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500 billion The euro fund has been presented aloud as an act of European solidarity from the start. On Wednesday, the European Commission added € 250 billion to this impressive amount, to be distributed to Member States in the form of grants. which will reach the beneficiaries in the form of credits.
Regarding the 500 billion euros, it is emphatically reiterated that there will be no need to return that money, as if the capital markets had donated that amount to the European Union. Of course, it will have to be returned. Only this will be done from a common boiler in the EU, which in turn must be completed by members of the community.
Therefore, the question of the distribution of subsidies and the burden of paying the credit will inevitably arise. It was carried out by the European Center for Economic Research (ZEW) in Mannheim, trying to calculate who would ultimately have the winner of this economic recovery plan and for whom this act of European solidarity would be particularly costly.
Poland and Romania would be contributors to the surplus
Everything would depend on the key to allocate the burden of money and debt, which in turn would depend on the chosen and agreed criteria, according to an unpublished analysis from the Center for European Economic Research (ZEW) available to Die Welt.
Financially, the pampered eastern members of the Community so far may be surprised: they may find themselves in an unusual role as payers rather than receivers, having coped relatively well with the pandemic, the German newspaper Die Welt wrote repeatedly in recent days.
If the fund were to be distributed solely on the basis of the country’s economic downturn, “Poland would be particularly disappointed, which, despite consistent and successful efforts to reach the richest countries in the Community economically, is still among the most Poor. Under this distribution key, Poland would be in second place among the fund’s surplus payers, just after Germany. It should contribute 10.4 billion to the fund. more than they would receive from Brussels, “writes the newspaper Die Welt, according to a analysis of the Center for European Economic Research.
Poland’s net contribution would be almost 2%. GDP In Romania, the second poorest country in the EU, the net contribution would be € 2.6 billion. EUR, or 1.16%. Economic production from the previous year.
The countries of central and eastern Europe would not agree with this form of distribution.
Germany would have to pay 23.5 billion. Net contribution in euros. The most economically powerful EU country would contribute a total of € 130 billion to the fund. Consequently, German taxpayers would bear the greatest financial burden of this economic recovery plan.
Under this distribution key, almost all EU members would be net contributors. And the beneficiaries would be the countries of southern Europe and France. This means that not only Poland and Romania, but also other Central and Eastern European countries should pay more than they would receive.
Although they have benefited from large payments from the EU budget for many years, it is hard to imagine that they accept this form of redistribution at the EU level now, writes Die Welt.
Already last week, some of these countries promised to defend their interests. Suppose Poland declares that money should go not only to the most affected countries, as demanded by southern Europeans and France, but also to the most affected sectors, a subtle difference that Merkel and Macron were quick to include in their proposal.
Unemployment rate: as a criterion for the allocation of funds?
Eastern Europeans are interested in including another criterion, the growth of the unemployment rate, as it would allow them to reduce the contribution burden, Friedrich Heinemann, head of the division of public finance economics at the Center for Economics, told Die Welt European Economic Research (ZEW). “But that would mean less money for southern Europeans,” he said.
The economist calculated how the fund’s benefits for countries would change if 80 percent of the key distribution coefficient were caused by the economic downturn and 20 percent by rising unemployment.
In this case, Bulgaria and Croatia would be the most benefited. Among the top 10 winners would be the countries of the former eastern bloc, along with Spain, Italy and Greece: Lithuania, Latvia, Hungary, Romania and Estonia. Poland would also receive 1.07 billion. More than paid.
Spain (24.2 billion), Italy (19.2 billion) and Greece (4.9 billion) received the highest net income.
Furthermore, including the unemployment rate in the fund’s eligibility criteria would leave only 10 net contributors, including Sweden, Austria and Denmark, at € 4.67 billion and € 4.4 billion, respectively. and 3.9 billion. net contributions Germany’s net contribution would no longer be € 23.5 billion, but € 38.6 billion. euros and would increase by up to 64 percent.
“Including the unemployment rate as a criterion is not a problem,” said the author of the analysis, economist F. Heinemann. “It is punishing countries like Germany that (in a pandemic) have protected their labor markets with full short-term benefits.”
Those who best dealt with the coronavirus crisis should not be punished
Voices of dissatisfaction were already heard in Warsaw and Prague on Tuesday, so before Ursula von der Leyen announced her 750 billion. euro recovery plan, wrote Die Welt.
Poles, Czechs and Slovaks coped with the coronavirus crisis better than Western European countries: immediately after the first infections in the country introduced the use of masks, a set of extremely strict quarantine measures that prevented the spread of the virus. “As quickly and radically as in the East (of the European Union), there has been no response anywhere else in Europe,” praised Die Welt.
Therefore, it is understandable that if these countries do not want to pay for their success now, not to mention a noble argument, in the name of solidarity. “We do not want to be beaten for facing the crisis better than others,” Czech Prime Minister Andrei Babish replied on his Twitter account.
“Solidarity is a mutual problem,” Bartlomie Radziejewski, head of Nowa Konfederacja, a conservative forge of ideas in Warsaw, told Die Welt. “We can demand solidarity on energy or transportation issues that are important to us.”
In his opinion, the economic recovery plan should be seen as an opportunity to strengthen European solidarity. However, for Poland, Hungary or the Czech Republic it is clear first of all that their approval can only be expected on their own terms.
It is already clear that the division of money and the distribution of the debt burden will lead to disagreements and disagreements that must take into account many truly delicate aspects. In the end, it would not happen in the same way as in that Lithuanian folk tale about a smart fox, when “a heartbeat is undefeated.”
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