Tuesday

18th Jan 2022

EU defends recovery plan

  • "Let's not all the time be ashamed of what we have in Europe," Mr Barroso (l) said (Photo: Council of the EU)

The recovery plan agreed by the EU last year is sufficient to fight the economic crisis despite what its critics say, the European Commission and the EU Czech Presidency said ahead of an EU summit.

"I think that at the moment, we have gone as far as we can in preparing the European Economic Recovery Plan," Czech Prime Minister Mirek Topolanek said at a press conference after meeting with European trade union and business leaders in Brussels on Thursday (19 March).

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The debate with the groups - in Brussels parlance, the 'social partners' - is designed to prepare for a special social affairs summit in Prague on 7 May and comes hours ahead of a regular EU leaders' meeting in the EU capital on Thursday and Friday.

"There is a crisis of confidence and I think if we came on with some kind of permanent action, activism, that wouldn't install confidence. We have to implement what's been decided now and assess the impact thereof."

The EU committed €200 billion in a recovery plan last year (around 1.5 percent of GDP). But it says that in reality, it is to spend about €400 billion (around 3.3 percent of GDP) in 2009 and 2010, including non-discretionary public spending or "automatic stabilisers," such as unemployment benefits.

Mr Topolanek's comments come as the EU faces increasing pressure to boost its plan.

American Nobel-prize-winning economist Paul Krugman earlier this week said it would need to spend around €500 billion this year and up to a trillion in total over the next three years to get the economy going again.

Speaking at the same press conference as Mr Topolanek, European Commission President Jose Manuel Barroso argued that the existing European rescue package should be given a chance.

"Let's implement it and then of course let's keep it under review," he said.

"If the message we send to our public is that our plan is not enough, that will not create confidence. We believe it's a very important effort the one that we've already decided. Let's concentrate on it and let's not all the time be ashamed of what we have in Europe," he added.

He stressed the EU's social provisions are "much stronger than any other part of the world," such as the US or Asia.

'Social deal' needed

The Prague job summit will aim to tackle the social consequences of the economic crisis, notably the soaring unemployment levels in the EU, which, across the bloc, hit 7.6 percent in January.

Representatives of both EU trade unions and businesses on Thursday said they expected the Prague event to be "a success."

Expectations from this summit will be high, John Monks, general secretary of the European Trade Union Confederation (ETUC) said, calling on the EU to be "ambitious" and adopt "a new social deal."

"The EU already has successfully done ... a bank rescue in a co-ordinated way. It's done a recovery plan and I think now it needs a new social deal as a third phase that needs to be worked up."

In France, a general strike on Thursday in protest at the government's handling of the economic situation saw hundreds of thousands of people hit the streets, according to first estimates.

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