The European Green Deal as EU’s main recovery strategy.
End of May 2020, the European Commission has put forward its proposal for a major recovery plan. The Coronavirus has shaken Europe and the world to its core, testing healthcare and systems, our societies and economies and our way of living and working together. To ensure the recovery from this pandemic is sustainable, even, inclusive and fair for all Member States, the European Commission is proposing to create a new recovery instrument, Next Generation EU, embedded within a powerful, modern and revamped long-term EU budget. To protect lives and livelihoods, repair the Single Market, as well as to build a lasting and prosperous recovery, the European Commission is proposing to harness the full potential of the EU budget. Next Generation EU of €750 billion as well as targeted reinforcements to the long-term EU budget for 2021-2027 will bring the total financial firepower of the EU budget to €1.85 trillion.
Complementing national efforts, the EU budget is uniquely placed to power a fair socio-economic recovery, repair and revitalize the Single Market, to guarantee a level playing field, and support the urgent investments, in particular in the green transition, one of the key to Europe’s future prosperity and resilience. Relaunching the economy does not mean going back to the status quo before the crisis but bouncing forward. Therefore, the European Green Deal will be an essential pillar for the EU’s recovery strategy. This recovery strategy will massively invest in priority areas such as:
- A massive renovation wave of buildings and infrastructure and a more circular economy, bringing local jobs.
- Rolling out renewable energy projects, especially wind, solar and kick-starting a clean hydrogen economy in Europe;
- Cleaner transport and logistics, including the installation of one million charging points for electric vehicles and a boost for rail travel and clean mobility in our cities and regions;
- Strengthening the Just Transition Fund to support re-skilling, helping businesses create new economic opportunities.
This recovery plan shows an unprecedented capacity of solidarity by the EU: Europe has done in two and a half months more than in the four years that followed the financial crisis; this is the result of an enormous political consensus because the proposal shows solidarity, clear goals and is in line with the main EU strategic priorities, in particular the Green Deal.
These massive investments must trigger a new European economic model: more resilient, more protective, and more inclusive. All these requirements lie in an economy built around Green principles.
Indeed, the transition to a climate-neutral and green economy, the protection of biodiversity, the transformation of agro-food systems, and the development of circular business models have the potential to rapidly deliver jobs, growth and improve the way of life of all citizens in the EU, the Mediterranean and worldwide, and to contribute to building more resilient societies.
The political will and consensus are there today. Making the EU recovery plan “green” has a huge potential to build back the European economy and contribute to creating a new prosperity model. There is need to prepare Europe for the future, and design recovery plans, both at the local, national and at the EU level, combining the fight against climate change and the development of a green and circular economy, to be the core of this economic strategy to recover from the recent crisis. These new funds, added to those funds supporting pioneer projects like SwitchMEd and GIMED need to become green actions and green investments that will change the lives of citizens and contribute to the quick recovery of the EU economies and societies and at the same time make Europe and its neighbour’s economies greener and more sustainable.
What are the key instruments supporting this recovery plan for Europe and its neighbour’s?
The investments will be channelled via a variety of instruments:
- European Recovery and Resilience Facility, embedded in the European Semester
Mechanism: Grants and loans by implementing Member States’ national recovery and resilience plans defined in line with the objectives of the European Semester, including in relation to the green and digital transitions and the resilience of national economies
Budget: €560 billion of which €310 billion for grants and €250 billion in loans
- REACT-EU – Recovery assistance for cohesion and the territories of Europe
Mechanism: Flexible cohesion policy grants for municipalities, hospitals, companies via Member States’ managing authorities. No national co-financing required
Budget: €55 billion of additional cohesion policy funding between 2020 and 2022
- Supporting the green transition to a climate-neutral economy via funds from Next Generation EU
- A proposal to strengthen the Just Transition Fund up to €40 billion, to assist Member States in accelerating the transition towards climate neutrality
- A €15 billion reinforcement for the European Agricultural Fund for Rural Development to support rural areas in making the structural changes necessary in line with the European Green Deal and achieving the ambitious targets in line with the new Biodiversity and Farm to Fork strategies
- Enhanced InvestEU Program, including a Strategic Investment Facility
Mechanism: Provisioning of an EU budget guarantee for financing of investment projects via the EIB group and national promotional banks
Budget: €15.3 billion for InvestEU. Additionally, a new Strategic Investment Facility to be equipped with €15 billion provisioning from Next Generation EU
- New Solvency Support Instrument to support equity of viable companies
Mechanism: Provisioning of an EU budget guarantee to the European Investment Bank Group to mobilize private capital
Budget: €31 billion
– A new Health Program, EU4Health, to strengthen health security and prepare for future health crises with a budget of €9.4 billion.
– Reinforcing rescEU, the EU’s Civil Protection Mechanism, to respond to large-scale emergencies
Mechanism: Grants and procurements managed by the European Commission
Budget: A total of €3.1 billion
Furthermore, the EU is also proposing to reinforce other programs to allow them to play their full role in making the Union more resilient and addressing challenges brought along by the pandemic and its consequences. These are, among others, Horizon Europe, the Neighborhood Programs, Development and International Cooperation Instrument (NDICI), Humanitarian Aid Instrument.
Huge opportunities for a green transition in Europe and in the Mediterranean!