In order to rise to the challenge of the unparalleled economic crisis after the Covid-19 pandemic, the European Union launched the 750 billion euros recovery fund “Next Generation EU”. The majority of this fund – 627.5 billion euros – will be allocated by the newly created Recovery and Resilience Facility (RRF). On 10th February 2021, a clear majority supported the necessary Regulation in the European Parliament.

In order to be able to access the fund, Member States are currently drawing up national recovery plans, in which they have to detail the intended use of the facility. However, there are already indications that the majority of funds to ease the recovery, is not being invested in sustainable projects. Hence, there is a danger that the EU will continue to be guided by neoliberal economic maxims, whilst at the same time ignoring social justice and a higher level of environmental compatibility.

Social justice to take centre stage

The current analyses of the recovery plan drafts of individual Member States show that France, for example, intends to spend only 23 % of its budget on social resilience. Germany has allocated only 7 %, and Spain, at 6 %, even less. And yet, the pandemic drastically exposed the negative consequences of decades of neoliberal economic activity for our society, for example, when cuts were made regarding essential public goods such as hospital beds and medical care. This made not only the economy, but also the society extremely crisis prone.

For a sustainable economic system

With their currently planned stimulus measures, Europe’s largest economies will not be able to keep their promise to make our society more sustainable. Within the scope of its national plan, France has only allocated 22 % of funds to the fight against climate change and Germany only 16 %. Spain only plans to spend 11 % on projects which increase environmental compatibility.

Clear demands towards EU Finance Ministers

The recovery plan is the optimal occasion to at last introduce social and green change. However, there is a danger that in spite of clear lessons learned from the coronavirus crisis, short-term economic indicators are still given priority over long-term sustainability. If Member States waste their public stimulus programmes on dubious projects, they obstruct the overdue change and promote the further advance of climate change and social division.

That is why, AK EUROPA together with Finance Watch, ETUC, and other organisations has formulated 5 demands as to how funds within the scope of the recovery plans shall be used:

1. End the support for unsustainable activities that cannot be made sustainable, such as fossil fuels
2. Support people and workers whatever it takes: guarantee living standards for all, and ensure a just transition
3. Invest in the green transition and lay the foundations for an economy based on a resilient production and consumption system
4. Avoid a return to austerity policy, which in particular in the 2008 financial crisis, resulted in many EU Member States suffering from austerity measures
5. Reform the EU Fiscal Framework to provide public households with scope for important investments

Sign the petition now!

The more people support these demands, the louder the call to EU Finance Ministers to rethink the recovery following the Covid-19 crisis. Everyone can sign the petition on rethinktherecovery.org, thereby lending even more weight to the five demands to follow the path of a more socially and environmentally just Europe!

Further information:

Campaign page “Rethink the recovery”

AK EUROPA Position Paper: EU budget powering the recovery plan for Europe

Austrian Chamber of Labour Factsheet: Mit dem Wiederaufbaufonds aus der Krise (German only)

Austrian Chamber of Labour Factsheet: Perspektiven für Europa in der Krise (German only)