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A New story for Europe – solidarity in times of hardship

Frédéric Billet, ambassadeur de France, Rolf Nikel, ambassadeur d’Allemagne, Marek Prawda, directeur de la Représentaion de la Commission europeenne en Pologne.

The Union was conceived by a generation, who witnessed our continent’s atrocious past. Putting nationalism and totalitarian ideologies, which have destroyed Europe twice in the 20. Century, behind us was and to a certain extent still is the order of the day. Now it’s for the younger generation to develop our common project further. Changes and progress have often been triggered by unexpected events and unique challenges. Therefore, the current crisis, despite its many hardships and challenges may also be a chance.

European integration has been driven largely by the economy. And it has been hugely successful bringing to all of us unprecedented levels of prosperity. The method of reconciling nation states’ divergent economic interests proposed 70 years ago by French minister of foreign affairs Robert Schuman proved very effective. Schuman’s dream came true : Europe was forming gradually, building real solidarity step by step.

Solidarity of course has a very special meaning in Poland. It is this movement that has enormously contributed to bring freedom to Central and Eastern Europe and eventually led to Poland’s EU-membership. Its EU accession broke the curse of Poland’s geopolitical location and helped to bring about an incredibly successful economic modernisation and prosperity of which all Poles can feel proud about.

We have gotten used to the promise of a better future. We took it for granted that tomorrow could only be a better version of today. All it took to describe the European integration was a technocratic language and the – sometimes naïve – belief in the power of regulations and procedures. The Euro and migration crises fuelled pessimism which gained traction in our societies No wonder, then, that “regaining the future” was a top priority for the new Commission, who began its work in late 2019.

And now all of a sudden, we have to face an unprecedented challenge : A virus, soon to be declared a pandemic put our health systems under enormous pressure and forced societies into lockdowns with very serious economic consequences. The pandemic caught us by surprise and in the beginning we struggled in a rather uncoordinated way. The Union did its best considering the scope of competence conferred to it by the Member States. It released unused funds, reached for its rainy-day resources, simplified spending procedures, arranged for collective purchases and inventories of personal protective equipment and repatriation flights for EU citizens, funded research to develop vaccine and tests.

Means on an even larger scale will come into play when the new economic facilities are launched, including the most important and vividly discussed Recovery Plan designed as a generous addition to the multiannual financial framework for 2021-27. Until recently, the debate was focused on how to change priorities and shift funds within the upcoming seven-year budget to better stimulate recovery from the crisis, whose scale and consequences are still inconceivable. Can we afford, for instance, in the times of a pandemic to implement the Green Deal ? Can we reach other ambitious and costly goals, on which we decided under completely different circumstances ?

We realize, that some countries have been hit particularly hard by the pandemic. And this extraordinary situation calls for extraordinary actions. Thus, two decisions were rapidly taken : first, the previous ambitious MFF (Multiannual Financial Framework) modernisation goals like our climate or digital objectives should remain valid and be at the heart of our recovery by using the planned spending to make the necessary changes right away. Second, we should establish a new fund to enable the European economy to recover after the crisis. This is how the idea was born to increase the 1trillion-plus budget by additional €750 billion as an EU Recovery Plan.

Paris and Berlin were first to respond to the call of EU-Commission President Ursula von der Leyen who highlighted the existential dimension of today’s challenge - possibly the most important stress test in the history of the European project. The French-German proposal was to set up a fund of €500 billion raised by the European Commission through the issuance of bonds and made available to members states in the form of grants. Establishing that instrument would imply the crossing of a significant mental frontier – up to date the Union has never incurred common debts.

In addition, the European Commission decided that the extraordinary situation required two further steps. First, the Commission proposed long-term bonds totalling €750 billion to be made available to Member States under the Recovery Plan : in two-thirds as grants and in one-third as long-term low-rate loans. Second, it presented a revolutionary way of obtaining funds that will enable the Commission to gradually repay the loans without burdening Member States’ national budgets. The new sources of income will go directly to the EU budget.

These could include corporate tax from companies operating on the EU market, income from emissions generated outside the EU in production of goods subsequently imported to the UE, expansion of the EU CO2 emissions trading scheme to include aviation and sea transport and, finally, taxes on digital services. If those new measures are adopted, the EU budget will grow substantially and the Member States will still have their final say on how to spend it. In the future, the new income of the EU can help to alleviate the recurrent debates between net payers and net recipients. Consequently, some (also for Poland) significant policies, such as the agriculture and cohesion funds, will not fall prey to the pandemic, but could even be increased.

What we are witnessing today is an unprecedented manifestation of European solidarity. Europe is about to write a new story for the 21st century. By mastering the corona-crisis in solidarity we can prove that common efforts are the most effective way of dealing with such challenges and adversities. In doing this we also set an example for the broader discussion on multilateralism worldwide. And we can prove that high living standards and climate protection can go hand in hand. Rather than simply managing our fears – which some find attractive in times of crisis -– we opt for bold and courageous crisis management. Rather than playing nation states against the Union’s institutions, we emphasize that the Union is a winning team. Either we win together or we lose together. Only if we follow the first path we will prosper. But we have to act fast.

The Recovery Plan must be highly effective in contributing to the recovery of Europe’s economy, which means it must be agreed upon as soon as possible. The EU has to deliver promptly on this matter : we cannot afford to lose time with endless negotiations, which could undermine our common objective to save jobs and companies. To all those who lament the EU’s alleged shortcomings we respond : The Union can only be as strong and effective as member states permit. Now we have the unique chance of writing a new story for Europe : A story of solidarity that will lead all of us out of this crisis stronger than we went in.

Cet article est paru dans le journal « Dziennik Gazeta Prawna » : https://biznes.gazetaprawna.pl/artykuly/1483776,plan-odbudowy-odrodzenie-sie-gospodarki-solidarnosc-w-trudnych-czasach.html

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