Europe has provided a "swift response" to the crisis - Minister

European Union – Recovery plan – Interview given by M. Clément Beaune, Minister of State for European Affairs, attached to the Minister for Europe and Foreign Affairs, to L’

Paris, 14 August 2020

Q. – How can France hope to get money out of the European recovery plan?

THE MINISTER – Out of the €750 billion in the plan, the central reactor core consisting of budget subsidies accounts for €390 billion. That €390 billion contains €312 billion in direct aid to States. Of that package, France should get just over €40 billion – more than expected before the European summit. We’ll have to add several billion under the other subsidies in the plan, particularly through the Common Agricultural Policy and funds to support the regions, including overseas, but the exact sum has yet to be finalized.

Q. – When will the money be paid?

THE MINISTER – At the beginning of next year. If not everything is finalized by then, 10% in pre-funding for States has been provided for. The plan will also be retroactive: expenditure begun since 1 February 2020 will be eligible for European finance. That will make it possible to speed up European support and respond to critics who believe the plan has come too late.

Q. – How will the funds be paid out?

THE MINISTER – There will be two stages. National plans will have to be presented to the other member States in the autumn. A swift four-week examination period is expected. The aim is to ensure all the plans are validated before the end of the year. If discussion points emerge, the Council will vote by qualified majority. That’s important: there will be no right of veto. Once the plans are validated and the package approved, the Commission will regularly check that the reforms and investments are properly implemented. A special task force attached to the Commission President will be created.

Q. – This money will have to be reimbursed. How will France pay?

THE MINISTER – The advantage of pooled debt is that no reimbursement is expected for several years, giving time to revitalize the European economy. This major change allows Europe to address the crisis in an effective and mutually supportive way. So there will be no collective reimbursement before 2027. Since this will only occur from the next budget onwards and will end in 2058, it’s impossible to say for the moment how much France will have to pay back. Everyone bandying about big figures is lying. Between now and then, we intend to change the EU’s finance system by establishing new resources, the principle of which we endorsed at the European summit in July, and ending the rebates system.

Q. – Emmanuel Macron has said French taxpayers won’t pay for the plan…

THE MINISTER – I want to lay the ghost of what in European jargon is called “own resources”. There’s no question of increasing taxes on French people and businesses. The debate is about those players who pay no tax while profiting from the European market. I’m thinking of the digital players. Nearly 10 member States have already created taxes on the digital sector. We’re thinking of broadening this to the whole EU. The debate about the implementation of a carbon tax at Europe’s borders – which would affect countries that export to the EU without paying the same carbon price as European countries – is also making headway.

Q. – What would those resources amount to annually?

THE MINISTER – The Commission’s estimates hover around €10 billion a year, according to cautious estimates, while collective reimbursements would be around €17 billion per year after 2027. That will markedly reduce the bill. I stress, the myth of a cost to the recovery must be debunked.

Q. – Will the Commission itself have something to say about the conditions for obtaining funds?

THE MINISTER – It’s not up to the Commission to dictate the reforms or investments to be carried out in each country, but to assess them. For years, France has been calling for European economic governance to be put in place. With this plan, we’re beginning to coordinate our priorities.

Q. – What are they?

THE MINISTER – The needs aren’t the same in Italy, France or Slovenia. So the criteria are relatively flexible: investments will have to support structural reforms in keeping with the recommendations of the European Semester [assessments of public policies by the European Commission], and 30% of expenditure will have to be devoted to the environment, an ambitious target France has fought for.

Q. – Arnaud Montebourg believes that with this plan, “we’re very wide of the mark”. What’s your response to him?

THE MINISTER – Pooled debt is a powerful and unprecedented anti-crisis mechanism: the European budget is going to be doubled over the first three years, and France will be the third-largest beneficiary of that. We mustn’t look at the plan in isolation. In addition to the €750 billion that has just been endorsed, €540 billion in loans was decided on in April. With the emergency spending carried out by the member States in 2020, that brings us to a total of between €1,500 billion and €2,000 billion. That’s not to be sniffed at! You can see the glass as being half empty. I regard it as three-quarters full. Europe has provided a swift response commensurate with the crisis.

Q. – What are the challenges when the EU returns in the autumn?

THE MINISTER – Firstly, finalizing and implementing the recovery plans, with a last important stage: voting in the European Parliament and national parliaments.

Q. – With the possibility of a rejection by the “frugal” countries?

THE MINISTER – I don’t think so. The countries checked with their parliamentary coalitions during the last summit. What concerns me is the urgency. All the parliaments need to have ratified the plan by the end of the year. The second challenge is communication. We must show that the EU has contributed to the recovery plan, that every country isn’t acting alone, that Europe can be effective and practical when you fight [for things]. It’s what I’ve endeavoured to do since I was appointed.

Q. – And apart from the recovery plan?

THE MINISTER – Brexit, on which negotiations remain difficult. We’re still set on defending France and the EU’s interests. Britain can’t have the best of both worlds; it would be disastrous economically and politically. Being part of a club confers advantages. Leaving it must mean these advantages disappear. Another important issue: we’re going to have to endorse by the end of the year our targets to reduce carbon emissions by 2030. Finally, we’ve also got to succeed in swiftly wrapping up the negotiation on common European asylum and migration rules./.

Published on 17/08/2020

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