Von der Leyen signs off first of EU’s Covid recovery fund plans
Speaking in Lisbon, the European Commission president said she believed the Next Generation EU fund, which has been weighed to prioritise digital and green projects, would be a “European success”.
The commission raised a first €20bn tranche of the fund through the sale of 10-year bonds on Tuesday. The massive joint issuance of debt, the largest in the union’s history, is seen in Brussels as a milestone in the history of the union.
It is also being regarded as an opportunity to convince national populations of the merits of the EU. A report, published by the European Council on Foreign Relations (ECFR) last week, suggested a poor early response to the health crisis and the stuttering EU vaccine rollout had dealt a blow to confidence in the union’s capabilities. Majorities in France (62%), Italy (57%), Germany (55%), Spain (52%) and Austria (51%) described the EU project as “broken”.
The first national programme to receive what Von der Leyen described as the commission’s “green light” was that of Portugal and its €16.6bn recovery and resilience plan made up of €14bn in grants and €2.6bn in loans.
“The plan was designed in Portugal,” Von der Leyen said standing alongside the country’s prime minister, António Costa. “The reforms and investments contained in this plan will allow Portugal to emerge from the Covid-19 crisis stronger, more resilient, and better prepared for the future. In short, it will help build a better future for the Portuguese people. We will stand by Portugal every step of the way. Your success will be our success. A European success.”
Von der Leyen travelled to Spain later in the day to meet the prime minister, Pedro Sánchez. She also plans to visit Greece, Denmark and Luxembourg later this week to support their plans.
Spain, the member state whose economy was hit hardest by the pandemic with a 10.8% contraction in 2020, is the second country to receive endorsement for its spending strategy. It will receive €70bn in grants and €70bn in loans in the next five years. The commission’s approval will need to be followed by endorsement of the member states later this year.
Sánchez has suggested the recovery plan could transform Spain’s economy in a manner similar to that experienced with entry into the European Community in 1986.
At a joint press conference with Von der Leyen, he announced that he would meet the heads of Spain’s regional governments before the summer to discuss the plan and to ensure that they – and the country’s thousands of mayors – had their say.
“Our aim is to make sure that the recovery is quick and fair – so that no region and no generation is left behind – and that we look towards the future,” Sánchez said. “This is a nationwide plan; a plan that involves all of us. We have an enormous opportunity to modernise our country for the generations to come.”
Under the scheme, the national plans must apportion at least 37% of the spending on projects that are in line with the EU’s 2050 target for net-zero greenhouse gas emissions, and 20% on digitisation.
Green MEPs have already raised concerns that a number of spending priorities in the plans submitted to the commission were only superficially in line with the stated priorities, raising concerns of “greenwashing”.
Sven Giegold MEP, financial and economic policy spokesperson for the Greens, said: “Now it is a matter of implementation whether the fund’s potential for the green transformation of the European economy is fully exploited.
“In the case of Portugal, for a significant part of the measures it is not yet foreseeable whether they will have a positive or negative climate impact.
“Important details on the implementation of some of the measures planned are still missing. Whether the construction of new housing will contribute to the achievement of the European climate targets will depend decisively on the building materials used and the energy efficiency of the planned buildings.”