Economy: Europe speeds up

The crisis seems to have strengthened European integration. With EU support, the pandemic isn’t behind us yet, but the economy is resuming at full speed. According to the latest growth forecast for Brussels released in February, you can even recover all the ground you lost during the storm. After a 5.3% recovery in 2021, the economy of the Old World should show a growth rate of 4% in 2022 and 2.8% in 2023. And all member states should have been able to return to pre-crisis by the end of the year. .. The resurrection of the wheel hat, which the European Commission believes is due to the coordination of success and recovery of the vaccination campaign. “”Unemployment reaches historically low levelsSays Valdis Dombrovsky, Vice Chairman of the Economy, who works for the people. The pandemic isn’t over yet, so the immediate challenge we face is to get the recovery on track.“”

Historical agreement

In addition to managing health factors, 27 EU countries agreed on a major recovery plan of € 750 billion in July 2020. that is “European historic day!“In the process, I tweeted Emmanuel Macron. The real tour deforce when differences between the United States caused fear of trading at discounted prices. Finally, the roadmap called NextGeneration EU is 390 billion. Offering Euro Grants and Payments of 360 Billion Euro Initially, Brussels wanted more aid in the form of grants ($ 500 billion), but so-called modest countries (Netherlands, Sweden, Denmark, We had to find a compromise in order to get Finland to join Austria), threatening the agreement without rebalancing in this regard.

“The Next Generation EU is a symbol of what is possible when Europe gathers around a common vision for a better future.”

The program targets the most affected states of the health crisis and aims to facilitate investment in ecosystems and digital transitions. For example, France, which receives a total of 39.4 billion euros, was verified by the Commission in July 2021. It plans to allocate 46% of the total envelope for measures to support the target climate change and 21% for digital migration. .. “”NextGenerationEU symbolizes what is possible when Europe gathers around a common vision for a better future“The response was triggered by Commission Chairman Ursula von der Leyen, who worked hard to ensure that countries found an ambitious agreement.

Ordinary loan

In addition to the amount agreed by the ruler, one of the strengths of this transaction is that it recorded the development of a specific loan pool and new unique resources. The issue of funding pools was raised during the sovereign debt crisis. During this period, the debt of southern countries saw a sharp rise in borrowing rates in the market. At that time, Germany in particular refused to pool funds and did not want to pay to the least managed states. Now there has been a big step forward.

Regarding new and unique resources, the Commission is working specifically on emissions trading systems, carbon border coordination mechanisms, and the reallocation of interests of multinational corporations. Some lament the lack of ambition in these respects. This is the case with Michel Barnier, a former European Financial Markets Commissioner.We talked about digital taxes that no longer exist today and are being replaced by a 15% tax on large corporations. It raised $ 7-14 billion a year, but will eventually reach € 800 million a year.“Despite the disappointment that the plan can cause, Valérie Pécrès’s adviser recognizes that the establishment of such a plan was unimaginable a few years ago.

Real success

Incentives have also been successful in attracting investors. The market shows confidence in the European Union. Evidence of this is specified in a report issued in February that when Europe requested them to fund the program, the subscription request exceeded the capacity of the purchase order 7-14 times. I am. This allowed Brussels to close its Next Generation EU business in 2021, with an average funding cost of less than 0.14% for € 71 billion. A low rate that would not have been admitted if many member states existed alone in the market.

Such a plan could not have been imagined a few years ago.

This report “Confirm the unprecedented success of your funding programComment Johanneshan, Commissioner for Budget and Management. This success has a positive effect on the member countries receiving grants and loans and shows what European solidarity can achieve.“The Commission is also pleased to announce the amount to the country within 6 business days after completing the necessary legal proceedings. From a recovery plan perspective, too small vitality is not criticized. The time required to find a consensus was actually very quick when you knew the difficulty of placing everything properly. The world around the table. The transaction execution is also quick. The aim is to be a successful bet so far.

Everything is not so rosy

Talks between rulers showed a difference in the notion of what EU control should be. Funding is subject to respect for the rule of law. The rule of law seems to be forgotten in some countries, such as Hungary and Poland, on topics such as justice and the media. Inconsistencies with budget legitimacy rules related to the ratio of debt to deficit to GDP raise the issue of reviewing the economic concept framework. Not to mention the rise of certain sovereign powers and the fear of using funds. But in reality, Europe was able to find a unique, efficient and swift midpoint when the crisis was intensifying. She showed that she could react depending on the situation. Better integration, more protective Europe may probably make people who are sometimes burned by EU regulations want to believe their union a little more.

Olivia Vinho