The MEP Iuliu Winkler, member of the European People’s Party group (Christian-democratic orientation), member of the Democratic Alliance of Hungarians in Romania, vice-chair of the European Parliament Committee on International Trade (EPCIT), permanent rapporteur for the EPCIT, as a member of the Delegation for relations with the People’s Republic of China, analysed the perspectives and challenges regarding the European Union Recovery Plan, in the context of the crisis caused by COVID-19, in the interview he offered Vladimir-Adrian Costea for the Geostrategic Pulse.

Vladimir-Adrian Costea: Mr. Winkler, the shock of the Coronavirus is a new challenge for the EU, whose resilience has been strongly tested lately. Terrorism, the migratory crisis, the rise of populism and extremism, to which we add the imminence of Brexit, place the EU member states in a vulnerable political, economic and social context. How do you see the future of the EU at the present? What are the options/scenarios that are still sustainable after this pandemic?

Iuliu Winkler: The Coronavirus pandemic deeply changed the public agenda of the entire European Union. A multitude of very important subjects disappeared from the public eye. One of the victims is the debate regarding the future of the European Union, whose official signal was given in March 2017, when the Commission led by Jean-Claude Junker hoped that such a debate could take place and end with the European elections in 2019. At that time, the European Commission proposed five scenarios for the future of the European Union – from business as usual, or the scenario of low expectations, where we only kept the common market, and became a plain economic cooperative, to the most complex scenario, where all 27 countries decide to integrate all the way. Three years after this proposal we find ourselves in the same spot regarding the debate about the future of Europe, and the tensions between the various groups of member states have increased. The pandemic has placed us at a turning point. We are at the hour of our biggest decision and the variables are simpler. Deepening our cooperation or starting our disintegration – these are the two options and the months to come will provide an answer.

The French-German proposal to create the economic recovery fund amounting to 750 billion euros guaranteed by the EU’s multiannual financial framework is the ultimate test. For the first time in its history, the EU can decide to borrow money from the financial markets in the name of all its member states and to finance immediate actions for the benefit of our future generation.

We need this economic recovery, and most of the member states need the recovery to be supported by non-refundable funds. We will thus avoid losing a new generation of young people, after the one we lost in 2009-2010.

Of course, possibility also means responsibility. Today’s loan will have to be paid back in the period between 2027 and 2057, so the task falls into the hands of the future generation. However, with a wisely managed recovery fund, we will start the road to our future prosperity today. This is why I believe that intense cooperation represents the future of the EU.

How did the EU manage the crises and the unrest that have occurred in the context of the complex social and economic changes caused by the COVID-19 pandemic? To what extent does the solidarity between the member states allow the establishment of a common front at a European level?

Carefully considering the state of the Union, we may see that all that unrest, all that distance that are making themselves acutely felt today, were already there before the pandemic. The Coronavirus did nothing but generate an unprecedented situation, which further highlighted European misunderstandings. During the first weeks of the crisis the response was a national one, each member state taking emergency measures without taking into account its neighbours or the EU27 in its entirety. The lack of solidarity was obvious, however, fortunately, short lived. I think that the European Parliament plenary session on the 27^th of March was the trigger that showed the need to restore solidarity. After that, every week, we bore witness to better coordinated actions taken at the EU level.

The necessary common front is functional today. It came up with new financial tools and even new institutions that will be able to respond effectively to the next similar challenge, even if it is not health related, but rather one of the asymmetrical threats we are all aware of.

The optimism of this evaluation will be confirmed during the next few months, if the member states and the European Parliament agree on the 2021-2027 multiannual financial framework and on the economic recovery programme.

To what extent was the political agenda of the European institutions and of the member states subjected to significant changes, in order to dampen the shock caused by the Coronavirus?

The spring of 2020 brought significant changes in the official agenda of the European institutions. The work schedule of the European Commission was updated. Some priorities have been postponed, such as the European Strategy on adaptation to climate change, or the new EU forest strategy. There is a possibility that the elements of the European Global Pact for the Environment could be included in the priorities of the “Next Generation EU” recovery plan, alongside the elements of the digital transition. This actually means a repositioning, not a waiver. Numerous international engagements and commercial negotiations have suffered because of the quarantine and the impossibility of keeping to the planned agenda.

Generally speaking, the conclusion drawn from the months where the activities were carried out online, via videoconference and email, is that technology helps democracy, but cannot replace it. Democratic debates, dialogue, brainstorming and the entire complex procedure regarding the direct mediation of conflicting ideas requires direct confrontation. This is why once the public health situation improves, we must go back to the well-known mechanisms of dialogue and direct negotiation.

