EU budget at the core of leaders’ summit: loans, grants or both?

Before you start reading today’s edition of the Capitals, feel free to have a look at the story “Industry calls for 10% ‘renewable gas’ target in Europe“, by Frédéric Simon.

To stay up-to-date on everything to do with the coronavirus across the capitals, feel free to check out EURACTIV’s comprehensive overview, which is regularly updated with the help of our network of offices and media partners.

EU INSTITUTIONS

Farm to fork strategy delayed by couple of weeks, not months. European Commission vice-president Frans Timmermans assured MEPs that the new EU Food policy and biodiversity strategy might be delayed by several weeks but no longer, after the launch was pushed back until 29 April. Gerardo Fortuna has the detail.

Αlso read: Commission backtracks on intervention measures in agri-food markets

PARIS | LISBON

Ahead of a crucial EU Council meeting today (23 April), a high-ranking French source told EURACTIV France: “We are not at all out of the health crisis.”

“We need an amount representing 10% of the EU’s GDP, which is the amount that Germany has put on the table to support its economy. For the EU, this would amount to about €1.5 trillion,” the source added.

An EU diplomat told EURACTIV.com that according to the latest talks, the EU will borrow money from the markets and pour it into the EU budget. The big question is how this money will be distributed to member states – in the form of long-term loans, grants or a combination of the two.

In Lisbon, Portuguese PM António Costa said on Wednesday (22 April) that Portugal needs to know whether the EU’s post-coronavirus economic recovery plan would offer “a slingshot or a bazooka”.

Lusa reported that Costa stressed that some funding should be from the issuance of joint European debt, and that distribution among member states is crucial. “Our response is that this transfer should be secured […] through the transfer of grants and not loans, although we cannot exclude, and let us not exclude, that for some programmes … loans may be the appropriate form,” he added.

The EU diplomat also added that it’s possible that the so-called “budget corrections” will be phased as the EU’s own resources system is modernised, an issue raised yesterday by the socialist group in the European Parliament.

The French source was not against the idea of the EU increasing its own resources, but initially rejected the idea “because it is urgent, we can agree at 27 to issue debt which will be common, but when it comes to deciding on a carbon tax or the tax on financial transactions, things become more complicated.”

Europe’s south wants flexibility in the EU budget when it comes to money transfers among different files, as well as a single market that not only works for goods but also for free movement, which will be crucial for this summer’s holidays.

Read more

(Luísa Meireles and Maria de Deus Rodrigues, Lusa.pt | Aline Robert, EURACTIV.fr | Sarantis Michalopoulos | EURACTIV.com)

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BERLIN

Germany releases deficit expectations. On Wednesday (22 April), the government cabinet adopted the German Stability Programme – its assessment of public finances to be given to the Commission. The report estimates a 7.25% GDP deficit, as well as a debt-to-GDP ratio which, due to the increased spending measures to combat COVID-19’s impact, will increase from 58.9% to 75.25% for 2020.

The report was written during the early stages of the COVID-19 crisis, and is, therefore, “currently subject to very high uncertainties.” The German government will also release its economic development projections for spring, which provide the basis for the country’s budget calculations, on 29 April with more up-to-date data.

Meanwhile, all German states have now announced new rules requiring protective masks in public transportation and shops. On Wednesday, the remaining states announced new requirements that will go into effect on Monday (27 April), but exact plans vary from state to state. (Sarah Lawton | EURACTIV.de)

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HELSINKI

Olli Rehn does not warm to Eurobonds. Ahead of the European Council meeting, Olli Rehn, the governor of the Bank of Finland was careful not to give his support to Eurobonds at a press conference in Helsinki on Wednesday. At the beginning of April, however, the former EU Economics commissioner told Bloomberg in an interview that ‘corona bonds’ could be an option. EURACTIV’s Pekka Vänttinen digs deeper.

