The European Commission warned Monday that there is a risk that not all EU countries will be able to recover from the economic losses of 2020 at the same pace, calling for a “strong joint response” from all 27.
The European Commissioner for Budget and Administration, who was speaking in a video conference as part of European Parliamentary Week, pointed out that although the world “continues to suffer at the hands of the pandemic at a social and economic level”, we can already see “a light at the end of the tunnel in the winter forecasts”, which point to “a resumption of considerable growth in the second half of this year”.
“We expect an overall recovery of the European Union (EU) economy of 3.7% in 2021 and 3.9% in 2022, which means a return to pre-pandemic GDP levels in 2022 sooner than expected,” Johannes Hahn underlined.
However, he warned that “the 2020 losses will not be recovered as quickly or at the same pace across the EU” and it is therefore “essential” that the 27 Member States work together in a “joint and strong European response”.
Johannes Hahn reiterated the European Commission’s call for the approval of the own resources decision, approved last December, recalling that “seven Member States have already ratified it”, including Portugal, which did so at the end of January.
“We count on the commitment of all member states to move forward as quickly as possible in the interest of all EU citizens,” he appealed, noting that the EU bloc can only begin issuing debt after all 27 member states have completed ratification.
In relation to the Recovery and Resilience Plans (RRP), he noted that the EU executive has been “in intensive dialogue with all member states to discuss the preparation of the plans” since last year, which is why he said he believes “this could help ensure that national plans are fully aligned with the objectives”, thus avoiding “undue delays in the disbursement of funds”.
The European Commissioner insisted that the governments of the 27 “should consult stakeholders at national level in the preparation of the plans, including local and regional authorities”, cooperation which “is essential” because the RRPs “are not only about investments, but also about the necessary reforms corresponding to the recommendations of the European semester”.
Following the approval of the own resources decision by all member states, the European Commission foresees “a volume of debt issuances of 150 to 200 billion euros per year until the end of 2026”, which means that “the EU will be one of the largest issuers in the market on a par with sovereign bond issuers such as France, Italy and Germany”, he pointed out.
“Given the frequency and complexity of borrowing volumes”, the European Commission will “apply a diversified fund strategy with the flexibility to react to the evolving market and investor demand”.
He also considered that “to minimise delays similar to those that happened at the beginning of the previous programming period, notably in shared management policies, cohesion policy, agriculture and fisheries policy and migration and asylum, “Member States must be prepared with their programming to use existing possibilities as soon as possible”.
“I encourage everyone to think about all the necessary work and act in a determined way so that we can get through the implementation of all these funding possibilities”, concluded Johannes Hahn, who was speaking at the session on the EU budget at the heart of the recovery plan, as part of the European Parliamentary Week.