Proposal for recovery fund and EU budget a breakthrough

Published: 27th May 2020

Today, the European Commission presented a coronavirus crisis recovery package for the EU. The package includes a proposal for the next long-term budget (Multiannual Financial Framework, MFF) and for a new ‘recovery instrument’. The Commission has also suggested using new EU common taxes to fund the recovery.

Marissa Ryan, Head of Oxfam’s EU office, said:

“The proposed recovery package is a breakthrough for a fair recovery and for Europe to lead the global response to the coronavirus. It can help tackle the devastating socio-economic crisis triggered by the pandemic, which has exposed and exacerbated inequality and exploitation, within and beyond the EU.

On the proposed recovery fund:

“A recovery fund based mainly on grants and on common EU taxes is a triumph. It is the right way to fund the recovery through progressive taxation: the most profitable and polluting companies pay their fair share while governments can avoid austerity which would impact the most vulnerable in our societies.

“In addition to the proposed environmental taxes and levies on large multinational and digital companies, the EU should also raise money by taxing the wealthiest individuals and speculative financial transactions.”

On the proposed long-term budget:

“The European Commission is leading the way by proposing more money for development cooperation. The European Union must match this with action to ensure a green recovery from the pandemic which reduces poverty and inequality in the long term.

“The Commission has long been a key partner for the poorest countries in supporting public services that are critical for overcoming the coronavirus, and for empowering women who are hit hardest. The EU should be commended for demonstrating its commitment to human rights and international development.”

Notes to editors

  • Today the European Commission has presented a proposal for a new EU long-term budget of EUR 1.1 trillion and a EUR 750-billion recovery fund.
  • According to the proposal, the recovery fund will be financed by capital market borrowing and will be available to member states through both grants and loans. The capital market borrowing will be repaid by, among others, new EU own resources. They could include an extension of the Emissions Trading Scheme, a carbon border tax, taxes on operations of large enterprises, a digital tax, and taxes on non-recycled plastics.
  • Oxfam advocates for a fair and green recovery plan and long-term budget that support free access for everyone to critical public services such as health and education, include a sizeable budget for development cooperation and are aligned with the EU Green Deal and the bloc’s climate commitments. It should be repaid by common EU taxes (European solidarity wealth tax, Financial Transaction Tax, Common Consolidated Corporate Tax Base, digital service tax and new environmental taxes).
  • On 15 May, the European Parliament voted the resolutionNew MFF, own resources and Recovery plan”, asking for a EUR 2-trillion coronavirus recovery package based on additional EU own resources, among them new common taxes including a Financial Transaction Tax and the Common Consolidated Corporate Tax Base.
  • The EU’s budget for external action is summarised under heading 6 of the long-term budget proposal – “Neighbourhood and the World.”

Contact information

Florian Oel | Brussels | | office +32 2 234 11 15 | mobile +32 473 56 22 60

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