The Recovery Fund, which EU leaders will discuss on Thursday 23 April, will have to be set up "in the coming weeks" to stimulate economic recovery and cannot therefore be part of the negotiations on the Multiannual Financial Framework (MFF) 2021-2027, Eurogroup President Mário Centeno told the European Parliament's Economic and Financial Affairs Committee on Tuesday 21 April.
We have to be "ambitious" to find "new money" in an "innovative way" that will spread the costs over time, the Portuguese minister said in a speech by videoconference. "Discussions on the MFF should not be repeated", as the Recovery Fund "must be deployed quickly" when containment ends, he added, betting on political decisions "in the coming weeks". Should they fail, some Member States would face such a high level of public debt that a risk of euro area fragmentation could emerge, he warned, eager to avoid "bad memories" of the 2012 financial debt crisis.
Mr Centeno acknowledged that there were different positions between countries wishing to mutualise debt at European level to finance the Recovery Fund and others who formally oppose it, echoing the different positions put forward (see EUROPE 12470/1). But "this does not mean that they dispute the need for extraordinary measures", he said.
BICC. The President of the Eurogroup also wondered how best to spend, via the EU budget, the additional funds that will be raised.
According to him, the future fiscal capacity of the euro area (BICC) could play a real role, provided that "naturally, its size is reviewed". The euro area budget would promote shared governance and flexibility in the management of funds, he said. And to underline the supervisory role that the European Parliament would thus play, in response to questions from Jonás Fernández (S&D, Spain) and Stéphanie Yon-Courtin (Renew Europe, France).
On the basis of the guidelines set by the European Council on Thursday 23 April, the Commission will make proposals on 29 April on a recovery plan and a draft revised MFF.
ESM. Markus Ferber (EPP, Germany) wondered why countries such as Italy and Spain refuse to activate the stand-by credit called the Enhanced Conditions Credit Line (ECCL) of the European Stability Mechanism (ESM), the rescue fund for the euro area, as adapted by the Eurogroup to respond to a symmetric shock.
Mr Centeno said he was convinced that Member States would soon realise that there would be no stigma attached to this aid vis-à-vis the countries that will request it.
On Tuesday, Italian Prime Minister Giuseppe Conte asked to see the texts explaining the ECCL before examining whether the ESM assistance is in his country's interests. But the creation of a Recovery Fund to jointly issue debt at European level should be "the central element" of a European recovery plan, he said, supporting the French and Spanish proposals put forward. (Original version in French by Mathieu Bion)