Is the post corona EU economic recovery plan really worthy?


The ongoing pandemic lasts for more than several weeks now. It has put some of the EU Member States in quarantine, while all of them aborted major economic activities which potentially led to cuts of millions of jobs. This surely will not leave the EU’s economy without consequences. While not all the Member States are equally vulnerable, most will face difficulties in conducting the post corona recovery. Does the EU have a realistic plan to help its Member States? How shall a supranational entity tackle the biggest crisis over the last few years?

It is hardly likely that any of the crises could posit such a harsh influence to the job market in the EU. Covid19 pandemic has demonstrated that even in one of the most stable parts of the globe, it is estimated that quarter of the EU based job posts are endangered by the Covid19 pandemic.

McKinsey & Company estimates that up to 59 million jobs are at risk of things like reduced working hours, temporary furloughs or permanent job losses. reports that according to this study, an unemployment could almost double in the coming months with staff most affected in areas like customer service and sales, food services and building occupations. A report reveals an 11% worst-case unemployment rate with those in hospitality, small business and arts most vulnerable.

In a debate with Frans Timmermans, the Environment Committee says the EU must remain firm on climate change and the timetable foreseen for the Climate Law. The EU Parliament’s Committee on Environment, Public Health and Food Safety had an exchange of views with Frans Timmermans, Executive Vice-President of the Commission, on the European Green Deal and on the European Climate Law which was connected to post corona recovery as well.

In a Resolution passed by the EU Parliament on April 17, it urged for several actions in combating the crisis. First action was the EU Coronavirus Solidarity Fund establishment. MEPs also call for a permanent European Unemployment Reinsurance Scheme and want to establish an EU Coronavirus Solidarity Fund of at least EUR 50 billion. This fund would support the financial efforts undertaken by the healthcare sectors in all member states during the current crisis, as well as future investments in order to make healthcare systems more resilient and focused on those most in need. Resolution also voiced for a Greater power for EU to act in the case of cross-border health threats.

Besides, it stipulates that borders must be kept open for essential goods. The Resolution expressed concerns about the State of rule of law and democracy in COVID-19 Europe: especially in Hungary and Poland. Finally, the resolution stresses that disinformation about COVID-19 is a major public health problem. The EU should therefore establish a European information source to ensure that all citizens have access to accurate and verified information. MEPs also call on social media companies to proactively take the necessary measures to stop disinformation and hate speech related to the coronavirus.

The Parliament calls on the euro area Member States to activate the EUR 410 billion of the European Stability Mechanism with a specific credit line and reminds that the crisis is not the responsibility of any particular Member State and that the main objective there should be to fight the consequences of the outbreak. As a short term measure the European Stability Mechanism should immediately extend precautionary credit lines to countries that seek access to it in order to address short-term financing needs to tackle the immediate consequences of the COVID-19 and with long-term maturities, competitive pricing and repayment conditions linked to the recovery of Member States’ economies.

The Parliament urges the Member States to rapidly agree on a significant injection of capital into the EIB to enable it to rapidly contribute its substantial firepower to mitigating the economic impact of COVID-19, including the creation of a new EIB credit line to guarantee liquidity to SMEs.

Even though the Resolution passed by the Parliament is mandatory, it is barely likely that it will come to an effect. Earlier than its adoption, the EU Commission has announced the SURE instrument which is intended to protect jobs and people at work. The Commission put forward Temporary Support to mitigate Unemployment Risks in an Emergency – SURE – to help people keep their job during the crisis. Sure, it provides funding to Member States of up to €100 billion by covering part of the costs related to the creation or extension of national short-time work schemes.

No one exactly knows how the world and EU look will like soon. Economic efforts by the EU institutions to financially mitigate the pandemic consequences are surely positive issue, but the reality will demonstrate was it really worth it.

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