Real Economy: Europe redeploys funding firepower to fight COVID-19
date: 20/05/2020
Exceptional times, however, call for exceptional measures and in an effort to help Member States cope with the health and economic emergency, €54 billion of the fund has recently been redistributed to cope with the crisis. The money, which has been taken from unused reserves or distributed earlier than planned, will go towards healthcare spending, like masks or hospital equipment, short-term employment schemes, and to companies, so they can pay staff. Economist Thomas Wieser, who was at the heart of emergency meetings during the euro area crisis, spoke with Euronews' Efi Koutsokosta about the current health and economic emergency facing the EU. Wieser believes that a net transfer of resources on the order of about 2% of GNI is a precondition for the post pandemic recovery to take hold. He fears, however, that all of the additional headroom in the EU budget could be taken up in order to provide loans to Member States or regional entities in Member States. According to Wieser, reallocating some of the remaining structural and cohesion funds will also not improve unity among Member States as there is absolutely no correlation between receiving very large sums out of the EU budget and feelings of European solidarity or cohesion.