The Multiannual Financial Framework (MFF) 2021-2027 is the right instrument to make the huge investments needed to revive the economy after the coronavirus crisis, said the President of the European Commission, Ursula von der Leyen, on Wednesday 15 April in Brussels.
"We are not talking about billions, but thousands of billions of investments" required, she said, presenting the principles of a European exit strategy from the pandemic to the press (see EUROPE 12467/2).
The European Commission is expected to unveil a revised proposal on the MFF 2021-2027 at the end of April, a few days after a fourth crisis meeting of the European Council by videoconference on Thursday 23 April, during which the dossier is expected to be discussed.
How will these investments be made? The Commission is considering obligations that it could enter into on behalf of the EU and for which EU Member States would act as guarantors. It is considering raising the ceilings for the EU's own resources (see EUROPE 12464/25).
"We are working on this new EU budget, which is so significant that it will provide the necessary leverage to make the funds available for economic recovery", Ms von der Leyen said. A significant part of the envelope still to be determined could also be mobilised at the beginning of the cycle, over the first 3 years ('frontloading').
The President of the Commission justified the use of the EU budget. "It is an instrument that has already (...) proved its worth, although it has not yet reached the scale envisaged today", she said. She also pointed to the redistributive character of the MFF through the cohesion policy.
Presenting alongside her, the President of the European Council, Charles Michel, confirmed that the European budget, as an instrument of budgetary "solidarity", will be part of the recovery plan that the Union will adopt. On 23 April, the Twenty-Seven will hold "a new strategic discussion on the MFF", he added.
Negotiations on the MFF have come to a halt since previous talks broke down and the onset of the health crisis (see EUROPE 12431/1). But, in the opinion of one diplomat, "future discussions will be no less complicated", judging by the blockages observed in attempts to increase the size of a budget by "a few hundredths of a percentage".
Recovery Fund. To complete the unprecedented arsenal of economic and budgetary measures, the Eurogroup proposes to set up a Recovery Fund to finance, through the EU budget, the investments necessary for economic recovery (see EUROPE 12465/2).
It will be up to the Twenty-Seven to define the size and modalities of such a fund, which will make it possible to spread budgetary costs over time through innovative financing. Some countries are advocating joint debt issuance at the European level, while others have made debt pooling their red line.
There are different "sensitivities" about possible tools, Michel acknowledged. However, in his view, the debate on the means to be mobilised will be difficult to resolve until there is greater visibility as to the amounts required.
In addition to a European strategy for a gradual exit from the pandemic, Mr Michel mentioned three other working approaches: - repair of the internal market, "damaged" by health measures; - a reflection on the resilience of the EU in times of crisis; - defending "multilateralism" to respond to global challenges such as pandemics, while the United States suspends its contribution to the WHO. (Original version in French by Lionel Changeur with Mathieu Bion)