07.04.2020 - European Green Deal: An Economic Stimulus During a Time of Crisis
GLOBSEC, in collaboration with Europe Jacques Delors, had the pleasure of organizing 'European Green Deal: An Economic Stimulus During a Time of Crisis ' webinar taking place 7 April, 15h00 on the online ZOOM platform. This online event was the first in our new series of ‘Europe in a New Decade’ dialogues exploring themes of critical importance for the future of Europe and related to the geopolitical objectives of the European Commission. Outlining four critical priorities, we aim to strengthen the communication between European leaders and CEE countries through this interchange.
The online event took place on 7 April 2020 and you can watch the debate here.
- Siegfried Muresan, Member of the European Parliament, Financing European Green Deal Rapporteur
- Emma Navarro, Vice-President, European Investment Bank
- Geneviève Pons, Director-General of Europe Jacques Delors
- Marius Vascega, Head of Cabinet, Commissioner Virginijus Sinkevičius for Environment, Oceans and Fisheries
- Moderated by Vazil Hudak, Vice Chairman, GLOBSEC
The discussion tackled the European wide response to the unfolding economic crisis created by COVID19 and the role played by the European Green Deal and the future Multiannual Financial Framework in recovery.
- Crisis is testing solidarity between member states and societies, which will be needed not only to recover but to achieve a socially inclusive and just clean energy transition.
- European Green Deal is a growth strategy for businesses with the capacity to create jobs and stimulate economic activity.
- Post COVID-19 economic recovery must move us forward to a new normal, not reanimate the old inefficient and fossil intensive elements of the economy that will become stranded assets.
- Mainstreaming sustainable investments into green infrastructure (buildings and transport) and circular economy.
- Minority voices using the crisis as a pretext to weaken or abandon climate measures are growing louder, but the overwhelming majority in EU institutions remains committed to tackling climate change and the agenda will be pushed forward.
- There is a link between ecological and sanitary crises caused by environmental degradation and climate change e.g. deforestation, urbanization.
- In the long run, R&D and public-private dialogue should exploit climate and health synergies in an area such as energy efficiency and digitalization.
The coronavirus crisis is a shock to the world and the European Union. The most significant focus of the European Commission during this era is coordination in organizing the fight against the pandemic outbreak and a commitment to the protection of lives and livelihoods. A number of actions have been taken to regulate the economic effects of the coronavirus. The area of health crisis organization and economic management will require a continuous evolving response.
The Commission is in active coordination on all fronts, working with member states to boost spending across sectors and finding ways to incorporate the European Green Deal agenda in the recovery:
- Working on a post-COVID stimulus package and seeking to front-load the EU budget to open spending for beneficiary member states.
- While the exit strategy is fluid and reactive, the recovery plan should be carefully considered to lock in sustainable economies.
- Green Deal supports the growth of inclusive sustainable societies, emphasizing the role and opportunities within a circular economy.
- Recovery plans should adopt learned lessons and follow the advice of scientists.
- EU should be more self-sufficient creating jobs across the value chain and diversifying industry.
European Parliament Perspective
In the epoch of the COVID-19 outbreak, it has become apparent that the institutions of the European Union have many issues to confront simultaneously. As economic crisis looms, issues of migration and the refugee crisis remain and the health crisis challenges daily life. Parliamentary leadership holds great responsibility to reform and implement goals in a maintained and sufficient response.
- EU has not performed well in the face of crisis: from the 2008 recovery to the 2015 migration crisis, derailed by 2016 Brexit, they all distracted European leadership at the highest level.
- Climate momentum was building after EU elections, so it is important that this crisis does not distract from the urgent climate and biodiversity challenges we still face.
- Third countries are always looking to exploit fissures within the bloc when the EU is in crisis mode.
- EU must perform better in crisis management and address urgent issues like health and climate together.
- Success or failure of the Green Deal will be determined by funding made available to meet estimated EUR 200 billion/year of investments until 2030 for the energy transition The multi-annual financial framework (MFF) can be part of the solution, but will not be enough on its own.
- From the beginning, the European Parliament has supported a larger MFF to fund Commission’s priorities, while the Commission has leaned towards the Council’s conservative proposal.
- Current Commission MFF proposal from 2018 is too tight, leaving no margin for error to respond to unforeseen crises certain to occur over any 7-year period.
- Budget compromise should include a reserve MFF envelope only to be used in emergency situations for crisis management.
- JTF should be less about social mobility and focus more on investing in green business and innovation in the affected communities to create sectoral opportunities so people do not have to relocate.
- As far as sustainable finance is concerned, EU institutions need to create clarity and predictability for long term investments.
- The energy mix is a national competency and some countries can’t exit both coal and gas; gas will be transitionary.
- MFF resolution is needed promptly to provide certainty to beneficiary member states, but an agreement now during the Croatian Presidency could misread and misdiagnose the emerging situation.
- Contingency should be a one-year (2021) emergency budget allowing for proper assessment of the post-COVID landscape to prioritize sectors in the long term MFF accordingly.
European Investment Bank (EIB) Perspective
The EIB echoes the remarks on a need for a European response to COVID-19 and strongly endorses a directed cross-sectional focus in taking measures to mitigate the economic effects crisis.
- The EIB is prepared to take actions in cooperation with the European Commission to boost short term liquidity, while also remaining committed to long term climate ambitions.
- EU climate commitment is entrenched with legislation being passed.
- EIB will increase its climate lending to 50% by 2025 while working to align all actions with the Paris Agreement.
- The Bank is already set to contribute massive financial loans and instruments towards a low carbon future.
- EIB launched a package of EUR 40 billion for SMEs to receive loans, flows of capital, etc. which is not typical for what is normally long-term investor – providing guarantees for partners to meet challenges of the crisis.
- Not bailing out companies, but providing liquidity to banks and making sure SMEs benefit while sticking to the same environmental standards.
There is a strong basis of common perspective shared among the representation of the panel and there is a strong lesson in solidarity to be taken from the crisis period. The expertise of leadership must be recognized and coupled in orchestrating the most efficient response to this collective challenge.
- In summary, there is a consensus among vantage points of political leadership – this health crisis comes first, we are testing solidarity and other priorities cannot be forgotten – and highlighted priorities for a green and quick recovery.
- The commission needs to be steadfast in incorporating priorities of EGD in the recovery plan.
- EIB needs to continue with the climate roadmap on a sustainable action finance plan for private investment.
- Green Deal is meant to effectively rethink the model of development, which applies to the current situation.
- Civil society needs to remind leaders and policymakers that recovery should be a smarter path to a better world and new normal with solidarity accentuating the social and environmental aspects of development.