the interest of the Dutch citizens – the guarantees instead of “insurances”. Among issues significant for his country he named the rebates.

“A weak compromise will not take Europe further” Rutte said.

The first round of negotiation has started between Dutch Rutte and French President Macron.

Mark Rutte added that he had dinner with the Italian Prime Minister Conte in The Hague, and he is sure that under Conte leadership Italy will pursue further the way for reforms. He also underlined that the personal relationship between both politicians have been always marked by mutual respect.

EU Special recovery plan Council

Invitation letter by President Charles Michel to the members of the European Council ahead of their meeting on 17-18 July 2020 reads as follows:

«On Friday, for the first time since the onset of the COVID-19 crisis, we will be able to meet again here in Brussels.

The COVID-19 pandemic has claimed many lives across Europe and dealt a serious blow to our economies and societies. It continues to impact our lives. All our efforts must focus on building a sustainable recovery. To that end, our meeting this week will be dedicated to the Multiannual Financial Framework and the Recovery Plan.

Since our last summit in June, we have worked intensively with all of you and taken due note of your concerns. On that basis I have put forward a proposal to address the key difficulties and to build bridges between the different positions. Finding agreement will require hard work and political will on the part of all. Now is the time. A deal is essential. We will need to find workable solutions and come to an agreement, for the greater benefit of our citizens.

Our meeting will start on Friday at 10.00 a.m. with the traditional exchange of views with the President of the European Parliament, David Sassoli. We will then hold our first working session and take it from there.

I look forward to welcoming you again in Brussels!»

EU leaders will meet physically in Brussels to discuss the recovery plan to respond to the COVID-19 crisis and a new long-term EU budget.

President Michel has proposed €1 074 billion to fulfil the long-term objectives of the EU, and to preserve the full capacity of the recovery plan. This proposal is largely based on the February proposal, which reflected two years of discussions between member states.

Rebates

Lump sum rebates would be maintained for Denmark, Germany, the Netherlands, Austria and Sweden.

Size of the recovery fund

The Commission would be empowered to borrow up to €750 billion through an own-resource decision. These funds may be used for back-to-back loans and for expenditure channelled through the MFF programmes.

President Michel has proposed to preserve the balance between loans, guarantees and grants to avoid over-burdening member states with high levels of debt. “This is also key for the future of the Single Market and to prevent more fragmentation and disparities,” he said.

Allocation of the Recovery and Resilience Facility (RRF)

This proposal ensures the money goes to the countries and sectors most affected by the crisis: 70% of the Recovery and Resilience Facility would be committed in 2021 and 2022, according to the Commission’s allocation criteria. 30% would be committed in 2023, taking into account the drop in GDP in 2020 and 2021. The total envelope should be disbursed by 2026.

Governance and conditionality

Based on the proposal, member states will prepare national recovery and resilience plans for 2021-2023 in line with the European Semester, notably country-specific recommendations. The plans will be reviewed in 2022. The assessment of these plans will be approved by the Council by a qualified majority vote on a proposal by the Commission.

Secondly, 30% of funding will target climate-related projects. Expenses under the MFF and Next Generation EU will comply with the EU’s objective of climate neutrality by 2050, the EU’s 2030 climate targets and the Paris Agreement.

The third conditionality proposed by the President is linked to the rule of law and the European values.
“We are taking a key step to anchor the rule of law and values in our European project and this is why I propose a strong link between funding and respect for governance and rule of law,” said President Michel.

Image: Europa building, Brussels, Dutch Prime Minister Mark Rutte.

Sassoli: «time to deliver» recovery

Parliament President David Sassoli urged EU leaders to take action on Europe’s recovery in the wake of the Covid-19 crisis.
Sassoli addressed heads of state and government at the start of a video conference of the European Council on 19 June to discuss the recovery plan and the EU’s next long-term budget.

“Time is a luxury we cannot afford,” he said. “We need to act urgently and courageously, as EU citizens, businesses and economies need an immediate response. Our citizens expect bold action. Now it is time for us to deliver.”

Sassoli called the Commission proposal “ambitious” but added: “In our view it only scratches the surface of what needs to be done.”
The President also spoke out against issuing loans as part of the recovery plans. “Parliament is keen to stress that any common debt issued must be repaid fairly, without burdening future generations,” he said.

“Let us not forget that providing support solely in the form of loans would have an asymmetric impact on the indebtedness of the individual member states and would be more costly for the Union as a whole. We have an opportunity now to refashion Europe and make it more equal, greener and more forward-looking. To this end, we should seize our chance to introduce a basket of new own resources.”
Sassoli called the introduction of new own resources for the EU “an essential prerequisite” for any overall agreement on the EU’s long-term budget.

Stressing the importance of an ambitious recovery plan and budget, he said: “Now is not thetime to water down our ambitions. We need to show our citizens the value of Europe and our ability to come up with solutions that matter in their lives.”

