Rebooting the EU economy after COVID-19: main goals and problems

Rebooting the EU economy after COVID-19: main goals and problems

Rebooting the EU economy after COVID-19: main goals and problems

After months of hibernation caused by the coronavirus, the EU economy is waking up and gaining momentum. But the recovery is not going well.

According to the EU summer forecast, the economy will contract by 8.3% in 2020 and grow by 5.8% in 2021. To spur growth, the EU has come up with a double response: a new EU Next Generation investment plan and a strengthened long-term budget.

EU Next Generation plan and long-term budget Euronews

How do you make the recovery sustainable? Achieving climate and energy targets up to 2030, including reducing greenhouse gas emissions by at least 40%, will require additional investment.

Decarbonizing Europe is more expensive (about 4.6 trillion euros) than the first man on the moon.

What should be the priorities for politicians? What reforms are needed? How will the investment plans be implemented? The Real Economy team attended the Brussels Economic Forum to take the mask off some of the biggest problems in the EU economy, along with European Commissioner Paolo Gentiloni and European Council President Charles Michel.

Sasha Vakulina, euronews:

– The European Union in July developed a recovery plan that still needs to be implemented. Is this enough to give a boost to the economy, and will it happen on time?

Charles Michel, President of the Council of Europe:

– The decision taken in July is a demonstration of strong will at the European level. Because we acted quickly and firmly. Within weeks, we were able to secure the agreement of all 27 heads of state and government to mobilize an unprecedented amount of 1.8 trillion euros over the coming years to fundamentally change our economic and social model with a climate and digital agenda. This will be the foundation of our strategy for the future of Europe.

Paolo Gentiloni, European Economic Commissioner:

– I think this is an extraordinary decision. For the first time, we are creating total debt to support common goals. Of course, this is not the only answer, because we are not a federal state. We have member states with their own solutions. And if we look at the big picture, we will see both national and European reactions. Now, on the general side, we need to coordinate all Member States in line with our shared priorities, in particular the Green Deal, the digital agenda and the sustainability of societies.

Sasha Vakulina, euronews:

– How has the role of the state in the European Union changed now in connection with the restoration fund?

Paolo Gentiloni, European Economic Commissioner:

– Indeed, she has changed. Protecting workers and families now comes first. Just think what would have happened without these public interventions! In any case, the role of the state has been expanded. But we must be sure that the stronger role of the state did not replace the private sector and did not violate the level playing field in our single market, because when you talk about “state intervention” – you understand that countries do not have the same power within our Union … Therefore, we must balance in our overall policy the risk of divergence between Member States.

Charles Michel, President of the Council of Europe:

– I think the COVID-19 crisis showed very clearly that 27 European countries were interested in being more autonomous and strategic independent. And that is why climate and digital ambitions, I think, are our best tools, and they are also very important in order to get the support of Europeans, especially young people.

Sasha Vakulina, euronews:

– Will the European Union be able to become carbon neutral by 2050?

Charles Michel, President of the Council of Europe:

– I am convinced that there is more determination now than ever. Because over the past few months, it has become clear that the climate agenda is not something of a secondary concern. This is something vital. It is vital to keep moving forward.

Paolo Gentiloni, European Economic Commissioner:

“I think the pandemic was also an opportunity for forced training – if we want to – both for our new digital tools and the importance of the environment and climate. In the meantime, I believe that we must firmly move towards the green deal more persistently than before. We need two things. Firstly, it is promoting public investment, and secondly, we need to coordinate all national recovery and resilience plans to achieve a green deal.

Sasha Vakulina, euronews:

– What is your forecast for 2021? And do you think the EU has any other options left if it is needed?

Paolo Gentiloni, European Economic Commissioner:

– Variants are often created by events. At this point, I think our main goal is to try to build confidence and deal with uncertainty. We are not in the second wave of a pandemic, but we have several local outbreaks. And this creates the risk of new uncertainty. So our economic recovery is in full swing, but to pick up speed we need to have more confidence. So the European package is absolutely necessary not only from an economic point of view, but, I would say, from a psychological point of view. Yes, we have a European package, so we can be sure that no member state is left alone and we can recover together. This is a powerful signal from Europe.

Annual real GDP growth by EU countries Euronews

Charles Michel, President of the Council of Europe:

– For many years we have considered the growth of domestic product as a development criterion. The change in GDP from the previous year was often considered the only criterion. I am opening another discussion. If we want Europe to be protected and caring, if we want Europe to be ambitious about improving the daily life of 450 million Europeans, we need different criteria. Let's work with EU member states, with economists, to find ways to better measure the quality of education, simplify access to health care, and eliminate discrimination. We need different criteria, because the strength of Europe is based on the idea of values and human rights; respect for everyone should be at the forefront. And if this is so, we will see that the GDP criterion is not enough for our decisions to bring positive results.

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