President von der Leyen presents Recovery Plan to European Parliament
In a speech delivered at the plenary session of the European Parliament in Brussels yesterday, European Commission President Ursula von der Leyen presented the structure and the main features of the Recovery Plan in which the Commission is currently working.
Noting that ‘Europe will recover but it will take time’ and that the national response to the coronavirus outbreak, whilst necessary and useful, has started to affect the level playing field of the internal market, President von der Leyen stressed the need for the EU to push for investment and reform and to strengthen the economy by focusing on the EU common priorities and supporting those most in need.
The Commission President announced that the Recovery Package will consist of two parts, namely the European budget (the MFF) and a recovery instrument funded through a larger headroom. This headroom will fix the maximum amount of money that the Commission can borrow on the capital markets with the guarantee of the Member States. The recovery instrument, which is short-term and concentrates on the first years of recovery, will complement the three key safety nets already in place, namely the SURE programme, the finance available from the European Investment Bank, and the European Stability Mechanism.
The entirety of the recovery funds will be channelled through EU programmes, and it will be spent across three pillars:
- The first will focus on supporting Member States to recover, repair and come out stronger from the crisis. It will take the form of a new Recovery and Resilience tool, created to fund key public investment and reforms in line with the objective of the twin transition to a climate-neutral and a digitalised and resilient Europe. This will be done within the European Semester and will be available to all Member States, whether in the euro area or not, focusing on those parts of the EU that have been most affected and where resilience needs are the greatest.
- The second will focus on kick-starting the economy and helping private investment to get moving again. To achieve this goal, the Commission purports to create a new Strategic Investment Facility, which will support private investment in key value chains crucial for future resilience and strategic autonomy, such as the pharmaceutical sector. Additionally, a new Solvency Instrument will be put in place with the aim to meet the recapitalisation needs of healthy companies who have been put at risk as a result of the lockdown.
- The third will focus on other needs arising from the outbreak. In this regard, the Commission will strengthen programmes that have proven their value in the crisis, such as RescEU or Horizon Europe. It will also create a new, dedicated Health Programme, as well as strengthen the instruments for Neighbourhood, Development and International Cooperation and for pre-accession assistance.
President von der Leyen called on the European Parliament to play its full role in the adoption of the Recovery Package in its entirety, as well as in providing the necessary democratic accountability through its implementation.
The speech is available here.