Europe’s financial ‘bazooka’ not big enough for post-COVID recovery – Sant

Labour MEP Alfred Sant has told the European Parliament that the EU was “grossly underestimating” the medium-term impact of the COVID-19 pandemic and that there is little to no safety margin in resource measures to compensate for this.

Although he voted in favour of a resolution in the European Parliament on the EU’s coordinated action to combat the COVID-19 pandemic and its consequences, Sant expressed a number of reservations following a plenary debate addressed by the President of the European Commission Ursula von der Leyen.

The resolution, which was adopted by the Parliament, calls on the European Commission to propose a massive recovery and reconstruction package for investment to support the European economy after the crisis, beyond what the European Stability Mechanism, the European Investment Bank and the European Central Bank are already doing.

The EU was “likely underestimating the ripple effects resulting from the economic downturn as well as its actual extent, even if the public health situation improves overall according to the available best-case scenarios,” Sant added.

He said the so-called north-south controversy, in which Italy and Spain have accused northern nations – led by Germany and the Netherlands – of not doing enough to combat the pandemic, was obscuring the probability that, contrary to the 2008 financial crisis, knock-on and knockdown effects will this time swing from south to north, vice-versa, and back, since both production and demand have been hit deeply within our single market which over the last ten years, has become increasingly services oriented.

“The financial ‘bazooka’ being used on a European level is not impressive enough, even if added to the national efforts by member state governments, especially when compared with that of the US. Moreover the way it was negotiated and agreed betrays the lack of a common vision regarding the objectives that are being set,” Sant said.