This week the European Commission unveiled a proposal for a €750bn recovery plan after Covid-19.
Cooperatives Europe gave a positive reaction to the plan, which includes a new recovery instrument, Next Generation EU, embedded within a revamped long-term EU budget.
The Next Generation EU package of grants and loans, coupled with targeted reinforcements to the long-term EU budget for 2021-2027, would bring the total financial firepower of the EU budget to €1.85tn.
Under this proposal, the Commission can use its credit rating to borrow €750bn from the financial markets to finance its spending. This will be repaid over a long period of time throughout future EU budgets – not before 2028 and not after 2058.
Commission president Ursula von der Leyen said: “The recovery plan turns the immense challenge we face into an opportunity, not only by supporting the recovery but also by investing in our future: the European Green Deal and digitalisation will boost jobs and growth, the resilience of our societies and the health of our environment.
“This is Europe’s moment. Our willingness to act must live up to the challenges we are all facing. With Next Generation EU we are providing an ambitious answer.”
Commissioner Johannes Hahn, in charge of the EU budget, said: “Our common budget is at the heart of Europe’s recovery plan. The additional firepower of Next Generation EU and the reinforced multiannual financial framework will give us the power of solidarity to support member states and the economy. Together, Europe will arise more competitive, resilient and sovereign.”
Estimates show that tourism, the social economy and the creative and cultural ecosystems could see a more than 70% drop in turnover in the second quarter of 2020.
Cooperatives Europe welcomed recognition that the social economy – including co-operatives as key actors – is taking huge financial blow from the pandemic. The trade body, which represents co-ops across the continent, is surveying members to find out how they have been impacted by Covid-19.
According to Cooperatives Europe, the proposal should address the immediate economic and social damage brought by the Covid-19 pandemic and kick-start a sustainable recovery, in line with the European strategic priorities, such as the European Green Deal and Digital Agenda.
But it adds that co-operatives, as competitive enterprises active in competitive markets, are affected in all sectors with activities not exclusively limited to social prospects.
Cooperatives Europe said: “A strong social economy can offer unique opportunities to help most vulnerable (but not exclusively) to return to the labour market”, including young people.
It also argued that the package should ensure a stable, long-term funding source accessible to all economic actors and the specific structure of co-operatives should not be an obstacle to benefit from the funding support instruments put in place for helping businesses recover from the crisis. The apex believes the SME strategy and the upcoming Action Plan for the Social Economy should be fully part of the recovery.
Cooperatives Europe’s director, Agnes Mathis, said: “The Commission’s initiative is a strong signal given that when acting in solidarity, the European Union can provide support and ensure a sustainable economy and social development for the future. The crisis put forward the necessity to support local and sustainable production and to ensure essential social services. This is the reason why people-centred enterprises such as co-operatives should be fully part of the recovery tools.”