How Will Europe Bounce Forward?
While the health crisis brought about by COVID-19 might be over, the economy is still dealing with its dramatic consequences. To overcome the potentially devastating economic effects, the European Commission is proposing a €750 billion recovery package, called ‘Next Generation EU’ . But it’s not just up to EU leaders. Business also has a key role to play in Europe’s recovery. Now is the time for companies to act! How? By engaging in collaborative actions via the European Pact for Sustainable Industry.
The COVID-19 pandemic has put Europe’s healthcare system and economy to the test. Consequently, the European Union’s Gross Domestic Product (GDP) is expected to fall by more than 7% in 2020, with a partial return to growth expected only in 2021.
Through its first COVID-19 response packages, the EU supported member states by reintroducing flexible budgetary and state aid rules. Additionally, ad-hoc measure such as SURE (Support to mitigate Unemployment Risks in an Emergency) were implemented, allowing for a financial assistance up to €100 billion in the form of loans from the EU to affected Member States.
However, in order to ensure a steady economic recovery, the European Commission has now proposed a new recovery instrument: Next Generation EU, a €750 billion recovery package. The funds will be used to:
Support to member states with investments and reforms: a new Recovery and Resilience Facility with a budget of €560 billion to support member states in implementing reforms; the REACT-EU initiative to provide cohesive support with a budget of €55 billion, which will focus on workers and SMEs.
Kick-start the EU economy by incentivising private investment: a new Solvency Support Instrument to mobilize private support to companies in sectors and regions most affected; a Strategic Investment Facility within InvestEU to strengthen European autonomy across key technologies and value chains.
Set up the EU4Health programme with a €9.4 billion budget to invest in crisis preparedness.
These measures reinforce the goals set out in the European Green Deal, and put sustainability at the heart of the recovery. As argued by European Commission President Ursula Von der Leyen, this recovery plan will accelerate the path towards a digital single market and a fair and inclusive society. But it’s not just up to EU leaders. Businesses have a key role to play in this transformative recovery.
To support companies in a green and inclusive recovery, CSR Europe has developed the European Pact for Sustainable Industry, setting the basis for a pan-European movement aimed at invigorating leadership and engagement towards a Sustainable Europe 2030.
Under the umbrella of the Pact, companies and industry federations can collaborate constructively, actively and on an ongoing basis at every level, from local to global, to:
Care about people’s health, families, jobs, and communities;
Increase the resilience of enterprises and support new forms of leadership, entrepreneurship and sustainable finance that creates value to society;
Protect and create jobs and innovate economic activities within a socially inclusive and just transition;
Actively contribute to shape policies at the European, national, and local level to reach the Sustainable Development Goals (SDGs).