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Jun 10, 2020

Coronavirus Update: Finance Minister calls on EU to act “fairly and proportionately” when mitigating the economic effects of pandemic

Mihály Varga said the package’s “undeclared goal” was to prevent the collapse of states “long grappling with structural and financial problems”.

 

The finance minister has called on the European Union to act “fairly and proportionately” when mitigating the economic effects of the coronavirus pandemic, adding that the EU’s recovery plan was “tailor-made to fit the needs of southern states”.

Speaking at a videoconference of the EU’s finance ministers, Mihály Varga said the package’s “undeclared goal” was to prevent the collapse of states “long grappling with structural and financial problems”.

Minister Varga noted that on May 27 the European Commission proposed a EUR 750 billion economic stimulus fund, “unprecedented in the EU’s history”. Two-thirds of that money would be ploughed into funding and one-third into loans. The EU is looking to take out market loans to finance the package, he said. When distributing the funding, the Commission introduced restrictions that put lower-income states at a pronounced disadvantage, he said.

Meanwhile, the EU’s draft budget for the 2021-2027 financial cycle “had been left basically unchanged”, leaving Hungary with a substantial loss in cohesion funding. According to the current draft, Italy, Spain, Greece and Portugal will receive some 65 percent of the EUR 50 billion cohesion funding, while the Visegrad Group will receive 12 percent.

Minister Varga called for a “real” recovery program considering the burden economic recovery will place on “the less developed states with open markets and strict fiscal policies”. It should consider the impact of the crisis on GDP and the unemployment rates, and the weight of crisis-hit sectors in the states’ economy, he said.

A call center set up for advice on the coronavirus can be reached on +36-80-277-455 and +36-80-277-456 or by email koronavirus@bm.gov.hu

Photo credit: Vg.hu