The President of the European Council, Charles Michel, wants EU leaders to discuss the socio-economic response to the energy crisis caused by Russia’s armed aggression against Ukraine at the EU summit on Thursday 20 and Friday 21 October in Brussels. The question of developing “common European solutions” was raised.
“Our economic outlook will depend, to a large extent, on how we manage our energy crisis. As a corollary to our energy discussion, I would like us to also focus on coordinating our economic policy response effectively including with the support of common European solutions”, said Mr Michel, in his invitation letter to the summit.
The question of new European debt to help households and businesses cope with soaring prices and invest in the climate transition is dividing Member States.
Some leaders are calling for a new European solidarity initiative along the lines of the SURE initiative to support national short-time working schemes, while others point to the fact that the money available through the Next Generation EU Recovery Plan is far from being spent, an EU source said on Wednesday 19 October.
Those in favour of a new European financial instrument, such as France, Spain or Italy, argue that not all Member States have the same room for manoeuvre to support their economies and that such a difference in capacity to act is likely to call into question the integrity of the internal market.
Dated Tuesday 18 October, the latest draft conclusions of the European Council state that “all relevant instruments at national and European level should be mobilised”, while bearing in mind the need to “preserve the integrity of the EU Internal Market”.
The European Commission is expected to present soon a revised framework for State aid.
While it is legitimate to find solutions for households and companies, the question raised is that of the “distorting effects” linked to different capacities for action and such a situation justifies a discussion on the means available to help countries in need, said the French president’s entourage at the Elysée Palace.
On the German side, an intense discussion is expected between the EU27. The German authorities advocate making the most of the capacities of Next Generation EU, an instrument that is considered to be flexible, and argue that discussions on a new instrument would be long and tedious.
This position is shared by fiscally frugal countries such as Finland, Sweden and the Netherlands. For the Dutch authorities, only after the unused funds have been used up can options be considered for assisting a country in need of further assistance.
See the draft conclusions of the European Council dated 18 October: https://aeur.eu/f/3oj (Original version in French by Mathieu Bion with the editorial staff)