What problems will the next generation have?
Comment: The "Next Generation Europe" has to pay for today's crisis
With her gigantic budget for the next seven years, the EU Commission President has dared to hit the jackpot. It will be interesting to see what the 27 member states leave behind. You have to unanimously agree to the mix of rescue funds and reform budget. There will be tough negotiations over the next few weeks, especially about who gets how much and under what conditions from the bulging box.
Ursula von der Leyen claims that she discussed this urgent anti-crisis plan with all governments and that she did not experience any fundamental contradiction. This may be because Europeans have agreed on a financial trick to finance their reconstruction fund that will not burden today's taxpayers, but future generations. The EU is to take out 750 billion euros in loans, which will only be paid off after 2028 over a period of up to 30 years. The repayment is to be financed through new taxes, which are called "own resources" in EU jargon. So far, the member states have repeatedly forbidden the EU Commission to collect significant own funds. Because your own income, your own taxes mean power, and you don't necessarily want to give it to Brussels.
Tell me honestly who has to pay
Europe correspondent Bernd Riegert
With vague taxes on plastic waste, carbon dioxide and climate-damaging imports from third countries, Von der Leyen wants to collect the money to pay the installments due from 2028. That is fiscal wishful thinking. In the end it will probably have to be judged by the member states. In any case, the future taxpayers in Europe will ultimately pay for these debts.
The plan could also be not to actually repay the debt that the EU now wants to incur for the first time, contrary to its treaties, but simply to refinance it again and again and postpone it. As states generally do. For the EU members, the debt plan, for which the states do not have to use equity capital but only guarantees, is the most elegant solution because it now does not burden national budgets.
So the problem is postponed into the future. Given the economic crisis triggered by the anti-corona measures, it is understandable that the EU should embrace this solution. But the Commission and the member states should also be honest about what they are doing. And don't pretend the debt will eventually be paid off with a nebulous tax. The name Ursula von der Leyen gave the economic development program would also make sense: "Next Generation Europe". The next generation in Europe is paying for today's crisis. In addition to the billions of holes in the national budgets, it is now getting the EU's debts - and, if things go well, a few sensible investments as well.
Nothing better could happen to the EU itself, however, because debts weld together. Leaving a future community of liability, a debt union, will be almost impossible because it is very expensive. This gives the EU a kind of guarantee of existence.
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