EU’s Coronavirus Recovery Plan: Repair & Prepare for Next Generation

Written by | Wednesday, June 3rd, 2020

The poll, commissioned by the European Parliament, found that about 58% of Europeans have experienced financial difficulties in their own personal life since the start of the Coronavirus outbreak, including a loss of income (30%), unemployment or partial unemployment (23%), using personal savings sooner than planned (21%), difficulties paying rent, bills or bank loans (14%) as well as difficulties having proper and decent-quality meals (9%). And it is respondents in Italy, Spain, Hungary, Bulgaria and Greece who are most likely to have experienced financial problems, while those in Austria, Denmark, the Netherlands, Sweden and Finland who are least likely to report problems. The poll also found that one in ten people have had to ask family or friends for financial help, while 3% of respondents faced bankruptcy.
Meanwhile, after weeks of laying idle, bars across France are being disinfected ahead of their planned reopening on 2 June. Similar scenes have already played out in parts of Spain and Italy as both countries desperately try to stem the losses of lockdown. Also in the UK and elsewhere in Europe, bars and breweries are nervously eyeing when the beer taps can flow again. But merely serving again will not save an industry worth €55 billion to the EU economy and the source of 2.3 million jobs. First of all, social distancing will likely mean fewer customers at a time when bars need them most. Secondly, bars and restaurants will incur the additional costs of cleaning and adapting premises to keep people apart as much as possible. And if the financial losses from lockdown are added, you have a deadly cocktail that threatens the survival of thousands of bars.
Bank deposits worth tens of billions of euros are surging from Italy to France, as citizens worried about their financial futures put their money away to cope with an uncertain future while the crisis is battering the continent’s economies. But whether citizens stack the cash at home or at the bank, it is yet another sign that confidence across the EU has fallen. The question is if the European Commission President, Ursula von der Leyen, can unite all member states around the €500 billion coronavirus recovery fund plan presented last Wednesday (29 May). The money would be raised by the Commission borrowing on capital markets and would be used to support EU spending through grants rather than loans to national governments. On the one side, Germany and France have joined forces to push for the EU recovery fund, while on the other side, the so-called Frugal Four, namely Austria, Denmark, the Netherlands and Sweden, have just come up with a counter-proposal opposing grants and endorsing a ‘loans for loans’ approach, coupled with reforms. Can they be won over?

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