Europe's recovery needs solidarity and smart spending

For the next seven years, the EPP Group is defending an EU budget where solidarity and responsibility go hand in hand by addressing both the economic recovery, making sure we are recovering in an inclusive manner and in ways that our societies and our planet can sustain so that we can shape a better Union for the next generations.

Our first priority for any EU budget, of course, is always the EU citizens, whose lives are affected by the way we choose to spend resources. Here are some of our choices:

Health

The COVID-19 pandemic has shown that there is a clear need for improving not only national health systems but also better cooperation between countries.

Health must be an absolute priority in the EU Recovery Plan. The EU already plans to provide nearly €9.4 billion over the next 7 years for things like the joint procurement of medical equipment, development of vaccines, and the creation of European stocks of medicine and equipment that could be easily deployed to any Member State to prevent shortages. The money can also be used to improve and modernise national healthcare systems and hospitals.

The EPP Group also calls for more money for European-wide research for cancer so that EU funding can be directed to areas where the pharmaceutical companies find limited profitability and to improve the affordability and accessibility of cancer medicines. In cases of rare diseases like childhood cancer, where Member States alone cannot be successful enough, EU funds can be concentrated on coordinated EU research.

Investment in young people

We must show Europe’s youth that our response to this crisis is not being carried out at the expense of their future. We need massive investments in our economies to prevent another lost generation, like we witnessed during the financial crisis.

This is why it is crucial that the Recovery Plan gives hope and perspectives to future generations, and does not burden them with debt. Whenever we spend money, we must clarify where it comes from; whenever we borrow money, we must explain how it will be paid back. The only way to ensure a credible repayment plan is to make sure the EU is equipped with own resources.

And we want more money for Erasmus+ - in times of crisis, we must show that the answer is not to retreat back into our shells but to afford the young generation the same genuine European experience that their predecessors were lucky enough to enjoy. We want the Recovery Fund to finance plans to improve school and university infrastructures (buildings, more green), library networks and the introduction of e-learning tools.

Investment in small businesses

Small and medium-sized enterprises (SMEs) account for 99% of all European companies and employ two out of every three employees. Our response to the Corona recession should be a courageous answer to protect jobs, businesses and to improve opportunities for young people. To do this, SMEs must be at the heart of the recovery strategy, as they are the backbone of the European economy.

The EU plans to mobilise €300 billion to prevent insolvencies which will help many jobs from being lost and ensure that companies are able to invest and contribute to Europe’s economic recovery. The money mobilised through a programme called the Solvency Support Instrument will be focused on the EU countries most in need.

The InvestEU Programme will provide crucial support to companies in the recovery phase and will support the EU in its long-term green and digital transition. It will have a €10 billion guarantee reserved for SME policies. SMEs should apply to their local commercial or public banks whose financial products are covered by the EU guarantee in their country or region. The local intermediary will inform them if a particular financing programme is covered by the InvestEU Fund.

Examples: a German company that develops nuclear medicine solutions for diagnosis and treatment of cancer, a Polish milk powder factory, a Swedish company that developed a water recycling technology for water and energy savings at home, a Latvian company that produces and assembles electronic printed circuit boards and other electronic components, an Austrian company that develops navigation and control units for household robots, a Spanish producer of special long steel products, a French company operating in the field of medical imaging.

Preventing job losses

When the pandemic hit, businesses started experiencing difficulties and were forced to temporarily reduce their activities and the working hours of their employees as a result of the Coronavirus pandemic. Similarly, the self-employed lost their income. Member States decided to activate short-time work schemes to preserve employment and assist the self-employed which led to sudden increases in public expenditure.

As an immediate measure, the EU provided loans to Member States to help workers and businesses. We want the EU to continue to provide this help as long as restrictive measures are in force in Member States.

We must do everything we can to keep viable businesses from failing so that they can continue creating jobs. Through InvestEU, €650 billion can be mobilised for businesses, infrastructure and future-oriented sectors like innovation and digitisation.

For regions and jobs most affected by the transition to the green economy, we need to be able to support the re-skilling of workers, helping SMEs to create new economic opportunities, and overall diversifying economic activity. The Just Transition Fund is expected to mobilise at least €150 billion of public and private investment for that purpose.

Investing in the future

For the EU to continue to be competitive on a global scale, we must invest in future-oriented policies such as research, digitalisation, education or fighting climate change. For example, by increasing financing to research and innovation we will ensure that in case of future pandemics, our researchers will be fully equipped to develop vaccines or medical solutions more rapidly.

Over the next seven years, the EU will invest €94.4 billion to boost European support for health and climate-related research and innovation activities. Europe needs to invest more in better connectivity, and its industrial and technological presence. Technologies such as Artificial Intelligence, cybersecurity, data and cloud infrastructure can all be job creators of the future and will make Europe less dependent on technology coming from third countries.

While Europe was at the forefront of global innovation for centuries, we now need to catch up with the US and Asia. Europe has the potential to lead the next digital wave again, one that is already transforming our traditional industries and our households even more so after the pandemic has moved most facets of our daily lives online.

Agriculture and cohesion

The COVID-19 pandemic has shown the importance of local food production. It is now more important than ever to invest in high quality, safe and sustainable European agriculture. This means that the EU must help farmers and rural communities weather the storm caused by the pandemic and in a timely manner encourage them to produce more sustainably and further contribute to the fight against climate change. €391.4 billion will be earmarked for agriculture over the next seven years.

Also, as the pandemic threatens to undo years of positive results of EU funding and make poor regions poorer, and the rich richer, EU funds need to continue to address this imbalance so that the poorer regions can catch up. Through REACT-EU, the EU is making an additional €55 billion available to Member States and regions the most impacted by the Coronavirus outbreak. Funding grants for municipalities, hospitals and companies will be easier to acquire and will be quickly distributed.