Next Generation EU

Today the President of the European Commission Ursula Von Der Leyen presented her plan for the recovery after Coronavirus emergency, which follows the common declarations adopted at the end of March 2020 and at the end of April 2020, with which the members of the European Council (the Geads of State and of the Governments of Member States) had requested the Commission to outline an organisational and fnancial strategy, aimed at fostering the return to normality for our societies, towards a sustainable economy and growth able to include a green transition and the digital transformation.    

The EU has already put in place concrete solutions to immediately respond to the impact of Coronavirus: in this regard, our infographics are avalable here. However, the recovry demands strong policy choices, able to transform the huge challenge of today in a vision for the future of the European Union. Relaunching the economy doesn not imply the retur to the pre-Covid situation, rather it should mean taking a step forward.  

The plan fo the European Commission provides for an update of the next long-term EU budget for 2021-2027 and the Commission’s work programme for 2020. The so-called "firepower" of the EU budget will, according to the Commission proposal, reach €1850 billion. However, all these measures need to pass the scrutiny of the European Council, whose next meeting is scheduled for 19 June.

"Next Generation EU" will be financed by temporarily raising the own resources ceiling to 2,00 % of EU gross national income. This will allow the Commission to use its high credit rating to borrow €750 billion on the financial markets, the repayment of which will be spread in future EU budgets from 2028 to 2058. The financial resources raised by means of the Next Generation EU will be channelled towards Union programmes in the renewed long-term EU budget. The funds raised by Next Generation EU will be structured in three pillars, all focusing on the priority of digital and green innovation.

1. Support to Member States for investments and reforms, which Italy would benefit abundantly of, being one of the hardest-hit countries. The initiatives include a new mechanism for recovery and resilience that will be able to make available loans up to a maximum of 250 billion €. The current cohesion policy programmes will receive 55 billion € more from now up to 2022 under the new REACT-initiativeEU, which will allocate funds according to the seriousness of the socio-economic consequences of the crisis. The Fair Transition Fund, which will accompany Member States towards climate neutrality, and the European Agricultural Fund for Rural Development, which will help rural areas to introduce the required structural changes required by the the Euroepan Green Deal.  

2. Relaunch the EU economy by incentivising private investment, through InvestEU and new instruments for sovibility and strategic investments for a cleaner, digital and resilient economy of the future. 

3. Learning from the health crisis so as to be equipped for the future, through a financial and expertise strengthening of the European Medicines Agency and the European Centre for Disease Control, of a new Eu4health Programme, the Union Civil Protection Mechanism RescEU and Horizon Europe to finance research in the fields of health, resilience and green and digital transition. In addition, in order to provide health assistance to its partners in the world, the Union will allocate an additional €16.5 billion to its external action.

The European Commission has also presented an update of its 2020 Work Programme, in which priority is given to actions needed to drive recovery and help Europe’s resilience. The main innovations concern: 

- the European Green Deal as the basis of the EU Recovery Strategy: real estate and infrastructure restructuring, a circular economy resulting in local employment creation, renewable energies in particular wind, photovoltaic and hydrogen, cleaner transport and logistics, strengthening the Fund for a just transition to support professional retraining.

- Digitisation of the single market: investments for greater and better connectivity, artificial intelligence, cybersecurity, supercomputing, cloud, building an authentic data-based economy, and more cybersecurity.

- A fair and inclusive recovery for all through European integration at the National Integration Funds (SURE), digital skills for all EU citizens through a Skills Agenda for Europe and an Action Plan for Digital Education,fair minimum wages and binding wage transparency measures to help vulnerable workers, intensification of the European Commission’s tax evasion activities to help Member States recover revenue. 

Further passages of Ursula Von Der Leyen’s intervention concerned:

-  The need to respect for fundamental rights and the rule of law during the recovery. In an implicit reference to the Hungarian case, the President pointed out thet any infringment would be monitored and would have to be limited in time and strictly proportionate to the situation. 

-  The Conference on the Future of Europe, which is now being postponed, will have to further consolidate the democratic foundations of the Union through he involvement of the citizens, communities and cities of Europe. 

- International initiatives aimed at a truly global recovery will see the European Union coordinate in a spirit of maximum cooperation with the United Nations, the G20 and the G7, the International Monetary Fund, the World Bank and the International Labour Organisation. The EU will maintain particularly close cooperation with countries in its Eastern and Southern Neighbourhood and with partners in Africa.

Do you want to learn more?  Here's the Public Notice of the European Commission in English.