What recovery plan for the euro zone after the coronavirus crisis? (drawing) – ROBIN UTRECHT / SIPA
How to get out of the crisis ? This Thursday, the European Commission was commissioned by the 27 leaders of
the EU prepare a plan to end the crisis. This should include a budget proposal for the period 2021-2027, including a fund to revive the economy after the pandemic of
coronavirus, according to concordant sources. According to the President of the Commission,
Ursula von der Leyen, it should be presented in “the second or third week of May”. This summit, which lasted less than five hours, was a first round table.
French President Emmanuel Macron admitted on Thursday that there was “no consensus” among EU countries on transfers to “the regions and sectors” most affected by the new coronavirus crisis. Italy and Spain, which have suffered the most from the pandemic, demand more solidarity from the countries of the North.
At the start of this video conference, the President of the ECB, Christine Lagarde, had warned the 27 European leaders against the risk of “acting too little, too late” in the face of the economic consequences of the pandemic, according to a source. close to the discussions.
Amount, terms? Extremely difficult consensus
This plan must give the Old Continent the means to emerge from the worst recession that has been threatening the EU since the beginning of its history, according to concordant sources. This recovery plan for the European economy is expected to reach several hundred billion euros, in the opinion of all. But on its exact amount as on its modalities, a consensus will be extremely difficult.
Member States and institutions have competed in imagination in recent weeks to each offer their solution. But the debate has above all brought to light the old rifts, already present after the financial crisis of 2009. The countries of the South, greatly mourning the pandemic, are demanding more financial solidarity from their neighbors to the North. But the latter, in particular Germany and the Netherlands, less affected by the virus, balk at paying for States to which they reproach their budgetary indiscipline during the years of growth.
North / South divide
German Chancellor Angela Merkel pledged “in a spirit of solidarity” on Thursday “much greater contributions” from her country to the EU budget over “a limited period”. But it has once again ruled out any pooling of national debts, demanded, in various forms, by Madrid, Rome – which has since moderated its expectations – and Paris, which has often been summed up by the term “coronabonds”.
The advantage of pooling debts for the countries of southern Europe is to benefit from the low interest rates of the countries of the north, in order to finance the post-crisis. Eurogroup President Mario Centeno pleaded Thursday for a stimulus fund “proportional to the costs of the crisis”, “funded by the EU budget” and which guarantees “solidarity with the most affected member states”. And therefore, would prevent a break-up of the euro zone (19 countries). This long-term budget must in principle be adopted by the end of the year, but it also divides the Member States there, according to the same North / South divide.
Probable worst eurozone crisis
The pandemic has hit economies hard: the EU, whose populations are confined to most countries, is expected to record a record 7.1% drop in GDP this year, according to IMF forecasts. And the crisis that threatens the 19 euro area countries risks being the worst in the short history of the single currency launched in 1999.
Markit cabinet announced on Thursday an “unprecedented” collapse of private sector activity in the euro area in April, as a result of measures taken to stem the epidemic.
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