Europe needs a new balance, says PM

PM lays out vision for post COVID-19 Europe. Frankfurter Allgemeine Zeitung

"Hermann Hesse once wrote that 'We cannot help it and we are responsible all the same.' Today we are faced with the biggest crisis in public health, society and the economy in recent decades. And, although no one could predict or predict the pandemic, it is we who are responsible for its long-term effects.

”Economists have pointed out that China is facing the biggest economic slowdown in decades, and that unemployment in the US may reach as much as 20 percent. Within their fiscal packages, the world's leading economies want to channel USD 4.8 billion to fighting the effects of the COVID-19 disease. This is nearly three times as much as the amounts activated during the crisis of 2007-2009.

"This why today, more than ever, we need a Europe of Solidarity with an ambitious budget and a new, reconstructed balance. The functioning of the EU must be driven by the ambition for solidarity-based economic cooperation, undertaken with the aim of protecting the integrated European market.

"We must be aware that the decisions we make today have an existential character. We must do all in our powers to salvage European dreams, plans and ambitions. This is an incredibly difficult task, because it requires simultaneous action on multiple levels. Today, the economy and health need an urgent rescue plan. Already today we should be mapping out the main principles of a new European balance.”

"The coronavirus pandemic has made us brutally aware of how fragile our social and economic order is. It showed how dependent Europe is on supply chains from other continents. In their quest to save money and cut costs, many European companies have moved their production to Asia, neglecting domestic supply sources. It seems something of a paradox today, but the financial discipline pursued by the European Commission forced the member states to make difficult choices, which often led to cuts in public health spending. This, however, is not a cause for self-pity, but to take matters into our own hands.

"Today, the first principle behind a new European balance should be the restoration of the ability to counter the effects of such collective crises. Europe needs a comprehensive economic revival package to stimulate the European economy. Our joint consent regarding an ambitious shaping of the Multiannual Financial Framework, and an increase in the EU's own means, its income, is necessary. Only this way will we be able to re-find the balance which disappeared owing to internal divisions and mutual hostilities.

"We appreciate that the EU has created conditions for its members to act against the crisis by instituting instruments ensuring loan guarantees and more flexible principles in employing EU funds. Also simplified is the allottment of public aid in the member states, and the regulations of the Stability and growth Pact have been temporarily suspended. All the member states - some earlier and some later - launched steps to salvage jobs and their economies within their own budgets. However, we must do more together for Europe to regain its growth and shine.

A budget to suit the times.

"Today we must discard our fears of a more ambitious budget. At the time of this crisis, the most effective form of EU aid will be funding designated for the cohesion and agricultural policies. However, just moving funds within the existing quotas will only be a semblance of a short-term survival tactic. Whereas Europe needs a strategy aimed at rebuilding its position.

"The EU should designate new financial means (perhaps from the Recovery Fund) to counteracting the economic effects of the pandemic. We know from the past, that austerity strategies and belt-tightening during the crises of 2007-2013 failed to pass the test.

"We still have the comfort of being able to point to new financing sources. The introduction of FTT, digital, carbon footprint and third-country import taxes or a Single Market Fee would be a valuable income source for the EU.

"Another still unresolved issue the curbing of tax evasion. The EU countries lose at least EUR 200 billion annually on cross-border tax infringements  (VAT, CIT, grey zone). This amounts to more than this year's EU budget. Europe's raison d' etat is to do away with tax havens. Involved here are huge reserves, which show Europe's financial potential. Here and now we must create funding for large new investments in innovation, infrastructure and the reconstruction of numerous segments of the European production chain.

"The President of the European Commission said recently that Europe has done more over the past four weeks than during the initial four years of the last crisis. This is true. Today the Community is confronted with unprecedented challenges. But even so, this is only the first kilometre of the marathon that awaits us. The way in which we handle the effects of the pandemic will re-define the European Union. "The future begins today, not tomorrow," Saint John Paul II said. “The time for us to take action is today."