The President also addressed the ongoing EU-UK talks on future relations. The previous day Parliament had adopted a report setting out its views. “We will push for an ambitious, overarching and comprehensive agreement in line with the joint commitments undertaken in the political declaration. We believe that this is the best possible outcome for both sides and, despite the limited time available, with goodwill and determination, it is still possible. We have every faith in our negotiator, Michel Barnier.”

Gentiloni: EU faces unprecedented shock

“..Indeed, we are facing a shock without precedent since the Great Depression. Its economic and social consequences pose policy challenges unlike any we have seen in our lifetimes.
The inflation rate is further evidence of this. Data released this morning shows the inflation rate at just 0.3%. In April last year, it was 1.7%.
This is the first time that I present our country-specific recommendations, but it is in fact the tenth set of recommendations that the Commission has presented” Commissioner Paolo Gentiloni said, addressing Brussels press corps on May 20

“The first time was in 2011, when Europe was in in the depths of a very different crisis – in the aftermath of the Great Recession – to the one we face today.
And because, as they say, this time it’s different, so are the recommendations we present today. They are different. They come one week before the recovery plan and these are strictly linked steps.

Our recommendations present, first and foremost, the immediate challenges we are confronted with as a direct result of the pandemic: strengthening our healthcare systems; supporting our workers; and saving our companies.

At the same time, the sustainability and competitiveness challenges we faced before the crisis have not gone away.
Our climate is still suffering, our environment is still hurting. People in cities around the world have experienced clear skies and clean air, in many cases for the first time in their lives – but we know that this is just a pleasant side-effect of a dreadful, yet temporary situation.
If millions of people have been able to carry on working while locked down, including the staff of the Commission, it is a reminder of the huge task Europe faces to be competitive in the digital age.

So as we look to the future, our investment and reform objectives must remain focused on making a success of the green and digital transitions, as well as on social sustainability. I think it is very important that we are speaking today after having adopted the SURE instrument. The Sustainable Development Goals of the United Nations are and must remain our compass.

Let me now make four specific points.
First, in terms of fiscal policy, our message is crystal clear: there needs to be a supportive fiscal stance in all Member States and we recommend that all Member States “take all necessary measures to effectively address the pandemic, sustain the economy and support the ensuing recovery”.
When it comes to the question of excessive deficit procedures, our conclusion – which is that “at this juncture a decision on whether to place Member States under EDP should not be taken” – is fully coherent with the decision taken two months ago to activate the general escape clause.

Finally, we underline that public expenditure and investment are important to support the green and digital transition. Once fiscal policy normalises, it will be vital to avoid making the mistakes of the past: in the fiscal consolidation of ten years ago, investment was the first victim. To repeat this approach would be to sacrifice our long-term priorities.

Second, the fight against Aggressive Tax Planning again features in our recommendations and I must say this is an even clearer priority this in the past. All Member States, especially in the recovery situation, must be able to rely on their fair share of tax revenues to implement the fiscal support needed to get through this crisis.

Third, our European Union is also a Union in which the rule of law is of paramount importance. Also on economic grounds. When the rule of law is questioned, it impacts on the business environment and investment climate. Our recommendations this year also clearly highlight this issue.

We have also adopted today the latest enhanced surveillance report for Greece.

The report concludes that, considering the extraordinary circumstances posed by the coronavirus pandemic, the country has taken the necessary actions to deliver on its specific reform commitments.
I expect this report to pave the way for a positive decision by the Eurogroup on the next tranche of debt relief measures worth €748 million.

We also adopted streamlined post-programme reports for Spain and Cyprus.
In conclusion, before passing the floor to Nicolas. I have mentioned the Great Depression and the Great Recession. We must ensure that this crisis will not be remembered as the Great Fragmentation, in which a symmetric shock leads to asymmetric outcomes for countries, sectors, regions, individuals and generations.
This is why we need to help individuals and companies absorb the shock. We need to repair the shortfall in investment and equity. And we need to transform our economies, with a new growth model embracing the green and digital transition.

In a nutshell, we need a well-funded recovery plan. We will present it next week”.

Franco-German €500bn recovery plan

Angela Merkel and Emmanuel Macron propose a major financial recovery fund worth €500 billion.

Both leaders have proposed that the EU borrows on the financial markets in order to disperse some €500bn through grants to European economies hit hardest by the coronavirus pandemic.

Under the Franco-German proposal the member states receiving the funds would not need to repay the cash.

Liability for the debt would instead be added to the EU budget, to which member states contributions vary according to the size and prosperity of their economies.

Should the proposal receive the endorsement of the 25 other member states, it would amount to a significant move towards a level of burden-sharing and fiscal transfers firmly opposed during past crises. The European commission would borrow the money under the EU’s name.

It would come on top of the bloc’s next budget — the Multiannual Financial Framework — and the €540 billion of loans already announced by the Eurogroup.

The money raised by the Commission would be used “in a targeted manner” to support sectors and regions particularly impacted by the pandemic.

Speaking during a virtual press conference with France’s president, Merkel said: “We are convinced that it is not only fair but also necessary to now make available the funds … that we will then gradually repay through several future European budgets”.