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VIENNA

Corona-contact-tracing app to become open source, stay voluntary. While Austria’s corona-tracing-app is, in its current form, purely based on voluntary use, a senior conservative politician of the governing ÖVP suggested making it mandatory, prompting Chancellor Sebastian Kurz – of the same party – to confirm that it would stay voluntary.

In its analysis of the app, NGO Epicentre.Works concluded that it follows a “privacy-by-design” approach, but also demanded that its source code be made public. Austria’s Red Cross, which administers the app, has promised to do that in the coming days. (Philipp Grüll | EURACTIV.de)

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BRUSSELS

Expert group leak on Belgian lockdown phase-out. Belgian experts tasked with devising the country’s lockdown exit strategy have proposed reopening some shops, partially relaxing some restrictions on gatherings and outdoor activities from 3 May and resuming school from 18 May, according to draft recommendations obtained by Le Soir. Alexandra Brzozowski has the details.

UK AND IRELAND

LONDON

Social distancing for the rest of 2020. Social distancing will be needed until at least the end of the year to prevent fresh outbreaks of coronavirus, the government’s chief medical officer said on Wednesday (22 April). Read more.

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DUBLIN

‘Second wave’ caution. The Irish government is planning cautiously for a recovery strategy amid concerns that a ‘second wave’ of the coronavirus may hit other nations across the globe. Samuel Stolton reports.

EUROPE’S SOUTH

ROME

Pope Francis prays for EU unity. In the run-up to today’s EU summit, Pope Francis called for the bloc to rediscover the fraternal unity which Europe’s founding fathers dreamed of. “In these times, when so much unity among us is needed, let us pray today for Europe,” he said, starting the daily morning Mass on Wednesday (22 April). The day before, he had a 45-minute telephone conversation with French President Emmanuel Macron to discuss the COVID-19 response. (Gerardo Fortuna | EURACTIV.com)

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MADRID

Poor management and lack of foresight. The Spanish government has been repeatedly criticised for its management of the COVID-19 health crisis and lack of foresight, with the latest rebuke regarding the rules for children going outside. Opposition political parties accused the government of ‘improvisation’ despite the executive adhering to expert recommendations and WHO guidelines. EURACTIV’s partner EFE reports.

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ATHENS

Government under fire. Main opposition Syriza party wants Greek PM Kyriakos Mitsotakis to dismiss two ministers responsible for a “fiasco” voucher program aimed at helping the country’s scientists amid the COVID-19 crisis.

Scientists and professionals were supposed to receive financial support of €600 as part of the pandemic crisis measures but they must first go through an e-learning scheme to get the €600-voucher. However, the e-learning scheme is full of misspellings, errors and offers little value to scientists. The opposition claims that almost half of the €192 million package went to government-friendly “intermediaries” to set up the e-learning scheme, which ended up being a “fiasco”.

Mitsotakis abolished the program yesterday, saying scientists could receive the money without going through the scheme. Analysts in Athens estimate that the issue will trigger political developments in the government “soon”. (Sarantis Michalopoulos)

Greece-UK deal. Greece and the United Kingdom signed a collaboration agreement on Wednesday for information exchange and close cooperation of their border police and justice system to tackle the migration crisis. Read more on Athens-Macedonian News Agency.

VISEGRAD

WARSAW

Poland ranks lowest in World Press Freedom Index’s 18-year history. “The authorities’ efforts to subjugate the judicial system”, as well as “the growing tendency to penalise defamation” justified Poland’s spot in the ranking, according to Reporters Without Borders.

The group also wrote that “state media are full of hate speech,” adding that public service media “have become a propaganda tube for the government”. Since being ranked at 18th in 2015, Poland’s position has since been dropping each year. (Natalia Pazura | EURACTIV.pl)

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BRATISLAVA

EU farm subsidies fraud investigation. In an operation called ‘The Grazier’, the National Criminal Agency arrested on Wednesday (22 April) the former head of the Agricultural Payment Agency (PPA) Juraj Kožuch on suspicion of fraud involving agricultural subsidies, which the agency oversees and distributes.

