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MEPs call for stronger financial outlay and quick action to avoid huge recession

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European Members of Parliament welcomed the recent proposal for a €500 billion recovery fund brought forward earlier this week  by French President Emmanuel Macron and German Chancellor Angela Merkel, calling for decisive actions at the earliest possible in a bid to avoid that the economic fallout having significant social repercussions.

During a Webinar organised yesterday afternoon by the European Parliament on the EU’s long term budget and recovery plan, MEPs insisted that real solidarity was needed and called for an end of bickering between Member States on the financial package and to focus on the immediate and long-term needs of the bloc. The President of the European Commission, Ursula von der Leyen is expected to present the revised Multiannual Financial Framework (MFF) and recovery plan proposals and hold a debate in plenary session on the afternoon of Wednesday 27 May.

Johan Van Overtveldt the Chair of the Committee on Budgets, argued that the current economic situation might be getting out of hand and demanded quick action: “COVID-19 is still is a major health crisis, and we realise that, slowly but surely, it is transforming into a huge recession. In the coming days and weeks, we have to work out how to reconcile solidarity with responsibility. He warned that if through the collective efforts of the Union and Member States “we don’t stop the recession in its tracks as soon as possible, we might be confronted with what I define as a new financial hurricane.”

José Manuel Fernandes, from the centre-right EPP, said that the French-German initiative is a “step in the right direction” and underlined that the recovery fund is needed immediately, as the MFF will not be in place before 2021. On member states’ reticence until now to agree on a robust long-term budget, the MEP insisted that the EU needs a stronger and more flexible budget to respond to urgencies and unforeseen circumstances. The budget must be based on the principles of solidarity and cohesion, ensuring that no one is left behind.

Socialist MEP Margarida Marques insisted that the recovery fund must be anchored to the MFF. She argued that the current Commission proposal for an EU budget is still not enough and insisted the Member States should be looking at allocating between 2 to 2.5% of their GNI to a common pool. This would be more than double the current amount. She insisted that significant resources are required to provide the real catalyser for the recovery and transformation that the Union needs in these unprecedented times. She described the French-German proposal presented earlier this week as an important step forward. The three main priorities now are to “repair the internal market in the wake of state aid measures, set up the economic and social recovery plan and, thirdly, increase the EU’s resilience.”

MEP Valérie Hayer, co-rapporteur for the EU’s Own Resources, recalled that according to the Commission’s own forecast the region is looking at a drop in GDP of 7.5%, equivalent to  a trillion euro. In this context, the EP is asking for a plan worth double that amount, including loans but mostly grants.

MEP Luis Garicano (pictured above), called for a compromise solution where taxes were raised from an area (such as digital tax) which has so far been unexploited, keeping in consideration the limited abiltiy of EU states to collect certain type of revenue.

CDE news

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