Budgetary and financial response to the COVID-19 crisis
The European Union has acted quickly to tackle the COVID-19 pandemic and its consequences. Showing considerable flexibility, EU institutions have organised a package of measures (some already decided, others proposed or requested), to counter the COVID-19 crisis, drawing both on the EU budget and a wider economic package. According to the European Parliament Research Service blog, the European Commission has been called by the Parliament to propose a €2 trillion recovery package, distributed mostly through grants rather than loans, and warns against the presentation of misleading figures. The recovery package should provide real funding to help those hardest-hit, and focus on climate mitigation, digitalisation, and a new health programme. The European Commission has committed to proposing a comprehensive recovery plan, along with revised 2021-2027 MFF proposals, on the 27th of May 2020.
In addition, in order to bring the European economy back on track, the European Commission has announced the recognition of the proposal made by France and Germany. This proposal acknowledges the size of the economic challenge that Europe faces, and rightly puts the emphasis on the need to work on a solution with the European budget at its core. The Commission is convinced that the economic recovery strategy has to base itself on three different pillars that operate together:
- Immediate measures that were taken to enable the Member States to support the economy, in the form mainly of the flexible State Aid framework and the triggering of the escape clause of the Stability and Growth Pact, as well as the support provided by the ECB and the EIB;
- €540 billion of loans, including the SURE Programme; and
- Multiannual Financial Framework topped up by the Recovery Instrument.
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