EUs response to this crisis can be labeled as “so far so good” instead of “too little too late”.
The current pandemic has confronted Europe with the risk of a considerable economic downturn. This real and present danger has led many to argue for a coordinated and substantial European recovery package that will allow EU member states, companies and citizens to weather the storm. But the debate has become polarized and an agreement on the size, type and financing of the proposed 750€ billion package remains elusive.
The Wednesday Social was opened by Joe Lynam from BBC who pointed out the severity of the crisis and the impact for businesses and citizens –many of them having lost their jobs. This unprecedented crisis marks the worst recession since World War II.
The discussion started with Paolo Gentiloni, the Commissioner for Economy and former Italian Prime Minister. His key message was that Europe has already started the path of recovery, but the road is paved with uncertainty. In addition, the economic differences among member states are enlarging. While some member states will be back to their 2019 GDP very soon, several others will not recover that fast. During this crisis, the reaction of the EU can be described as “so far so good” instead of “too little too late”. The EU allowed flexibility on state-aid and fiscal rules, implemented credits and loans for member states to support their health care systems and has proposed the recovery fund with 750€ billion. However, a swift agreement on the recovery package is needed (already in July!) to keep people employed and avoid the social impact of the current crisis.
Romanian MEP Clotilde Armand (Renew) talked about cohesion: She criticized the standard argument of net contributors such as the “frugal four” and their common belief that the generous West pays for the poor East. A new concept that shows the reality is required: The Single Market brings an added value to businesses and citizens but not to all likewise. A functioning internal market should be based on a right balance of resources, including cohesion funds for less competitive regions.
METRO AG CEO Olaf Koch explained the impact of the crisis on our operations and business, but also on METRO’s main customer group, the hospitality sector. This sector is slowly starting to recover, however, we all need to support SMEs and independent businesses, as they are crucial for the recovery of Europe. Since the beginning of the crisis, METRO has supported SMEs in the hospitality sector, for example by helping them implement new concepts or with additional tools. However, this crisis could also be an opportunity for European businesses: there is also a chance for new “empowerment”, if the recovery fund would be used for investments into the digitalization of independent businesses. For example, the lockdown has shown that those companies which had already started to digitize their internal processes and business model (e.g. delivery) were better positioned that those ones lagging behind.
All panelists were optimistic about the recovery of the European economy and emphasized the great potential of the EU recovery fund. Paolo Gentiloni wanted to conclude repeating the idea that the goal of the package is to avoid further fragmentations within the Single Market, the best guarantor for the recovery of Europe’s businesses and for the welfare of its citizens.