The new European recovery plan a giant leap for Europe

Sophie Javary, Vice-chairman CIB EMEA at BNP Paribas, Administrator of EuropaNova

The European Commission recovery plan as proposed on May 27th 2020 for addressing the need to repair for the Covid crisis and preparing for the Next Generation is revolutionary. It opens a new era for the EU and for the euro as a currency especially the “Next Generation EU” plan of €750 billion. Some commentators have described this as a “Hamiltonian moment” for Europe insofar that – if the EC plan is adopted in mid-July by the Member states – the EU will both borrow independently in an unprecedented way. The EU will also raise taxes directly hence gaining budget autonomy outside member contributions. “Hamiltonian” refers to the first time that, in 1790 under Secretary Hamilton, the 13 states of the US decided to borrow jointly. This moment has been a “point de bascule” for the US into a real federation. We are living an almost as historically important moment for Europe and it is remarkable that the Commission has put this plan together only a few weeks after the also historic Franco-German decision to push for a common recovery plan.