The reason? A former German economics professor, Bernd Lucke, has challenged the financial package at the Constitutional Court, and the Constitutional Court has issued an order banning German President Frank-Walter Steinmeier from ratifying the package until a solution is reached. If Lucke’s action is allowed, the recovery plan will be postponed for at least a year or, in the darkest scenario, will be canceled. Romania would benefit from almost 30 billion euros from this fund. Bernd Lucke insists that through his action he is actually doing the European Union a favor, writes Politico. He says the loan the Union will make for member states would be tantamount to pooling debt risk, turning the EU into a debt union. Worse, if a state goes into default, they will all pay. How real is this danger and what will happen if the recovery plan “dies” in Germany? Economics professor Mircea Coșea tells RFI that, theoretically, the European Union risks paying instead of the Member States that will fail and will not be able to pay their loan. At present, there is no clause to consider what will happen if one of the Member States becomes insolvent. Basically, Professor Mircea Coșea believes that the process of approving the National Resilience and Recovery Plans would be extremely tough in itself just to get the constraints of a “contract”. Also, in such a negative scenario, the European Union will find the mechanisms to directly hold the guilty states accountable and not place their debt on others, especially since – the analyst points out – no European is willing to pay the recklessness of others. So, somehow the problem is solved and the European Union, covered, in the scenario described by Bernd Lucke.
But if it wins the case, will the ratification process stall in Germany and the European Union plan automatically fail? For large countries, such as Germany, it would not be serious. For countries whose economic growth depends largely on this money, such as Romania, it would be a tragedy. But listen in full to the argument of Professor Mircea Coșea…
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