Week of 25 May 2020
The European Green Deal is placed at the heart of the EU’s recovery strategy, with a European Commission-proposed €1.85 trillion budget to lay the cornerstone for a climate neutral, digital and resilient EU
On 27 May, the European Commission proposed a revamped long-term EU budget, boosted by an emergency temporary recovery instrument called Next Generation EU. The stated objective is to help repair the immediate economic and social damage brought by the coronavirus pandemic, kickstart the recovery and prepare for a better future for the next generation. This budget responds to the European Council’s request (made in March) that the European Commission develop a comprehensive recovery plan. The proposed recovery plan is subject to approval by the EU Council and Parliament.
The amount of €750 billion for the emergency temporary recovery instrument, Next Generation EU, will be raised by temporarily lifting the ceiling on borrowing (the own resources ceiling) to allow the European Commission to use its strong credit rating to borrow money on the financial markets. This will be combined with targeted reinforcements to the long-term EU budget for 2021-2027. This will bring the total financial firepower of the EU budget to €1.85 trillion.
The money raised for Next Generation EU will be channelled through EU programmes in the revamped long-term EU budget. The money will be invested across three pillars:
- Supporting Member States with investments and reforms (including in relation to green and digital transitions, accelerating the transition towards climate neutrality and supporting rural areas to make the structural changes necessary for the European Green Deal and new biodiversity and Farm to Fork strategies)
- Kick-starting the EU economy by incentivising private investments (including solvency support to prepare companies for a cleaner, digital and resilient future and boosting the resilience of strategic sectors, notably those linked to the green and digital transition)
- Addressing the lessons of the crisis (including strengthening health security and funding research in health, resilience and the green and digital transitions)
The European Commission makes clear that there are three policy fundamentals of the recovery:
- Green: The European Green Deal is positioned at the heart of the EU’s recovery strategy, and includes a massive renovation wave of buildings and infrastructure and a more circular economy; bringing local jobs; rolling out renewable energy projects; cleaner transport and logistics; and supporting re-skilling
- Digital: This is about investing in more and better connectivity; building a stronger industrial and technological presence in strategic sectors; building a real data economy; and increasing cyber resilience
- Resilient: This is about supporting a fair and inclusive recovery for all, including supporting workers, ensuring digital skills, ensuring fair minimum wages and binding pay transparency measures for vulnerable workers (women in particular) and fighting against tax evasion
If you are making the case for a greener, fairer and more inclusive recovery in your organisation (or simply trying to explain the importance of build back better to a family member!), this piece we put together with Anna Turrell might help: A sustainable post COVID-19 economic recovery: how the facts show us there is no other option