The EU budget - and therefore the next EU Multiannual Financial Framework (MFF) - will have to play a leading role in the economic recovery plan after the coronavirus crisis, according to most political groups in the European Parliament.
The Commission will have to draw up a proposal for revising the MFF after the meeting of EU leaders on Thursday 23 April (see EUROPE 12472/1).
Although the European Parliament is in favour of an ambitious MFF 2021-2027 and new own resources to support the EU Recovery Plan, it is divided on the priorities to be financed to meet the challenges.
The EPP group in Parliament calls for the creation of 'recovery bonds' to finance the reconstruction of the European economy. "Backed by the long-term EU budget, the European Commission should ask for the necessary money from the markets so that we don’t need to increase the national debt of any country", said Esteban González Pons, vice-president of the EPP group.
Dacian Cioloș, president of Renew Europe, considered on 22 April in La Libre Belgique that the MFF is an element of the recovery plan, but it will "not be sufficient" even at the level proposed by the European Parliament (1.3% of GNI). According to Mr Cioloș, the MFF "can be a lever for mobilising financial resources to invest in the European economy". The group has published a document presenting various proposals in the context of COVID-19 (https://bit.ly/3auKSmH ).
A €1,500 billion recovery fund. In a letter (https://bit.ly/2XV1VeX ), S&D group chair Iratxe García Pérez of Spain argues that the recovery plan will require EU action in the form of grants, not loans, with a "solid" MFF.
The group requests: - a mandatory mid-term review of the MFF; -a €1,500 billion 'Recovery Fund' in addition to the MFF (as presented by Spain). According to MEPs in this group, the recovery fund should be designed within the Community framework and "must be placed within the headroom between the MFF ceilings and the own resources ceilings". This financial instrument could issue 'recovery bonds' by borrowing money on the markets and issuing a common debt (ultra-long or perpetual bonds) guaranteed by the EU budget and financed by new own resources. The own resources decision should therefore be revised accordingly, according to the S&D Group. The current ceiling of 1.2% of gross national income (GNI) is deemed insufficient and should be raised to at least 2% of EU GNI, according to the S&D.
A three-part recovery plan. In a document (https://bit.ly/3auhuge ), the Greens/EFA group in the European Parliament calls for a three-phase EU-wide recovery plan.
A basket of new own resources (Carbon Border Adjustment Mechanism, Kerosene Tax, plastic tax, FTT, digital tax and share of the CCCT) could thus be introduced in 2021-2022 and would finance the recovery plan, David Cormand (Greens/EFA, France) told EUROPE.
He also believes that the MFF should no longer be worked out in terms of a percentage of EU Gross National Income (GNI), as this will fall as a result of the crisis.
For the first (health) phase of the recovery plan, Cormand said "at least €40 billion" should be added to the EU budget, modifying the current MFF ceilings for 2020.
For the 'green transition recovery', between 20 and 30% of the EU recovery plan is expected to come from the EU budget, i.e. around €150-225 billion over two years (2021 and 2022). Finally, Mr Cormand argues that 20-30% of the ' Green New Deal' should be financed from the EU budget, i.e. between 60 and 90 billion euros per year for 10 years. (Original version in French by Lionel Changeur)