Читать книгу The economic policy of the european union in the context of the covid-19 crisis - Francisco Jesús Carrera Hernández - Страница 8

The aforementioned triple safety net was, however, an intermediate step. A comprehensive recovery plan was proposed in the joint roadmap for recovery “Towards a more resilient, sustainable and just Europe”, which was welcomed by the European Council on the occasion of its videoconference on April 23, 2020. Among other areas of action, new measures involving an unprecedented investment effort were proposed. From this point on, two clearly opposing positions became even more visible.

On the one hand, those States that proposed the reinforcement of the EU’s solidarity through actions other than the SURE and the ESM. The need to create new instruments and incorporate aid in the form of direct transfers to the Member States without the need for reimbursement was raised. The Franco-German initiative for the European Recovery from the Coronavirus crisis, presented on May 18, 2020, is revealing in this regard by proposing a temporary and flexible solidarity and growth fund financed through loans contracted by the European Commission in the markets on behalf of the Union27. The amounts handled in this initiative amounted to 500,000 billion euros and were linked, as could not be otherwise due to how the aid was conceived, to an increase of the multiannual financial framework and a modification of the Decision on European Union’s own resources. It was a proposal that revealed a certain conditionality linked to the adoption of health economic policies and an ambitious reform program.

Against this position, the four frugal states expressed their antithesis in a Non-paper EU support for efficient and sustainable COVID-19 recovery28. They proposed the creation of a temporary emergency fund to support economic recovery and the resilience of health sectors against future outbreaks of the disease. They agreed on the need to “modernize” the multiannual financial framework but did not assume the creation of instruments that would entail debt mutualization measures or significant increases in the EU budget. Their proposal included the creation of an emergency recovery fund but based on a “loans for loans” approach. That is a return to (advantageous) loans with conditionality.

In this context, the European Commission launched a proposal on May 27, 2020. It was based, as it turned out, on the creation of a recovery instrument, globally called Next generation29. It was a broad, ambitious and complex proposal that sought to unite positions but openly favored the establishment of instruments involving direct transfers to the States without renouncing the granting of repayable loans. It is a proposal made in the context of the negotiation of the multiannual financial framework for the period 2021-2027 and a new Decision on its own resources, forcing the issue to be reconsidered.

Indeed, the development of a new MFF for the 2021-2027 period was already in progress since 2018. Starting from a situation where the MFF for the 2014-2020 period set its ceiling at 1% of EU gross national income, the Commission launched a proposal for the following period slightly increasing the EU budget (1.11% of GNI) in the context of the consummation of BREXIT. By the end of 2019, an agreement had still not been reached. The European Parliament even proposed to increase the MFF to 1.3% of GNI. Finland’s Presidency was trying to reach an agreement by lowering the Commission’s proposal30. It is in this difficult negotiation context that the pandemic occurs, forcing the Commission to present a new proposal that doubles the EU budget if Next generation is included31. This increase is certainly temporary in nature but it is unparalleled in Community practice. This health crisis has therefore clouded the real debate around the MFF applicable to a situation of normality in a post-BREXIT European Union of 27 Member States.

The highly complex negotiations between the Member States were closed in July 2020, only after accepting a reduction in the proposed Multiannual Financial Framework32 and an increase in the rebates in favor of Germany and the four “frugal” states, rebates that were originally planned to be eliminated33. At the same time, it was accepted to accelerate the introduction of new own resources from the EU budget in 2021, focused on taxes on plastic waste and carbon, and the digital tax34.

Next generation was definitively approved in December 2020. The recovery instrument has been endowed, in line with the Commission’s proposal, with 750,000 million euros. The financing of this new instrument will be provided by exceptional income obtained through loans contracted in the capital markets. Practically all of the capital mobilized under the new instrument will therefore be paid out through the amounts obtained in this way and will be transferred to the EU programs generically provided for in the recovery instrument.

The global budget foreseen in the recovery instrument is planned to be distributed in three blocks, with 384,000 million euros for reimbursable and non-reimbursable aid, 5,600 million euros for provisions for guarantees and other programs, and the remaining 360,000 million euros for loans35.

Most of the funds earmarked for the recovery instrument are channeled through a new instrument (a program to finance recovery and economic and social resilience through support for reforms and investments) called the Recovery and Resilience Mechanism (RRM). Aimed at all Member States, but especially those most affected by the health crisis, the RRM is a program at the service of economic and social cohesion (the legal basis of the Regulation is art. 175.3 of the TFEU) that connects with the ecological and digital transition. It is a temporary mechanism to support long-term investments. For actions in a shorter period, the support objective is achieved through other programs such as SURE or REACT-UE. Through it, 672,500 million euros are allocated in the form of aid (312,500 million) and loans (360,000 million). This implies, therefore, that the entire amount earmarked for loans will be channeled through the Recovery and Resilience Mechanism. This is a very relevant aspect because, fortunately, unlike the position of several States, already indicated, and the operation of the ESM itself, the recovery instrument, being less ambitious than the Commission’s initial proposal, does not simply rely on loans for financial aid. Thus, genuine solidarity in the EU is actually strengthened36.

Therefore, we are witnessing an unprecedented prospect of EU indebtedness and an increase in the Community budget in quantitative and qualitative terms. As M. Ruffert has pointed out, “Next Generation” implied a profound change in budgetary practice37.

In fact, in situations where, prior to the health crisis, EU borrowing on the capital markets has been used to provide financial support to the Member States, it has always been of a very limited nature, concentrating, as I have already indicated, on the balance of payments support instrument and in the European Financial Stabilisation Mechanism (EFSM)38. Both based financial aid on individual loans only39. The recovery instrument is therefore a triumph of the ideas revolving around the creation of common debt instruments at EU level, at a time when there is still no EU Treasury. It is, in any case, an exceptional and temporary instrument intended exclusively to deal with the direct economic and social consequences of the pandemic. However, this temporary period could be extended until 2058, the deadline for finalizing the repayment of the loans.

It is clear, in short, that it has taken a pandemic to promote a broad debate on the scope of financial solidarity among the Member States beyond the implementation of the ESM or other instruments, always temporary, that emphasize the concession of loans in exchange for their repayment with interest and associated conditionality. We are witnessing a major evolution in financial assistance and the strengthening of solidarity.

All these aspects will be addressed in more detail in this monograph over three chapters. The first chapter presents the new multiannual financial framework and the new Own Resources Decision finally adopted in December 2020. It is a work carried out by Professor Matilde Lavouras, from the University of Coimbra, and Thaís Martins, from the Central Bank of Portugal. In the second and third papers, Professor José María Porras Ramírez, from the University of Granada, and Professor Tamara Çapeta, from the University of Zagreb, address the study of the recovery instrument. The last one, exploring the issues related to the new financial package that may reach the Court of Justice of the EU.

From this introductory chapter, however, I would like to address several issues in advance, starting with an explanation of the context prior to the onset of the pandemic crisis, beyond the negotiation that was already open regarding the approval of the multiannual financial framework for the next period and the approval of the new Own Resources Decision.