Thursday

19th Oct 2017

Brussels doubles emergency funding to EU economies

  • After tackling the immediate problems in the financial sector, the EU executive aims to deal with the knock-on effects to the economy (Photo: EUobserver)

The European Commission has unveiled a draft version of its plan for the economic recovery of the European Union, a plan that includes an even more generous boost to the emergency fund for EU economies battered by the global financial crisis than had previously been proposed by French President Nicolas Sarkozy.

"Europe must confront the economic downturn with the same robust and coordinated approach we have taken on the financial crisis," commission President Jose Manuel Barroso said on Wednesday (29 October), after an extraordinary college meeting devoted to the ongoing market mayhem.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

As part of the commission's plan - to be published at full length on 26 November - Brussels is proposing to more than double the existing financial facility used to provide loans to EU countries facing difficulties.

The fund's ceiling currently stands at €12 billion. The commission is now suggesting it should be topped up to €25 billion. On Tuesday night, French President Nicolas Sarkozy, whose country holds the EU's six-month rotating presidency until the end of December, had proposed a limit of €20 billion.

Budapest is so far the only EU capital that has recently put in a request for some of the bloc's emergency lending, but EU economy commissioner Joaquin Almunia has indicated that more countries could follow suit.

"We know some other members of the EU are under stress in the financial markets and we are ready to act," he said.

Other measures

Other measures proposed by the commission for Europe's economic recovery mainly include the deployment of existing instruments within the bloc's budget.

"We must keep unemployment to the absolute minimum and support those who have lost their jobs. We will review how we can reinforce the effectiveness of the globalisation adjustment fund," said Mr Barroso.

He referred to the fund, worth €3.5 billion between 2007 and 2013, that is designed to help workers whose employers have moved to other states outside Europe in search of cheaper labour and production costs. But so far, the fund has not been used to an enormous extent by the bloc's member states.

The commission is also promoting a link between the current financial needs to boosting public investments and the EU's green agenda.

"Investment in energy efficiency in buildings can provide the opportunities for the construction sector while contributing to tackle climate change. We also need to look at other areas of green technology - for example cleaner cars," insisted Mr Barroso.

But the European Socialist Party quickly responded with criticism of the commission's "unambitious recovery plan" suggesting "It is far too little for the scale of the crisis we are facing."

"Events - including national government actions - are moving faster than the European Commission. It needs to act now if it is going to co-ordinate, and create synergy between, national government recovery plans," said the party's president, Poul Nyrup Rasmussen.

Construction, automobile and textile industries are expected to be hit the hardest by the global credit crunch that first broke out last summer in the US and which is due to lead to the loss of 20 million jobs worldwide, according to the International Labour Organisation.

Analysis

Juncker's euro-push could risk unity, warns eastern flank

The EU Commission chief hopes that as Emmanuel Macron pushes for euro area countries to integrate further creating a multi-speed Europe, central European members will be more inclined to join the single currency. Are they?

News in Brief

  1. EU summit moved to previous building after fumes scare
  2. Catalonia will 'not back down'
  3. New toxic incident in EU building ahead of summit
  4. Murdered Malta journalist's family invited to Parliament
  5. EU food safety chief denies keeping studies 'secret'
  6. EU states pledge 24,000 resettlement places so far
  7. US ready for arms sale to update Greece's F-16 fleet
  8. Austria's Green leaders step down following election failure

Stakeholders' Highlights

  1. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  2. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  3. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  4. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  5. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  6. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  7. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  8. CECEE-Privacy Regulation – Hands off M2M Communication!
  9. ILGA-EuropeHealth4LGBTI: Reducing Health Inequalities Experienced by LGBTI People
  10. EU2017EEEHealth: A Tool for More Equal Health
  11. Mission of China to the EUChina-EU Tourism a Key Driver for Job Creation and Enhanced Competitiveness
  12. CECENon-Harmonised Homologation of Mobile Machinery Costs € 90 Million per Year

Latest News

  1. EU okays Privacy Shield's first year
  2. EU seeks to decrypt messages in new anti-terror plan
  3. EU agencies defend research ahead of glyphosate vote
  4. Spain points at elections as exit to Catalan crisis
  5. How EU can ensure Daphne Caruana Galizia's legacy survives
  6. Juncker dinner to warm up relations with eastern EU
  7. Court hearing in MEPs 'private' expenses battle
  8. The unbearable lightness of leadership