The European Commission has proposed an ambitious new budget for the next seven-year period. Is this enough, and can the Union progress in circumstances that have not occurred in recent history? We spoke with Ognian Zlatev, head of the European Commission Representation in Croatia.
– This is not the first time the European Union has faced a crisis. True, this one is unprecedented in nature and scope, but similar thoughts were held during some previous crises, and we emerged from them strengthened with new mechanisms and more resilient. Although this crisis could not have been predicted, we have the necessary knowledge, experience, and resources for recovery. Accordingly, the Commission has presented an ambitious and comprehensive European recovery plan based on the common principles and values of the Union, such as solidarity and fairness. The goal is for all member states and all economic sectors to recover from the crisis, avoiding an asymmetric recovery of the Union that could jeopardize its future. Addressing the consequences of the COVID-19 pandemic is a significant challenge but also an opportunity for a turnaround. Returning to the pre-crisis status is not an option, as we strive for the progress of Europe beyond recovery. Of course, we are aware that ambitious goals lie ahead, and within the Conference on the Future of Europe, citizens will express where they see the future priorities of the European Union.
The Commission has come up with a completely different approach to the budget. What are the new developments it was forced to respond to due to the coronavirus crisis?
– Yes, our services reacted quickly and prepared comprehensive recovery measures that will mostly be implemented based on a new instrument called ‘Next Generation EU’. This instrument is worth €750 billion, of which €500 billion will be non-repayable aid to the hardest-hit member states and sectors, while €250 billion will be loans. There are three pillars of the instrument: the first is to support member states’ recovery measures, the second is to encourage private investments and support companies in difficulty, and the third is to strengthen key EU programs and the resilience of the single market while accelerating the green and digital transition. When we add the amounts of the ‘Next Generation EU’ instrument and the increases in the new budget proposal, we are talking about €1.85 trillion for recovery. This is the largest amount in the history of the EU’s multiannual financial frameworks.
Investments are the foundation of progress, and many companies rely on Union support. What awaits them after the budget proposal is accepted?
– Exactly, investments give momentum to the economy and create new jobs. That is why we proposed increasing the ‘InvestEU’ program within the new European budget by an additional €15.3 billion, which should stimulate private investments of over €240 billion. The suitability of this program has already been demonstrated in the implementation of the European Fund for Strategic Investments and financial instruments introduced after the last financial crisis. The Commission has also proposed a new component of the ‘InvestEU’ program – the Strategic Investment Instrument – to increase Europe’s resilience by building, as the name of the instrument suggests, strategic autonomy in vital supply chains, including the key ones – the green and digital transition.
You mention the green transition in budget planning. The European Green Deal is indeed part of the priorities of the new European Commission. What are its goals?
– The European Green Deal is our strategy for achieving the sustainability of the European Union’s economy by turning climate and environmental challenges into opportunities across all areas. To be feasible throughout the Union, the EU will provide financial support and technical assistance to businesses and regions that are changing their operations or policies due to the transition to a green economy, as the goal is a fair transition for all. Indeed, a circular economy can bring GDP growth and create jobs, as implementing ambitious measures for a circular economy could increase the EU’s GDP by an additional 0.5% by 2030, which will open around 700,000 new jobs. Therefore, we need a new growth strategy that will transform the Union into a modern, resource-efficient, and competitive economy in which there will be no net greenhouse gas emissions by 2050, economic growth will not be linked to resource exploitation, and no person or region will be left behind.
