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Proposals for a European recovery plan that respects the “Green Oath”

Wojtek Kalinowski & Julien Hallak & Mathilde Dupré, 30 June 2020

[English] [français]

Responses to the Covid-19 crisis must support the social and ecological transformations required to meet the climate and environmental goals of the EU and France and to guarantee dignified living conditions for the entire population. This involves not only developing all measures that present potential joint-benefits for the revival of economic activity and the transition, but also accepting the decline of the most polluting activities and sectors, and supporting the economic players and employees affected during the transition phase.

The financing of recovery plans must be adapted to fit this objective, not the other way round. Yet the plan presented by the European Commission on 27 May fails to do so: it provides valuable assistance to States and takes an important step towards debt mutualisation, but does not show how the ecological transition can be accelerated. Investments in the key sectors of the Green Deal are overwhelmingly based on private funding. This constraint risks steering the Green Deal towards components that are important but also the easiest to deal with, leaving aside many crucial challenges and sometimes repeating the mistakes of the past.

This note proposes another way forward: first, a coherent ecological roadmap, including essential social measures required to meet the democratic challenge posed by the transition, and second, innovative financing solutions. Funding is a technical issue that should not prevent us from taking action in the face of crises that threaten our living conditions. In order to relieve the stresses currently weighing on public finances, we propose four types of solutions that can be complementary: quasi-perpetual and “melting” mutualised debt, monetary financing, debt cancellation and “helicopter money”

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