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Business 28/04/2021

Berlin and Paris call for acceleration of recovery: "We have lost too much time"

French and German finance ministers present their recovery plans

3 min
French President Emmanuel Macron and German Chancellor Angela Merkel during a video conference.

BrusselsIt's been almost a year since Angela Merkel and Emmanuel Macron revived the EU's Franco-German engine to propose a recovery fund against the coronavirus pandemic with common debt. But the energy generated from Berlin and Paris still circulates through the gears of the European Union without combustion. The money hasn't arrived, hasn't even begun to be issued, and meanwhile the United States already has a new president who has launched an unprecedented economic recovery plan. "We have to be clear, we were very efficient last year in adopting the European recovery plan and the decision to issue common debt. But since then, we have lost too much time, China has regained its growth and the United States is already bouncing back", French Finance Minister Bruno Le Maire acknowledged on Tuesday.

He said this at a joint virtual press conference with his German counterpart, Olaf Scholz, who wanted to honor and claim epically the gesture of their respective heads of state and government. "Without our cooperation, the moment we are celebrating right now would not have been possible", said Scholz. "When France and Germany want to, Europe can", the Frenchman reiterated. A politically necessary claim because the gesture is far away and the European Union continues to be questioned, even more so after the president of the United States, Joe Biden has announced a plan to revive the American economy with unprecedented public spending.

"Europe is different from the United States. There are also the fiscal strategies of the states themselves and then our joint response, a big problem that is absolutely different from the response of ten years ago and that I am convinced will make a global difference", the German minister responded when asked about the need to rethink the scale of the European recovery plan in the face of the magnitude of the pandemic and the American response. Le Maire was even more blunt: "The comparison with Biden is unfair and inappropriate. If you want to make comparisons between the two continents, you have to take into account European social policies and the money already spent".

Even so, that the self-proclaimed engine of Europe claims the quality of the European response does not mean that they do not admit that there is no time to lose to face the recovery. That is why Le Maire has asked the European Commission to go as fast as possible to approve the recovery plans and the governments that have not yet done so to activate the necessary ratification in order for the Commission to be indebted to obtain the 800,000 million euros of the recovery fund. He also warned of the danger of depending on the United States or China in economic and technological terms.

Several countries have yet to ratify this and the European Commission is counting on the most optimistic scenario that it will be able to start distributing the advances in June. Even so, Le Maire himself has admitted that he expected them in September. For the money to arrive, Brussels needs to approve the recovery plans that will be presented largely this week (Greece and Portugal have already submitted them). But the Commission has two months to look at them and the Council another month, deadlines that are not expected to be shortened.

In the general lines presented by the two ministers, Scholz explained that of the 25.6 billion euros in subsidies that Germany will receive from the fund, 11.5 billion will go to green policies or ecological transition and 14 billion to digital transformation, and he pointed out that it will mean a growth of two points of the German GDP. For his part, Le Maire has defended the need to reform and modernise the French economy with the 39.4 billion euros in subsidies that correspond to the fund.

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