Kožuch was replaced as the director of the agency following the arrival of the new minister but moved to a high ranking position within the same agency. In 2018, Kožuch appeared before the European Parliament’s Budget Committee, where he tried to explain problems with farm subsidies in Slovakia. This issue became the focus of attention after the murder case of journalist Ján Kuciak, which led to anti-corruption protests that brought down the government of long-time prime minister Robert Fico two years ago. (Zuzana Gabrižová | EURACTIV.sk)

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BUDAPEST

€4.2 billion in financial support The Hungarian Development Bank has announced a €4.2 billion support package for businesses in the form of loans, guarantees and equity injections, which is part of the country’s economic stimulus plan announced by PM Viktor Orban earlier this month, which aims to mobilise 18-20% of the GDP.

The package aims to alleviate liquidity problems, protect jobs, incentivise investment and innovation as well as keep domestic ownership of Hungarian enterprises, the financial institution said in a statement on Wednesday (22 April). (Vlagyiszlav Makszimov | EURACTIV.com)

NEWS FROM THE BALKANS

SOFIA

Record number of people contaminated. On Wednesday (22 April), Bulgaria counted 66 new confirmed cases of Covid-19, the largest increase in a single day. This brings the total number of confirmed cases to 1081. The total number of people hospitalized is 262, of them 37 are in intensive care. The total number of deaths is 52. Slovakia and Bulgaria have the lowest numbers of Covid-19 cases in the EU. (Georgi Gotev)

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BUCHAREST

First steps towards restrictions ease. From 15 May, Romania will potentially start lifting personal movement restrictions. President Klaus Iohannis said that people will be able to move without having to declare their destination after 15 May once the current state of emergency ends, but other restrictions will continue to apply for some time. Wearing protective masks could also become mandatory in closed public areas and when taking public transport at least until the end of the year.

As of Wednesday (22 April), Romania registered 9,710 cases of coronavirus (up 468 cases compared to the day before) and 524 deaths. However, more than 2,400 recovered and were discharged from hospitals. (EURACTIV.ro)

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LJUBLJANA

Slovenian athletes return to stadium training…alone. Track and field athletes in Slovenia, who had been on lockdown and stopped all activities for the past month, have resumed open-air training in stadiums, in accordance with social distancing measures. Some of them posted on social media on Wednesday that they had trained completely alone, as organised group training is not yet allowed.

In other news, the government adopted a decision allowing the exchange of personal data related to prescribed self-isolation, quarantine and mandatory treatment for COVID-19 between the national public health institute and police. (Zoran Radosavljevic | EURACTIV.com)

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ZAGREB

First joint commemoration. For the first time since 2014, this year’s commemoration in Jasenovac memorial centre, which marked the 75th anniversary of the break-out of inmates from the notorious Ustasha-run concentration camp, was attended by the entire state leadership. Also in attendance were representatives of ethnic minorities and antifascists, who had since 2016 organised separate commemorations, arguing that Croatia is trying to rewrite the history of World War Two.

PM Andrej Plenković said the government’s policy builds on reducing divisions in society, condemning WW2 crimes, showing respect for the victims, and promoting a culture of remembrance. But the event didn’t pass without controversial remarks. Read the full story here.

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BELGRADE

Strasbourg court begins proceedings against Serbia. The European Court of Human Rights (ECHR) has initiated proceedings against Serbia over the degrading treatment of Roma people, who have been living in an informal settlement near Belgrade, the Initiative for Economic and Human Rights A11 reported on Wednesday (22 April). EURACTIV Serbia has more.

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No migrant ever returned from Austria, says interior ministry. Serbia’s assistant interior minister, Zoran Lazarov, had dismissed the claims on Wednesday (22 April) from the leader of the Dveri (Doors) Movement, Bosko Obradovic, about Serbia being made into a centre for asylum seekers, adding that “no migrant had ever been returned from Austria”. Read more.

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[Edited by Sarantis Michalopoulos, Daniel Eck, Benjamin Fox]