EUR 500 billion European Recovery Fund proposal: an insufficient way forward

The proposal between French Prime Minister Emmanuel Macron and German Chancellor Angela Merkel sets over a €500 billion rescue fund to help the European Union’s economic recover from the impact of the COVID-19 crisis.

The President of European Left, Heinz Bierbaum, welcomed the initiative as a step forward remaining at the same time critical and setting a demand for a social-ecological transformation as the only way out of crisis. He said:

“The proposed European Recovery Fund of €500 billion is indeed a step in the right direction. It foresees that the funds will be given as grants – and not as loans – to the hardest-hit sectors and regions in the EU. It means that those grants don’t have to be repaid. But this is not enough to cover the cost of the crisis. Furthermore, the proposal needs to be backed up by the 27 EU states, what still remains uncertain. In the next days we will see if Macron and Merkel are able to unite all member states behind their plan of recovery. Even if implemented, the proposal remains insufficient and cannot replace the still refused Eurobonds. We are facing the worst recession in living memory. It rises questions about effectiveness of European Union to tackle an international crisis and puts a question mark over its long-term future.

The way the EU is dealing with the current situation will undoubtedly come to be seen as a lost opportunity, a failure of ambition and a bitter disappointment to all those people who have been promised so much, but are actually going to see so little. First and foremost, everything must be done to protect the people. The crisis provides sufficient reasons to question our socio-economic model and to radically change politics. A public, social, and ecological transformation of the economy is therefor urgently needed. The Party of European Left (EL) calls for an extensive investment programme based on social-ecological transformation, which should be financed centrally via European Central Bank (ECB). The ECB’s money should be used to help the people to emerge from the medical health emergency and to combat the consequences of the crisis, not to maintain the rate of return on capital. It is crucial that measures tackling the coronavirus impact provide economic and climate security for all.”