Social Europe: An economic, as well as a monetary, union?

The significance of the five-day European Council is not simply the sheer size of the €1.2 trillion stimulus to be given the EU economy but the unprecedented scale of the collective borrowing the union will undertake on world financial markets, to finance that recovery strategy. Of the €750 billion to be invested in post-pandemic economic recovery, an unprecedented €390 billion will be in grants, not repayable loans. [...]

To pay for the collective-borrowing programme, the summit also agreed—in principle—to new common taxes. These include levies on plastics and polluting imports and a digital tax. Although details remain to be agreed, this is a radical step towards an EU fiscal policy. [...]

The logic of what was agreed may, though, demand still further and more radical changes in future. The union will also have to decide whether the wind of change must sweep through the forthcoming Convention on the Future of Europe—and lead to major reforms of the EU constitution itself.

read the article

EU south hails step towards federalism, north sees handout

Almost half of this, 32 billion euros ($36bn), comes from NextGenerationEU, with some 19 billion euros ($21bn) in the form of grants and more than 12 billion euros ($13bn) in the form of loans. Over a five-year period, the grants alone amount to a boost of about 2 percent of Gross Domestic Product (GDP) per year. [...]

The pandemic is set to claim 8.3 percent of the EU economy, but other countries in the European south stand to lose even more than Greece. Spain, Italy and France are expected to see recessions to the tune of 11 percent. [...]

NextGenerationEU marks the first time all 27 EU members are selling debt together, and it is the first time the Commission is to be given powers to levy taxes and raise resources of its own to service that debt. [...]

"Conte is probably the last thing separating Italy from sliding to a new wave of anti-Europeanism that could be fatal, not just for Italy's participation in the euro, but for the entire European integration project and the single market," he said.

read the article