The recovery plan for Europe and its importance for the future of European integration

"Europe will be forged in crises, and will be the sum of the solutions adopted for those crises", predicted Jean Monnet as early as 1976. The COVID-19 pandemic is the latest example of an economic shock which has brought another milestone in the history of European integration. In response to the temporary shutdown of their economies, for the first time ever, the EU countries have embarked in solidarity on significant fiscal risk sharing through joint borrowing. This article provides a closer look at the triple meaning of the European recovery plan (NGEU), as the largest form of fiscal transfer in the history of the EU, as a novelty in European financial markets and as a tool for transforming the European economy. NGEU-funded projects do not focus on completely new areas, but help to advance the previously planned EU environmental and digital objectives, leading to a further partial shift of decision-making on national spending priorities to de facto EU competence. In contrast to the earlier joint financial instruments (EFSF, ESM), which also served to raise finance on capital markets during the debt crisis, the NGEU does not only apply to euro area countries, but to all EU Member States. Moreover, the financial support to Member States takes the form of non-repayable grants alongside loans. Thus, the currently approved plan does not create a two-speed Europe, but builds on the principle of a united and solidarity-based Union.