Chancellor Angela Merkel and President Emmanuel Macron give a joint press conference on May 18 on the revival of the European Union. – AFP
- Emmanuel Macron and Angela Merkel proposed on Monday the creation of an “ambitious, temporary and targeted” European stimulus fund of 500 billion euros to help the EU overcome the historic crisis caused by the coronavirus pandemic
- This first step towards a European debt pooling is “a historic turning point”, welcomes LREM MEP Stéphane Séjourné.
- But this recovery plan is already raising questions and criticism.
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A new plan for Europe. Emmanuel Macron and Angela Merkel proposed Monday
creation of a stimulus fund “Ambitious, temporary and targeted” 500 billion euros to help
the European Union to overcome the historic crisis caused by the pandemic of
coronavirus. “For the first time, together with Germany, what we are proposing to the 27 member countries of the EU is to raise a common debt on the markets,” said the French president.
For the first time together, with Germany, what we are proposing to the 27 member countries of the EU is to raise a common debt on the markets, to use 500 billion euros in aid to finance in priority sectors and regions most affected by the crisis. https://t.co/0IGaRLD5WB
– Emmanuel Macron (@EmmanuelMacron) May 18, 2020
After weeks of hesitation, and even tensions in Europe around the crisis linked to the epidemic, the Franco-German couple wishes to move forward. But this recovery plan is already raising questions and criticism.
Why is this recovery plan “historic”?
To limit the recession on the continent, Paris and Berlin want to create a 500 billion euro fund as part of the next EU budget. The capitals propose that this envelope be financed by loans from the European Commission on the markets “on behalf of the EU”, and not by the States themselves. “It is a historic turning point. For the first time, the Commission will raise debt and this money will be distributed to the sectors of activity and the European regions most in difficulty “, welcomes LREM MEP Stéphane Séjourné.
“So these are not loans to states but real endowments,” added the chairman of the French delegation of the Renew Europe group in the European Parliament. Clearly: countries will not have to directly reimburse the amounts collected. The reimbursement could be made from the budget of the European Union, financed by all the member states. It would be a first step towards debt pooling at European level, to which Berlin but also northern European countries have long been hostile.
A plan already highly criticized in the North of Europe
If this announcement has aroused the enthusiasm of the countries of the South, Austria, Sweden, the Netherlands, or Denmark are much more reluctant. After consulting with his counterparts, Austrian Chancellor Sebastian Kurz said on Twitter that their position “has not changed”. Officials in these countries have said they are ready to help with “loans, not grants”, and do not want an increase in the EU budget, but a redistribution of its resources. A way to sweep the criticism of the debt pooling project also in Germany.
Our position remains unchanged. We are ready to help most affected countries with loans. We expect the updated #MFF to reflect the new priorities rather than raising the ceiling.
– Sebastian Kurz (@sebastiankurz) May 18, 2020
“A Franco-German agreement principle still carries weight at the level European, so I think the hard part is done, “wants to believe Stéphane Séjourné. “We will then have to discuss all the modalities to have this agreement accepted and, on May 27, at the next summit, give a clear mandate to the president of the European Commission. Economy Minister Bruno Le Maire, however, was less enthusiastic on Tuesday: “It will be a difficult game, we must not hide it.”
An agreement welcomed in contrasting ways in France
Questioned by France InfoMEP David Cormand notes a “symbolic first step in terms of volume”, but says the plan is “far below what should be done”. The boss of the PS, Olivier Faure, also welcomed this “step” in the pooling of debts.
Franco-German announcements are a good signal:
✅ € 500 billion of “real” money to invest post crisis
✅ relocation of industry, including healthcare, and investments to Europe
✅ green deal
This deal = the start of an offensive positioning for Europe https://t.co/5k6AnYFj22– Valérie Rabault (@Valerie_Rabault) May 18, 2020
Manuel Bompard is more skeptical. “We remain on a scheme of increasing debts, regrets MEP La France insoumise. Of course, it is now European, but someone will have to pay it, it will be the Member States, in proportion to their participation in the European budget. The elected official pleads for a cancellation of these debts. “The text of the agreement also maintains that this aid will be conditional on reform measures, he continues, that is to say that budgetary restrictions will be demanded in return for governments.”
The European Commission will distribute the funds on the basis of criteria not yet known. But the aid will be conditioned on “a clear commitment by the states to follow sound economic policies and an ambitious reform program.” This is the return of austerity plans. pic.twitter.com/pYCDVpAR0M
– Manuel Bompard (@mbompard) May 18, 2020
Marine Le Pen, for her part, denounced on Twitter “A federalist headlong rush”: “We will lose even more sovereignty, pay even more for the EU, and maybe go towards a European tax tomorrow. “
Critics brushed aside by Stéphane Séjourné: “Some will always seek to criticize. But I don’t think we are far from asking governments to make budget cuts. The Commission drew conclusions from the 2008 crisis, which brought Salvini to power [patron du parti italien d’extrême droite la Ligue] especially, “he says. “It is, on the contrary, a Keynesian long-term investment plan. Now remains to be validated by the 27 EU states.
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