The four largest economies in the euro area - Germany, Spain, France and Italy - will submit their national recovery plans simultaneously, on Wednesday 28 April, as part of the Next Generation EU Recovery Plan, German Finance Minister Olaf Scholz and French Finance Minister Bruno Le Maire announced at a joint press conference the day before.
“Germany is successful only if Europe is successful too”, Mr Scholz said.
With an overall budget of €28 billion, of which €25.6 billion comes from European subsidies, the German recovery plan will devote “90%” of its expenditure to climate protection and digital transformation. “This goes far beyond the EU’s ambitious targets” for green and digital transitions under the European Recovery Plan, Mr Scholz argued.
Thus, more than 50% of the total envelope (more than €14 billion) will contribute to the digital transformation (digitalisation of infrastructures, education system) while 40% (€11.5 billion) will be used to finance the climate transition (hydrogen economy, sustainable mobility, energy renovation).
According to estimates by the German Institute for Economic Research, the planned measures will generate additional growth of around 2% of national GDP.
On the French side, the national plan ‘France Relance’, which makes green transition, competitiveness and social and territorial cohesion its major pillars (see EUROPE 12546/11), will be financed to the tune of €100 billion, 40 billion of which through Next Generation EU. Mr Le Maire said he hoped that a first tranche of European subsidies, amounting to €5.1 billion, would be paid before the end of the summer.
“The priority is to invest massively, not to consolidate public finances. (...) We'll come back to sound public finances as soon as the crisis is behind us.”, the French Minister stressed. He also underlined the introduction in France of a multi-annual public finance management framework with an expenditure rule.
Other structural reforms highlighted were unemployment insurance and a framework law on climate.
Both Mr Scholz and Mr Le Maire strongly disagreed with criticism that the recovery in Europe was not on a par with that initiated by US President Joe Biden. This comparison is “unfair”, retorted the French minister, for whom it is also necessary to take into account social policies, which are “stronger in Europe”, as well as other safety nets put in place at European level at the outbreak of the Covid-19 pandemic for workers (SURE instrument), companies (EIB guarantee fund) and States (ESM credit line).
See the German recovery plan: https://bit.ly/3sUWGYx
See the French recovery plan (in French): https://bit.ly/3sQdX52
More information on the Italian recovery plan: See EUROPE 12706/13.
More information on the Spanish recovery plan: https://bit.ly/2S7IQW1 (Original version in French by Mathieu Bion)