The Commission’s recovery plan, “Next Generation EU”, highlights the idea of an ecological, digital, social Union and focuses on resilience, for the sustainable future of the EU. Are the economic measures included in the Plan enough to achieve these objectives? To what extent does this Plan help with reducing the differences in the development of the member states?

The structure of the recovery plan is based on three pillars: the tools necessary to support the economic recovery of the member states, measures to incentivise investments and enterprises, and the consolidation of those European programmes that support the single market. The two horizontal priorities that are the focus of the entire recovery plan are the green and digital transitions.

Therefore, we have a complex structure, which risks diffusing unless we comply with the principles of the cohesion policy. We must concern ourselves with the future, without tearing ourselves from the present. The recovery plan must help the less developed member states more, as well as those that have been most affected by the pandemic. This is the principle of solidarity. This is why the recovery plan cannot only offer loans. Just like the French-German proposal was conceived, most of the financial support must be non-refundable for those who need it the most.

How can member states obtain and efficiently manage the funds of this recovery plan? In Romania’s case, what is the lesson we must learn, if we are to reach a high level of absorption of these European funds?

The recovery plan’s life span is well defined, starting with 2021 and lasting up until 2024. The same time span will be given to the flexibility of the budget that the European Commission has introduced as a response to the crisis. I believe the main challenge of all member states is to quickly develop viable projects that meet all the necessary requirements of “Next Generation EU”.

Jobs are a priority, because without new jobs, we will not have the desired economic and social effects.

As far as Romania is concerned, our issues are old: poor administrative capability and lack of social cohesion. It is imperative that we wake up and become aware of the fact that without dialogue between the business and administrative environments and the educational system, we will not be able to mobilise properly, and become effective. Our objective should not be spending European money. Out real purpose is modernising Romania and placing our society on the path towards European integration.

What are the opportunities presented to the economic actors from the EU member states?

The future is green and digital. The recovery plan provides all European companies the opportunity to use their funds for this necessary transition to sustainability and digitalization. The responsibility of the institutions that will manage the financial resources of the recovery plan is that of ensuring the effective distribution of the sums. I do not believe that our savings have anything to gain from saving companies whose business models are still anchored in the 20^th century. It would only be temporary and the money would be wasted.

To what extent does the EU’s management of the COVID-19 pandemic represent a proper answer to the populist and extremist rhetoric which has become increasingly visible in the EU?

There is a historical connection between the success of populism and economic uncertainty. This is the history lesson that Europe was able to learn in the ‘30s of the past century. Deepening inequalities and asymmetrical economic development do nothing but worsen the situation. We must be careful because populism and demagogy might win. The European Union has mobilised itself to better inform its citizens and is on the path to building social resilience against disinformation. However, we must be aware of the fact that we have only taken the first steps on a very long road. Changing the way a society reacts to disinformation takes a generation and the quality of the education system is essential in this fight. In Romania we will have to take urgent and radical decisions to be able, in the coming years, to ensure a critical thinking mindset, a high level of understanding and openness towards cooperation, skills that young people need in order to be able to cope with disinformation, manipulation and the contradicting influences they are subjected to.

In the current situation, can leaving the EU lead to bankruptcy? How does Brexit affect the relationship between the United Kingdom and the EU27?

In a study carried out by Oxford University, the subjects were requested to mention the best and worst EU episode. In first place for positive answers came the fall of the Berlin Wall, while the negative episode was the Brexit referendum. These answers are significant to me for the way the UK’s decision to leave the EU is perceived. However, four years after the referendum, we must understand that for British politicians Brexit is now a country project. Paradoxically, the pandemic acted as an unexpected rescue mechanism for British politicians, since in the years to come any economic problem can be pinned on this crisis.

For the EU27 Brexit is economically problematic and politically dangerous, because it is for the first time in its history that the EU, otherwise in constant expansion, loses a member.

As far as the technical stage of the negotiations is concerned, taking into account Prime Minister Boris Johnson’s refusal to extend the transition period, the EU27 is facing an impossible mission – renegotiating 759 agreements by the end of 2020.

The priority is the future economic relation between the two partners, which poses extremely difficult challenges: fair competition, the domain of fishing and the judicial institutional framework.

We must notice the exceptional proof of solidarity coming from the EU27 during the entire course of these difficult negotiations. This display of European solidarity creates the premise for future success.

A commercial, economic and cooperative relationship with our British partners is important and desirable for the entire EU. At the same time, however, it cannot be better outside than inside, so the United Kingdom cannot benefit from the common market without undertaking the related obligations.