Overall the EU’s GDP in 2020 is expected to be 7-16% lower than 2019. The availability of financial resources to promote the recovery varies greatly across the Union, suggesting that, in the absence of a common European initiative, the recovery will be greatly uneven.
Analysts expect this disparity to cause substantial divergence within the Union, and that this divergence would represent an existential risk to the Union as we know it. To bridge these gaps and save Europe’s unity the Commission has come forward in late May with a renewed Multiannual Financial Framework (“MFF”) for the 2021-2027 period and a new €750bn programme called Next Generation EU. €560bn of Next Generation EU will be spent via the Recovery and Resilience Facility (RRF) for which Member States will need to submit spending plans in order to access such EU support.
Despite its best intentions the Commission’s proposal lacks sufficient environmental safeguards if the EU is to meet its climate targets and emerge from this pandemic with a more sustainable and future-proof economy. Although there is mention in the RRF Regulation of “twin digital and green transitions”, a closer look at the proposal shows how the sustainability features of the recovery are largely optional. This lack of stringent criteria allows for industries and governments to invest in fossil fuels, 20th century technologies and environmental degradation, greatly increasing the risks of missing climate-neutrality in 2050.
This paper outlines eight changes that need to made to make Next Generation EU and the MFF truly sustainable.