The European Union’s rollout of its recovery fund has lost so much urgency. French Finance Minister Bruno Le Maire raises the alarm at the risk delay poses to the region’s rebound from the pandemic.
The 750 billion-euro ($890 billion) plan is “not on the right track,” he told Francine Lacqua in a Bloomberg Television interview.
This marks Wednesday’s Group of 20 meetings. He added that he’s “deeply concerned” at the slow implementation of an initiative first agreed in July last year.
“If we want a strong economy, we need to invest, and invest right now,” Le Maire said.
The remarks suggest a public escalation of worries in some European capitals at progress on a measure intended to be a game-changing fiscal tool.
This can fuel the region’s economic pickup by jointly issuing debt.
The ratification of that fundraising has been patchy; however, it is even blocked pending a court ruling in Germany.
“We are in April 2021, and once again, I have not seen any single penny, and the 27 member states have not ratified the decisions on the own resources,” Le Maire said.
Recovery-fund spending plans also face convoluted bureaucracy from the EU, whose botched vaccine rollout already led to extended virus restrictions.
Mounting concern that the region’s economy is lagging other industrialized nations.
It was further fueled by the International Monetary Fund’s forecasts on Tuesday.
This is highlighted increasingly diverging outlooks as the U.S. economy looks to shake off the coronavirus crisis faster than Europe.
While the Washington-based fund raised its growth forecast for the euro region this year slightly to 4.4%, that rebound is being quickly outpaced across the Atlantic.
IMF officials now reckon U.S. expansion will amount to 6.4%.
European Central Bank officials have also shared concern at the possibility of delay in the EU stimulus tool. This isn’t scheduled to hand out money until at least June.
While not directly comparable, the $1.9 trillion U.S. fiscal package is already being disbursed.
Le Maire suggested that the EU governments show less resolve on the recovery fund than they first did when it was agreed upon last year.
“I just want to urge all the European member states to come back to the spirit of 2020 and to reignite the impulse that we have been able to give to the European recovery in 2020,” he said.
“Let’s come back to this spirit of solidarity, of determination, of willingness to have a quick economic recovery everywhere in Europe.”
France Economy Could Outperform Others
The recovery will continue after 2021, still driven by consumption despite a likely deterioration in the labor market situation.
And therefore confidence, following the reduction in support measures.
Fiscal policies should continue to support the economy at both the European and national levels.
This is driven by the context of the 2022 presidential elections.
In which Emmanuel Macron will seek re-election despite a disappointing reform record due to the pandemic. We expect GDP growth of 3.1% for the full year 2022.