Boosting the Economic Recovery or Closing a Green Deal in Europe? Or Both?
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DOI: 10.1007/s10272-020-0930-0
Natacha Valla
Boosting the Economic Recovery or Closing a Green Deal in Europe? Or Both? In 2020, the EU gave birth to the largest stimulus package it ever funded. Between the long-term budget of the EU and the temporary instrument to boost recovery (Next Generation EU), a global envelope of €1.8 trillion is being mobilised to help rebuild post-COVID-19 Europe. The agenda is simple: “a greener, more digital and more resilient Europe”.1
The specific economic profile of the COVID-19 crisis From an economic perspective, the crisis that unfolded after the outburst of the COVID-19 pandemic has been particular in many ways. Its specificities dictate the way in which any recovery plan should be designed and implemented. A key specificity of the 2020 crisis is the intensity with which the service sector has been affected. While the manufacturing and construction sectors have suffered the most from recent cyclical downturns, this time – particularly the lockdown of spring 2020 – they were more resilient than the service sector. During the first half of the year, the contribution of the service sector to the contraction of GDP was three times greater than that of the manufacturing sector in the euro area.
© The Author(s) 2020. Open Access: This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (https://creativecommons.org/licenses/by/4.0/). Open Access funding provided by ZBW – Leibniz Information Centre for Economics. 1
As stated on the European Commission website, https://ec.europa. eu/info/strategy/recovery-plan-europe_en, on 10 November 2020, the European Parliament and the EU countries meeting in the Council reached agreement on the next long-term EU budget and Next Generation EU. This agreement will strengthen, with an envelope of €15 billion, specific programmes within the framework of the longterm budget for the period 2021-2027. But follow-up discussions by member states have evidenced political difficulties that could arise through veto positions.
Natacha Valla, Sciences Po School of Management and Innovation, Paris, France.
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As a result, the heaviest burden today is borne by the lowest paying jobs in the service sector. This is true both in the United States and in Europe. In the United States, minorities and women are over-represented in this employment sector and will therefore pay the heaviest price. In Europe, too, job losses have disporportionately affected different socio-economic groups. Over the first half of 2020, the working population shrank by 7% for low qualifications, while it increased by more than 3% for the highest qualifications, as highlighted by the ECB. 2 In general, economists consider that over a long period, technological progress is associated with an increase in total factor productivity. However, in the short term, it is difficult to confirm this observation. The jury is still out. And once the crisis has passed, we will have to find our way back closer to full employment. A second specificity of this recessio
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