Edition: International | Greek
MENU

Home » EU Actually

How reliable is the EU recovery plan?

In interviews in the Financial Times, two EU heavyweights, the German Wolfgang Schauble and the French Bruno Le Maire, were very critical of the rollout of the EU 750-billion-euro recovery plan

By: N. Peter Kramer - Posted: Wednesday, February 10, 2021

"The 750 billion recovery plan threatens not only to create a hole in finances, but also another hole in confidence in EU politics."
"The 750 billion recovery plan threatens not only to create a hole in finances, but also another hole in confidence in EU politics."

N. Peter Kramer’s Weekly Column

In interviews in the Financial Times, two EU heavyweights, the German Wolfgang Schauble and the French Bruno Le Maire, were very critical of the rollout of the EU 750-billion-euro recovery plan. This plan should allow the EU to pull itself out of the COVID crisis with a kind of Baron von Munchhausen solution. The gigantic amount of euros consists of two parts: grants amounting to 390 billion euros (money that the memberstates do not have to repay) and 360 billion euros in loans (money that they do have to repay, but who is taking this seriously?). The memberstates have to submit their recovery plans to the Commission, deadline April 2021, while the first payments would only start from July. The Commission needs three months to investigate whether the memberstates’ recovery projects do meet the conditions.

Bruno Le Maire, President Macron’s Minister of Finance, wants to see the money in the French bank account faster. “It is all too slow and it is all too complicated”, he sneered at the EU bureaucracy in Brussels. Wolfgang Schauble, a long time Angela Merkel’s dreaded Minister of Finance, believes that the European Commission does not have the necessary competences to be able to critically assess all recovery projects. If only because not all memberstates are willing to provide sufficient details. There is therefore a great risk that the money will not be used for necessary structural reforms, but for political gifts. After all, the bulk of the EU recovery plan money goes to Southern European countries. And Italy is the biggest receiver, with 65 billion euros. ‘It seems that in Italy a significant portion of the money will be used to grant tax rebates and provide ad hoc aid for electoral reasons’, the chief economist of a Belgian bank fears.

The 750 billion recovery plan threatens not only to create a hole in finances, but also another hole in confidence in EU politics.

READ ALSO

EU Actually

How serious is the Conference on the Future of Europe?

N. Peter KramerBy: N. Peter Kramer

The official kick-off of the Conference on the Future of Europe (read: EU) took place on May 9, Europe Day, in Strasbourg

View 01-02/2021 2021 Digital edition

Magazine

Current Issue

01-02/2021 2021

View past issues
Subscribe
Advertise
Digital edition

Europe

EU officials risk approval of recovery fund by Finland

EU officials risk approval of recovery fund by Finland

EU Commissioners may have placed the bloc’s €750 billion recovery fund on shaky ground after telling MEPs the arrangement could become a regular and even permanent mechanism to boost growth

Business

From Band-Aid to Deep Impact: Building Effective Social Sector Organisations

From Band-Aid to Deep Impact: Building Effective Social Sector Organisations

Making a real difference requires combining your passion with a problem-solving mindset and a rigorous approach

MARKET INDICES

Powered by Investing.com
All contents © Copyright EMG Strategic Consulting Ltd. 1997-2021. All Rights Reserved   |   Home Page  |   Disclaimer  |   Website by Theratron