EU Heads of State or Government will discuss on Thursday 26 March how to strengthen health and economic lines of defence against the COVID-19 pandemic. They will also try to outline a coordinated exit strategy.
"It is obvious that the European Union is an added value" and that no country can get by "without a team dynamic", said the President of the European Council, Charles Michel, on Wednesday 25 March on the Belgian news channel LN24. He hoped that the Twenty-Seven will be able, on Thursday, to commit to an "intra-European plan" for economic recovery that "will mobilise European and national capital and also the private sector", a process that began on Wednesday with the Member States' ambassadors to the EU.
"This is not a sprint: this crisis will keep us busy in the short, medium and long term", predicted the former Belgian Prime Minister.
A draft set of conclusions by the President of the European Council leaked to the press on Wednesday advocating "a comprehensive recovery plan combined with an unprecedented level of investment". It also refers to the creation of a "genuine European crisis management centre" with increased and more cross-cutting capabilities.
‘Coronabonds’. Supporting the budgetary (suspension of European budgetary rules), monetary (ECB's EPPP operation) and economic measures (relaxation of the state aid framework) already taken, nine Member States - Belgium, Spain, France, Greece, Ireland, Italy, Luxembourg, Portugal and Slovenia - are of the opinion that the European Union must go even further.
According to them, a European institution could issue a "common debt instrument" to raise funds on the market to repair the damage caused by the pandemic. These securities, which would benefit all Member States, would have a long maturity and the volume of issuance would have to be high enough to be effective, they believe.
It is also stressed that the macroeconomic crisis is due to an symmetric external shock for which no one Member State is responsible, but which produces adverse consequences for all.
The nine countries also raise the possibility of identifying specific funding within the EU budget for anti-crisis spending for the years 2020 and 2021. They also call for action to prevent strategic economic assets from being taken over by hostile takeovers.
"We do indeed need a capacity for strategic autonomy; therefore, we need to guarantee a supply capacity in Europe", Mr Michel said, citing sectors such as "energy and digital technology".
The EU has established a European framework for the supervision of foreign direct investment. More recently, the Commission has decided to provide financial assistance to the German laboratory CurVac, whose research on a vaccine has attracted interest in the United States (see EUROPE 12447/1).
See the letter from the nine Member States: https://bit.ly/2WJqOK2
The idea of ‘coronabonds’ is still far from being a consensus within the Eurogroup, as the countries of northern Europe are hostile to it. The Netherlands considers that its position has already changed enormously in two weeks, notably on the freezing of the Stability Pact. They prefer at this stage to pursue all the options already available rather than immediately resorting to a joint debt issue as a last resort.
Mobilisation of the ESM? Meeting in enlarged format on Tuesday evening, the Eurogroup opted to grant ECCL credit lines via the European Stability Mechanism (ESM), the Eurozone's permanent rescue fund with a capacity for action of €410 billion (see EUROPE 12453/1).
According to the letter sent by Eurogroup President Mário Centeno to Mr Michel, the terms of these credit lines - conditions (return to post-crisis budgetary stability), size (2% of national GDP), use (health and economic expenditure) - will have to be finalised "before the end of next week".
The question of the conditions attached to the mobilisation of the MES, "is exactly the subject that is on the table of the Heads of State or Government", Mr Michel acknowledged.
It should be noted that the formalisation of an ESM support plan will also enable the ECB to activate, if necessary, its MTO operation to repurchase public securities, which the monetary institute had drawn up in 2012 during the sovereign debt crisis (see EUROPE 11336/18).
In its letter, the Eurogroup also reports a doubling of national budgetary measures (2% of GDP) and an increase to 13% of GDP of bank guarantees granted to avoid economic collapse.
See Mr Centeno's letter: https://bit.ly/2QN2PWy
On Thursday, the European Parliament will adopt its position on the emergency budgetary and economic measures that the European Commission has laid out (see EUROPE 12454/2).
The Saudi Presidency of the G20 has also convened a summit of the world's 20 largest economies by videoconference to coordinate measures to combat the pandemic.
Enlargement. The Twenty-Seven are also expected to endorse the conclusions of the General Affairs Council, adopted by written procedure on Wednesday, authorising the opening of EU accession negotiations with Albania and North Macedonia (see EUROPE 12453/20).
This decision, expected since June 2018 by the two countries (see EUROPE 12049/1), follows the presentation by the European Commission of a new methodology for the enlargement process for the countries of the Western Balkans (see EUROPE 12419/2) and a new very positive progress report on the two countries (see EUROPE 12437/7).
Migration. Finally, the High Representative of the Union for Foreign Affairs, Josep Borrell, will brief EU leaders on his discussions with Turkish Foreign Minister Mevlüt Çavuşoğlu on the update of the EU/Turkey Declaration of March 2016 on the management of migration flows.
At the end of February, statements by Turkish President Recep Tayyip Erdoğan had provoked new tensions at the Greek-Turkish border. Following his visit to Brussels at the beginning of March (see EUROPE 12442/7), Mr Borrell was asked to look into ways of remedying the shortcomings identified, in particular as regards the payment of the €6 billion package promised by Europeans or the liberalisation of the visa regime for Turks wishing to travel to the EU, also promised in Ankara. (Original version in French by Mathieu Bion with Cerise Camille-Gessant and Solenn Paulic)