France and Germany have jointly established plans for billions of spending from the European Union’s Pandemic Recovery Fund to fight climate change and boost the use of digital technology across the economy.
Finance ministers from the EU’s two largest economies on Tuesday stressed their joint determination to use spending to transform the European economy and grow the continent again as it lags behind the US and China in recovering from recession. pandemic.
According to the fund’s formula, France is expected to get around 40 billion euros ($ 48 billion) while German finance minister Olaf Scholz said his country has planned around 30 billion euros ($ 36 billion) of spending. Scholz said half of the money would go to environmentally friendly projects and a quarter to the widespread use of digital technology. He said the fund will build on domestic support and stimulus measures already approved by the German government
He called the fund “a revolutionary step for Europe”.
French Finance Minister Bruno Le Maire urged the European Commission, the executive branch of the EU, to quickly evaluate the plans so that money can start flowing to member states from the € 750 billion ($ 906 billion) fund. ) as early as July, noting that the US and China recovered faster. He said that since the fund was approved “we have wasted too much time” and that “Europe must stay in the running”.
The Spanish government has also approved its proposal on how it wants to invest the recovery funds. Spain, hit hard by the pandemic, is expected to receive 140 billion euros (166 billion dollars) – half in direct payments and the other half in loans – from the EU recovery plan, second only to Italy. In line with EU priorities, Spain’s left-wing government has placed a strong emphasis on creating a greener economy, while increasing productivity for an economy that shrank by 11% last year.
The money comes with pressure from Brussels to address the problems identified by the European Commission’s review of member states’ economic policies. Spain, for example, is being asked to review labor laws, tax practices and pensions. Countries with low tax regimes like Ireland or Cyprus are under pressure to discourage aggressive tax planning by multinational corporations.
Italy’s € 221.1 billion ($ 267.3 billion) recovery plan includes measures to reduce its backlog of litigation, which is seen as an obstacle to businesses unable to resolve trade disputes quickly.
Sylvie Corbet reported from Paris.