Pandora’s box has been opened!

TAE President Rolf von Hohenhau’s reaction to the results of the EU summit

“The agreement reached by the European Union on the 750 billion euro ‘Next Generation’ recovery package and the medium-term financial framework (MFF) totalling 1.082 trillion euros is generally regarded as a success.”

It was right for the EU to provide support during the coronavirus crisis. The loans on offer are a step in the right direction. However, the collective borrowing that has now been agreed is wrong: I see a high risk that the EU will continue to take on debt in future and that taxpayers will ultimately have to bear the burden. This has opened Pandora’s box! We must not forget that the mountain of debt in Europe is continuing to grow. On the one hand, nation states have to take on debt to finance their own support programmes, and now they are also liable for the EU’s debts.

We, the Taxpayers’ Association, view with great scepticism the granting of subsidies running into the billions that are not tied to specific programmes and measures, nor subject to automatic checks. After all, there is not even a guarantee that countries will be able to get their economies back on track with the help of these support measures. On the contrary, there is a risk that these funds will simply be spent.

It is therefore important that the EU ensures that the funds disbursed are actually used for their intended purpose. The European Commission must consistently insist on compliance with the rules it has set itself!

“When the news currently refers to 1.8 trillion euros (the Medium-Term Financial Framework (MFF) and the Next Generation programme), this is only a fraction of the sums actually available. The ECB, for example, has increased its bond purchases. There are funds from the EIB and the ESM. Further programmes by the European Commission are already in the pipeline. In total, we are talking about 5.5 trillion euros! The EU is heading straight for a debt trap. Unfortunately, this is being completely ignored in the current debate.”

“We, the taxpayers, must therefore be on high alert, because ultimately it will be us who will have to foot the bill for this European spending and debt policy,” explains the President of the European Taxpayers’ Association.

Download overview: EU financial framework and critical assessment by TAE