On Friday 15 May, the European Parliament called for a €2 trillion recovery plan to take the European Union out of the crisis, as part of a Multiannual Financial Framework (MFF) 2021-2027 “revised upwards and including new own resources” (see EUROPE 12485/20).
On the same day, the European Commission announced that it is expected to adopt, on Wednesday 27 May, its proposals on the Covid-19 post-pandemic recovery plan and the revised EU MFF for 2021-2027 (see EUROPE 12486/2). A mini-plenary session of the European Parliament is due to take place on 27 May to give MEPs an opportunity to react to the proposals.
By adopting (505 votes in favour, 119 against and 69 abstentions) a joint resolution by the EPP, S&D, Renew Europe, Greens/EFA and ECR groups (all amendments tabled by the GUE/NGL group were rejected), the Parliament calls on the Commission to present a stimulus package. It says the Recovery and Transformation Fund should be financed “through the issuance of long-dated recovery bonds guaranteed by the EU budget”. For the European Parliament, this €2 trillion recovery plan and its duration should depend on the expected scale and duration of the impact of the current crisis.
According to the Greens/EFA group, “the plan should include at least €1 trillion in subsidies”.
This package should take the form of loans and, “mostly, through grants, direct payments for investment and equity”. This Fund should be directly administered by the Commission.
The Parliament insists that the Recovery and Transformation fund “must be financed in addition to the Union's current and future policies” and that it “must not affect our long-term priorities or strategic objectives or result in a reduction in the MFF”.
A strong MFF. The Parliament demands that the revised proposal for the MFF 2021-2027 drawn up by the Commission should “calculate the new Recovery and Transformation Fund on top of the next MFF”. It notes that frontloading of resources can help mitigate the immediate effects of the crisis, especially in cohesion policy. But MEPs also warn that excessive frontloading will result in a weakened budget.
MEPs call for investments in the European Green Deal and the Digital Agenda to be prioritised and insist on the creation of a new European Health Programme.
Own resources. The Parliament calls on EU leaders and the Commission to take “bold” decisions regarding the reform of the EU's own resources system, including the introduction of a “basket of new own resources”: a common consolidated corporate tax base, digital services taxation, a financial transaction tax, income from the emissions trading scheme, a plastics contribution and a carbon border adjustment mechanism.
MEPs reiterate their position in favour of the abolition of all rebates and corrections.
MEPs call for an immediate and permanent increase in the Own Resources ceiling in order to meet the needs of the MFF and the Recovery and Transformation Fund and factor in the anticipated GNI drop after the recession induced by the crisis.
The importance of Article 324. European Parliament President David Sassoli told a press conference that “this recovery plan will be linked to the MFF, but not at its expense”. “We need new money, used to finance the issuance of bonds in the capital markets”, he added. The aim is to get “all EU countries” back on the road to economic recovery. For him, the new own resources must also be increased.
“Resources must be made available quickly”, warned the European Parliament President. The majority in the Parliament is larger this time than in April, “which gives me hope that the European Parliament will play an important role” in this recovery plan. Mr Sassoli called on the Commission to activate Article 324 of the EU Treaties. This legal basis will allow the Conference of Presidents of the European Parliament political groups (CoP) to have a say in the negotiations on the recovery plan and “avoid creating budgetary instruments in which Parliament does not participate and which therefore escape democratic control”, explains the resolution.
“The adoption of this resolution by such an overwhelming majority sends a powerful message to the EU Council and the Commission that the European Parliament is back at the negotiating table. This broad consensus clearly shows the level of ambition that the European Parliament expects from the proposals to be presented by the Commission in the coming days”, said the president of the Renew Europe group, Romanian Dacian Cioloș.
“Our group welcomes the support of the majority in the European Parliament for EU investment that will enable us to achieve our climate goals, protect biodiversity and address economic and social inequalities”, commented the Greens/EFA group.
The GUE/NGL Group criticised the plan's lack of ambition. “We specifically asked for a European Recovery Fund of at least €1.5 trillion, financed by zero interest perpetual bonds, with grants and not loans, without any macroeconomic or other conditionality”, explained the Greek, Dimitris Papadimoulis. He called for a “much more ambitious" MFF, with increased funding for cohesion, climate, employment and health. (Original version in French by Lionel Changeur)