The Recovery Fund takes shape, investments for 1,5 trillion euros. Von der Leyen's proposal

(By Massimiliano D'EliaUrsula Von of Leyen, yesterday in front of the European Parliament: "my deepest apologies to Italy for the delay in surgery". The parliamentarians then discussed a non-binding resolution presented by popular, socialists, liberals and greens, in which the contours of the necessary European response to the health and economic crisis are outlined. The result of the vote on a text, the subject of negotiations between the political forces that in fact support the European Commission led by Ursula von der Leyen, will be known today. The resolution calls on Brussels to propose a massive economic recovery package in which investments would be financed by an increased budget as well as by bonds guaranteed by the same budget, without involving the mutualisation of existing debt.

But let's take a step back to last week when the Eurogroup proposed an agreement in principle on the subject of financing to be introduced into the Community economy. In the deliberations before and during the videoconference, the finance ministers never discussed the coronabonds, but they agreed to evaluate the French finance minister's proposal Bruno Le Maire and the Italian Gualtieri, to establish a dedicated fund for the reconstruction of Europe (Recovery Fund). This fund will have to enter the dynamics of the seven-year EU budget 2021-2027. The draft also talks about the use of financial resources from the Mes (bailout fund), for an amount equal to 2 per cent of GDP (for Italy 37 billion euros), for direct and indirect health costs, linked to COVID-19. On 23 April, the Heads of State and Government will therefore meet to approve the draft released by the Eurogroup. On the question of a fund to manage common European debts, it seems that we are still in the stage of pure speculation. although the French finance minister Le Maire, todayin the German newspaper WELT he said: "The Recovery Fund should allow us to borrow money, only for a limited period of time and for one purpose only, i.e. investments. The crucial difference with respect to euro bonds (ed. Eurobond, Eurobond) would be to create a temporary and targeted fund without asking for the long-term sharing of past and future public debt. The idea behind this is to stretch the enormous cost of economic recovery for all countries ".

Croatian Minister of Finance Zdravko Marie said: " We are in favor at the request to activate the coronabonds. As regards the "Reconstruction Fund" and its financing, we are not particularly in favor".

The Greek finance minister Christos Staikouras (editor's note: Greece currently holds the presidency of the European Council and coordinates the negotiations), he told Welt: "Greece, which has just started to recover sustainably from the serious financial crisis, is calling for the establishment of a common debt. I am deeply convinced, adds Staikouras, that the creation of the reconstruction fund is essential to restarting European economies after the crisis".

However, the recovery fund can become a reality

The president of the EU Commission, Ursula von der Leyen, writes the Welt, will present a possible proposal tending to a compromise between the parties, before the Heads of State and Government discuss the matter next Thursday. The contacts between the members of the EU financial commission, the German and Dutch ministers are unceasing.

Von der Leyen would have presented this week, writes the Welt, a proposal for the financing of the fund (ed. Recovery Fund), whose financing will have to be put into the system in the EU budget 2021-2027.

"The EU budget will be the mother ship of economic recovery“Said von der Leyen. "We are talking about many billions". "To spend this money right away, the Commission is trying to find effective solutions. The size of the fund is gaining more clarity, around € 1,0948 trillion is being discussed for the seven years 2021-2027. The Financial Commission says investments of € 1,5 trillion will be possible".

The mountain of money from this fund will not have to be transferred from the Member States, because the Commission will borrow the billions on the financial markets.

 

The Recovery Fund takes shape, investments for 1,5 trillion euros. Von der Leyen's proposal