ECOFIN discuss the EU Recovery Plan

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Minister for Finance and Financial Services Edward Scicluna, together with the Finance Ministers of the European Union, participated in an ECOFIN video conference, on 9th June 2020.

During his intervention on the EU Recovery Plan, the Minister for Finance and Financial Services Edward Scicluna said, “We would like to thank the Croatia Presidency for the excellent way it has managed the presidency in such a difficult time. We have already welcomed the idea of a Recovery Package as a needed instrument to kick start the economy of the EU Member States and assist those Member States who have been hit hard by the pandemic. Now that we have the proposed details, we can give our initial reaction to them.

Starting with the main allocation criteria, we propose that such an important criteria should focus on an element which better capture the COVID-19 economic shock rather than consider the pre-COVID economic situation, which rightly so, some Member States rightly described this approach as backwards-looking. Furthermore, one should not rely on unemployment rates as the only indicator. Such an indicator is not sophisticated enough to catch the peculiarities of countries where there are some sectors which survive the ravishes of the pandemic while having one important economic sector, devastated – as is the case with tourism. We expect the Commission to come up with better indicators. 

In a spirit of solidarity, grants given in modest volumes, are acceptable to us. We cannot say the same for the ratio of grants to loans as allocated to some countries. The way the present grants to loans ratio is structured, it will turn a number of Member States, including Malta, from net beneficiaries to net contributors and having a multiplier effect which is difficult to understand let alone explain to others. 

On own resources, our suggestion is to go for taxes, such as on non-recyclable plastics and similar products, and not introduce controversial taxes which may stall our progress to an agreement, and this at a time when we want to obtain quick solutions. In particular, we believe the proposal to extend the Emission Trading System into taxation of air and sea travel, not only impinges on the welfare of the Member States which rely heavily on tourism, but also believe that these taxes are the last to consider, in this unique situation and has been dealt a significant blow.”