(by Massimiliano D'Elia) Thursday 23 April there will be another summit via videoconference between the Heads of State and Government to decide on the measures to be implemented to stem the damage to the economy, caused by Covid-19. In these days the very close contacts between the European chancelleries and the Sherpas of the economy continue. The phone calls between the president of the Commission Ursula von der Lyen and the various heads of government follow one another, yesterday he heard the Italian Prime Minister, Giuseppe Conte.
Von der Lyen is working on a 1000 billion plan euros through the use of European bonds to be placed on the external market and managed entirely by the Commission. The money will go to the countries most affected by the pandemic in two ways, writes the Republic, partly in the form of grants, partly as low-interest loans to be repaid no earlier than 20 years.
The intention of the President of the Commission is to present the plan directly to the representatives of the EU governments on 23 April and then publish its contents no earlier than 29 April. The guarantee that the Commission will offer the markets for them ursulabond, will be the EU budget 2021-2027, but also the following ones, thanks to the reliability of Triple A enjoyed by the EU. The plan aims to 1.000 trillion of resources with near-zero interest rates which, added to the measures of the Eurogroup, would make up an anti-crisis package of approximately 1.500 billion.
The money from the bonds, the Republic specifies, would be distributed to the governments most affected by the crisis between unpaid grants and low-cost loans.
The only condition for giving the green light to the plan is to reach a general agreement on the budget for 2021-2027, which, like every seven years, sees opposing groups of countries between those voted for austerity and those who strive for expansive economic policies.
Another consideration is that the EU budget is made up of the money that governments pay to Brussels and potential expenses, a maximum amount of funds that the EU can ask from countries, only in case of need. And it is precisely from the potential expenses that we want to get around 2% of the European GDP, necessary for the von del Lyen plan.
The plan, so proposed, could also be accepted by the axis of the Northern countries (opposed to the coronabond-eurobond) because it would have the merit of putting in place Eurobonds-ursulabond disguised as it would be the Commission to issue them, avoiding direct pooling of resources from national coffers. A solution that will also appease the hearts of the electorates of the Nordic countries, since it would be the EU Commission that would manage and control the entire operation. The plan could also provide, in support, the creation of an external fund, also managed by the Commission (Recovery Fund?).
Although the plan is able to satisfy all parties, it does not solve the "time" issue, because if we refer to the 2021-27 budget, the first discussions will start only next January. The issuance of bonds, on the other hand, must be very fast, especially Italy asked for it, struggling with the incessant requests for subsidies from small and medium-sized enterprises, close to filing for bankruptcy.
In this regard, the EU institutions, to balance needs with respect to the time variable, push for governments to use the package proposed in draft by the Eurogroup, or 540 billion to be obtained from the EIB loan, the “Sure” fund for social safety nets and Mes without conditionality (equal to 2 per cent of the GDP of each applicant country, 37 billion euros for Italy, immediately available).
Measures that guarantee immediate liquidity to States, pending the implementation of von der Lyen's plan which, as seen, will not be able to see the light before 2021.