“An exceptional measure to deal with exceptional times”
The €1.85 trillion heavy budgetary plan published by the European Commission on 27 May is an “exceptional measure to deal with exceptional times” highlights Gert Jan Koopman, European Commission director-general for budget. The ambitious plan includes the issuing of debt by the Commission – a clear line of division between member states since the outbreak of Covid-19 and the ensuing economic crisis.
- 13:56 – the “needs assessments” identifying the EU economic needs and potential effects of implementing the proposal
- 17:28 – legal architecture of the EU debt-issuing: “an exceptional measure in exceptional times”
- 18:48 – challenges and opportunities for the EU budgetary system
“The plan would benefit all member states”
Koopman remains hopeful that the proposal will be treated favourably at the next EU Council meeting as – if implemented in full – “the plan would benefit all member states”. In fact, they would have to pay less for the budget in the coming 7 years. Then, from 2027 onwards the Commission foresees the expansion of its “own resources” that could very well cover the repayments from today. Koopman stresses that in an economy well below its production capacity, with rock-bottom interest rates, the goal is to “boost investment and raise economic growth.”
- 3:00 – the proposal and its impact
- 6:09 – “it is a win-win for everyone”
- 6:44 – will members states have to increase their GDP percentage going to the EU?
- 30:17 – the response to the budgetary proposal
How will the money borrowed for the EU recovery plan be repaid?
He says through an emissions trading system, a carbon border adjustment, and a possible digital tax to accrue the EU budget. Koopman emphasizes the borrowing is not mutualizing the debt of member states, but about using the EU budget for common investment programmes and reforms based on European priorities – like digitalization and the Green Deal. The assessment of the Commission furthermore has shown that the programme could be so effective that “rather than burdening our children with debts occurred today, we would equip them with a working economy that would allow them to repay their debts”.
- 3:53 – “the financing will not be put on next future generations, in fact the plan is intended to protect future generations”
- 4:52 – who will contribute to the next budget? it is not debt mutualisation, but “programmes and reforms based on EU priorities”
- 7:30 – the new four EU’s own resources
- 10:38 – on green and digital, “the biggest programme we are proposing is the recovery and resilience facility”
A strengthened social contract
Recovery aids will be indeed conditional to the respect of the rule of law and transparency, as well as benefit both the public and the private sector, reinforcing trust towards the EU institutions. Koopman concluded asserting that the social contract in Europe will be strengthened by these measures as there is growing awareness of the need to find common solutions in the EU: “we are in this together”.
- 10:00 – the rule of law conditionality
- 12:13 – rigorous procedures to protect the EU financial interests
- 21:22 – bailouts and the fundamental difference with the 2008 crisis
- 24:35 – flexibilization of structural funds money and “Europe for you”
- 27:16 – a growing awareness, even among the frugal, that “we are in this together”
The Strategic Conversations series invites key policymakers to share their views on a range of important and strategically relevant issues through interviews with senior thinkers on the Friends of Europe team. Get information first-hand from European Commission Director General for Budget, Geert Jan Koopman, on the next Multiannual Financial Framework right after EU decisionmakers discussions.
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Hear first-hand on the EU ambitious recovery plan unveiled yesterday – is it a trade-off, or a recovery and transformation plan? And will member states agree to it?
To ensure the recovery is green, digital, but mostly inclusive and fair for all member states, European Commission President Ursula von der Leyen plan brings the total financial firepower of the EU budget to €1.85 trillion, including a €1.1 trillion, seven-year MFF budget and a €750 billion recovery fund, using borrowed money to be repaid over 30 years.
In response to those more reluctant to a stronger MFF, von der Leyen affirmed that “the cost of not investing in this crisis now will come back manifold in the future”.
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Gert Jan Koopman
European Commission Director-General for Budget
Director of Insights at Friends of Europe
Gert Jan Koopman is a highly experienced civil servant and manager with over 25 years of service for the European Commission, where he is currently responsible for the EU’s financial programming, the annual budgets, accounting and financial rules. Prior to this, he was in charge of State Aid control at DG COMP and worked on the overhaul of State Aid Policy through the State Aid Modernisation programme. Koopman also served as Director for Policy Strategy and Co-ordination at DG ECFIN, working largely on economic services and structural reform.
Prior to joining Friends of Europe, Dharmendra Kanani was director of policy at the European Foundation Centre (EFC). He was the England director at the Big Lottery Fund, the largest independent funder in the UK and fourth largest in the world. Dharmendra has held senior positions in the public and voluntary sector and advisor to numerous ministerial policy initiatives across the UK.
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