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The European Commission’s Ursula von der Leyen spoke during a plenary session in the European Parliament in Brussels on Wednesday, 27 May 2020. (Kenzo Tribouillard – AFP / Lehtikuva)

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THE EUROPEAN COMMISSION on Wednesday published its highly anticipated proposal for a stimulus package designed to help member states to get back on their feet after the blow delivered by the coronavirus pandemic.

Two-thirds of the massive, 750-billion-euro recovery fund would be disbursed in direct financial support and one-third in loans.

A considerable share of the funding would be reserved for investments and reforms related to key goals such as accelerating the green and digital transitions and increasing the economic resilience of member states.

“The recovery plan turns the immense challenge we face into an opportunity, not only by supporting the recovery but also by investing in our future,” declared Ursula von der Leyen, the President of the European Commission.

“The European Green Deal and digitalisation will boost jobs and growth, the resilience of our societies and the health of our environment. This is Europe’s moment. Our willingness to act must live up to the challenges we are all facing.”

Finnish Minister of the Interior Maria Ohisalo (Greens) viewed in her blog that the scope and structure of the fund is appropriate for helping member states to recover from the crisis and reform their economies.

“Now is the time to rescue the EU and euro,” she stated. “For an export-driven country like Finland, it’d be catastrophic if our internal market fell apart and we couldn’t sell our products in the EU. That’s why we must now prevent the disintegration of the common economic area without forgetting the cross-border climate crisis.”

The Green League views that part of the answer should be to increase other revenue streams than the membership fees of the EU. The financial support for investments, it added, should also be made conditional on certain objectives related to climate actions and research and development.

“The more we are able to raise funding for joint investments from, for instance, profits from auctioning the EU’s emissions rights or a European plastic charge, the less we have to worry about a rise in borrowing in Europe. The EU must also find answers to enforcing the tax obligations of multinational companies and plug the holes in taxation to fund the transition fairly,” it said.

Minister of Finance Katri Kulmuni (Centre) stated to Helsingin Sanomat that the proposal will not be passed unless the share of direct support is reduced and that of loans increased.

“Finland has long underscored that although the eurozone's stability is important to us, ever country must be responsible for their own economic policy decisions and their consequences. I don’t think subsidies with no conditions are a good thing. Loans that encourage structural reforms and boosting European competitiveness are a different matter,” she said to the newspaper.

Finnish MEPs divided

Ville Niinistö (Greens), a Member of the European Parliament, voiced his support for the proposal as it allocates most of the funding to education and green energy-related projects, without which – he added – both Finland and the EU would regress.

“The proposal is also about structural development. The commission is seeking to pay for the recovery fund with new EU-wide taxes, with the likes of a digital tax, kerosene tax, plastic tax and share of emissions trading profits being discussed. It makes more sense also for the market that these taxes are collected at the EU level.”

The recovery fund, he added, presents the torn bloc with an opportunity to re-establish itself as a leader on the world stage.

“Investments in green technology and research are scaled such [in the proposal] that we can emerge as challengers to Asia and the US as far as the direction of the world economy is concerned. It’s worth doing.”

Miapetra Kumpula-Natri (SDP) estimated similarly that robust stimulus is necessary to make sure Europe does not fall behind Asia and the US. Most Finnish exports, she reminded, are shipped to the internal market, meaning stimulus is needed to maintain demand and prevent the collapse of heavily indebted economies like Italy and Spain - the worst-case scenario for Finland and the EU.

She also stressed that the funding should be directed not to wilting industries but to areas such as digitalisation and green technologies that fuel future growth and job creation.

The National Coalition’s Sirpa Pietikäinen, Petri Sarvamaa and Henna Virkkunen congratulated the European Commission for drafting a proposal that takes into account rule-of-law principles and places an emphasis on future investments, as demanded by the European Parliament.

The lawmakers would, however, place three conditions on the fund: First, to ensure the funds are used appropriately and the use monitored democratically, it has to fall within the joint remit of the European Council and Parliament. Second, the funding should be disbursed mostly as loans rather than income transfer-like subsidies. Third, the funding should be conditional on economic and social reforms aimed at moving toward a carbon-neutral and environmentally sustainable economy.

Mauri Pekkarinen (Centre) branded the proposal as worse than the 500-billion-euro stimulus package proposed by German Chancellor Angela Merkel and French President Emmanuel Macron.

“Subsidies worth 500 billion euros, unlike during the financial crisis. Finland will cough up over eight billion euros of it but only get crumbs. An additional 250 billion euros in loans, with our exposure at four billion,” he tweeted.

Ville Tavio (PS) claimed that the recovery fund, along with other financial mechanisms, is an attempt to tighten the grip on Finland and other EU member states.

“The EU elite is increasing its control over member states unscrupulously under the guise of the coronavirus crisis so that no other country can make a Brexit-like divorce from the federation that is the EU,” he slammed.

The recovery fund, he said, is obviously not in the best interests of Finland. “The EU is violating its own rules and making other countries pay for the poor economic management of Italy and Spain.”

Aleksi Teivainen – HT
Source: Uusi Suomi

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