Category: Economy

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Circular economy : “With a new impetus for sustainable development”

The COVID-19 crisis has created the conditions for circular products and services to become the norm in Europe, says the EESC. In a recent opinion on the new EU Circular Economy Action Plan, the EESC urges lawmakers to ensure the circular economy finds a place and resources in the overall “greenprint” for Europe’s recovery.

The COVID-19 crisis can be a great opportunity to start up again with new impetus for sustainable development, says Antonello Pezzini, rapporteur for the EESC opinion on the new EU Circular Economy Action Plan, adopted at the July plenary session.

The vision of circular products and services becoming the norm, which was behind the plan put forward by the European Commission back in March as COVID-19 was looming, is becoming more tangible as the crisis unfolds. With the new Action Plan, the circular economy can really become a pillar of the Green New Deal, says the rapporteur.

The Action Plan takes in much of the advice already pioneered by the EESC in its 2016 opinion on the first Circular Economy Package, particularly in areas such as eco-design, reparability, premature obsolescence and secondary raw materials, and as such is very welcome. However, broader measures will also be needed, in the EESC’s view. Continue reading “Circular economy : “With a new impetus for sustainable development””

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A deep and uneven recession, an uncertain recovery

The coronavirus pandemic represents a major shock for the global and EU economies, with very severe socio-economic consequences. Despite the swift and comprehensive policy response at both EU and national level, the EU economy will experience a recession of historic proportions this year.

The Spring 2020 Economic Forecast projects that the euro area economy will contract by a record 7¾% in 2020 and grow by 6¼% in 2021. The EU economy is forecast to contract by 7½% in 2020 and grow by around 6% in 2021. Growth projections for the EU and euro area have been revised down by around nine percentage points compared to the Autumn 2019 Economic Forecast.

The shock to the EU economy is symmetric in that the pandemic has hit all Member States, but both the drop in output in 2020 (from -4¼% in Poland to -9¾% in Greece) and the strength of the rebound in 2021 are set to differ markedly. Each Member State’s economic recovery will depend not only on the evolution of the pandemic in that country, but also on the structure of their economies and their capacity to respond with stabilising policies. Given the interdependence of EU economies, the dynamics of the recovery in each Member State will also affect the strength of the recovery of other Member States. Continue reading “A deep and uneven recession, an uncertain recovery”

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Commission adopts banking package to facilitate lending to households and businesses in the EU

The Commission has adopted this week a banking package to help facilitate bank lending to households and businesses throughout the European Union. The aim of this package is to ensure that banks can continue to lend money to support the economy and help mitigate the significant economic impact of the Coronavirus. It includes an Interpretative Communication on the EU’s accounting and prudential frameworks, as well as targeted “quick fix” amendments to EU banking rules.

The rules put in place following the financial crisis have ensured that banks in the EU are now more resilient and better prepared to deal with shocks to the economy. Today’s Communication recalls that EU rules allow banks and their supervisors to act in a flexible, but responsible, manner during economic crises to support citizens and firms, particularly small and medium-sized companies. Today’s Regulation also implements some targeted changes to maximise the capacity of credit institutions to lend and to absorb losses related to the Coronavirus pandemic, while still ensuring their continued resilience.

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People said: “We are supporting households and businesses as much as we can to deal with the economic fallout of the Coronavirus. The banking sector can do a lot to help here. We are using the full flexibility of the EU’s banking rules and proposing targeted legislative changes to enable banks to keep the liquidity taps turned on, so that households and companies can get the financing they need. I will soon also be launching roundtable discussions bringing together consumer and business groups with the financial sector so that we can address the most urgent needs of our citizens and companies.” Continue reading “Commission adopts banking package to facilitate lending to households and businesses in the EU”