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EU Parliament calls for massive €2trn recovery package

Modern city skyline and businessperson.

Last week Friday, MEPs called on the Commission to deliver a €2trn recovery package to tackle the covid-19 crisis.

It should be focused on citizens’ needs but also prioritise the Green Deal and the digital agenda.

In a resolution, which was adopted by a large majority of 505 votes in favour, 119 against and 69 abstentions, the European Parliament said that a post-2020 EU budget revision must put European citizens “at the heart of the recovery strategy”.

The parliament said that the “recovery and transformation fund” should be €2trn in size, financed “through the issuance of long-dated recovery bonds” and “disbursed through loans and, mostly, through grants, direct payments for investment and equity”.

MEPs warned that the recovery plan must be provided in addition to the next Multiannual Financial Framework (MFF), which is the EU’s long-term budget, and not undermine existing and upcoming EU programmes.

The current long-term EU budget runs out on 31 December 2020.

The recovery package must “transform our economies” by supporting small and medium-sized enterprises, and “increase job opportunities and skills to mitigate the impact of the crisis on workers, consumers and families”, MEPs said.

They urged the Commission not to use “dubious multipliers to advertise ambitious figures”, and not resort to “financial wizardry”, as the EU’s credibility is at stake.

Parliament must also be fully involved “in the shaping, adoption and implementation of the recovery fund”.

Sources of finance

To meet the EU budget plan, MEPs reiterated their call for a basket of “own resources” and not further increase the direct contributions by member states.

Among the list of potential own resources are: 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.

The Commission is expected to put forward a proposal on the package on 27 May.

“With their resolution, MEPs have echoed the calls by over one million people and 100 environmental NGOs across Europe for the biggest green investment plan the world has ever seen,” said Ester Asin, director of the WWF European Policy Office.

“We’re now counting on the European Commission to follow through with its promises to present an EU recovery package which puts the objectives of the European Green Deal at its heart.”

The news was followed by French president Emmanuel Macron and German chancellor Angela Merkel presenting a joint plan to spur EU recovery from the coronavirus crisis on Monday.

Elena Johansson

Senior Reporter

Part of the Mark Allen Group.