The economic shock is serious and it has lasting effects. In all European capitals, the consequences of the Ukrainian conflict are putting pressure on the government. This includes helping sectors affected by the sanctions imposed on Russia and dealing with rising energy and commodity prices. Thus, the economic resilience plan was announced by Emmanuel Macron of France, the terms of which are under discussion. The same is true in Spain.
However, all Member States have been affected, and the idea of coordinating these responses is rapidly taking hold in Brussels, creating potentially anti-competitive new state aid (committee next week). A regulatory framework needs to be set). And above all, with the same logic as the European recovery plan decided in July 2020 to deal with the Covid crisis to pool them. As “Le Monde” showed this weekend, there is a new general loan at the discussion table.
Some states are at greater risk than others, and not all states have the same resources to deal with it. Therefore, the idea of joint response. This time, Eastern European countries will be the main beneficiaries. But Italy, which relies heavily on Russia’s gas and has exposed banks, is once again emerging as one of the weakest ties. Germany (10-year interest rates are negative again) was impressed by the announcement of a € 100 billion investment fund to strengthen military resources.
Freezing budget rules and investment plans
Therefore, beyond the support of the ECB, the use of budget weapons is envisioned again in Brussels. “It is appropriate to act on three levels, MEP Pascal Canfin argues. First, admit that the budgetary emergency has been extended for at least a year. Second, the cost of welcoming refugees. By providing European assistance directly related to the conflict, such as. Finally, by recreating a common means of financing the necessary additional investment. »»
Brussels envisions a new one-year freeze (2023) on the rules of the Fiscal Stability Agreement. It will give countries more freedom to implement costly compensation mechanisms against rising energy prices.
The outlook for new joint debt is more ambitious. “We are just the beginning of the debate, but there should be a political consensus on the need to release additional common means in the three areas of energy, defense and food,” said the French Secretary of State for Europe. Echoes “emphasize. Clement Beaune, who advocates a European plan for “autonomy and resilience.”
Investing in energy self-sufficiency
Emmanuel Macron has been maneuvering for several days with Ursula von der Leyen. Brussels needs to make its first technical proposal before the informal summit in Versailles on Thursday and Friday.
Many questions arise. Do you need a second plan with new mutual funding, or can you act within the framework of a next-generation plan (redirect funding, extend maturity beyond 2026, or already plan refinancing? Or by increasing the envelope)? “There is a will to make political decisions in Versailles,” says Judge Pascal Canfin. The important thing is to go fast. “
The € 750 billion recovery plan, including part of the € 390 billion subsidy, is intended to be used between 2021 and 2023, thanks to new proprietary resources (such as carbon taxes at the border) in 2026. You need to start repayment from the year. .. A year ago, Emmanuel Macron stated that it needed to be “completed” (especially with regard to the Biden project). Paris then silenced this claim and realized that it was first necessary to prove that the country persuaded the so-called “simple” country.
Less than 2020
Ukraine’s crisis is a game changer. “I can’t wait to evaluate the national plan and introduce its own resources,” emphasizes a person close to the debate. Scandinavian and Eastern European countries are reluctant to borrow again and find themselves at the forefront of the Ukrainian crisis and therefore need to be more reconciled. Paris is also betting on greater openness from the Netherlands-Prime Minister Mark Rutte will meet Emmanuel Macron in Paris this Wednesday. Although not explicitly stated yet, the position of the German coalition remains.
If the exact amount is not advanced at this point, there is no doubt that it will be as large as 2020. Some sources evoke a scale of 100 billion euros. But everything depends on the expected investment project.