LONDON – Austria’s CFO believes there is no need to worry about EU recovery funds and investors are becoming increasingly concerned about a post-pandemic delay of much-needed money.
The EU agreed in July to tap the financial markets in search of 750 billion euros (898 billion US dollars) to distribute among the 27 nations and prop up their economies after the coronavirus shock. However, in order to receive these funds, countries have had to specify exactly how they will use them – a process that has not yet been completed.
In addition, the German constitutional court threw a curveball at the trial. Last month it aroused doubts and effectively stopped the necessary legislative steps in Germany before the funds could be released.
“We have of course followed the developments of the court ruling in Germany very closely. To a certain extent they determine what, in the opinion of many critics, harbors the risk of permanent implementation of temporary measures,” said the Finance Minister from Gernot Blume, Austria, said CNBC on Friday .
The German court acted after a group called the Citizens’ Will Alliance complained that the EU treaties did not allow the bloc to collectively borrow. The German judges said that the federal government should ensure that borrowing at EU level “does not become a permanent solution” – an opinion that Austria shares.
“I can understand what the German court said and in some parts I agree,” he said, adding that Austria, compared to France and Germany, “is a little more skeptical when it comes to permanent debt reciprocity within the country European Union goes “.
“That is not what the Union is designed for. And we have now taken measures to combat the crisis. But by definition, a crisis is a temporary situation, so the measures we have taken to combat this crisis also have a temporary motive.” CNBC’s “Squawk Box Europe” on Friday.
Before the funds can be released, one more element is required: all EU member states must complete the ratification process in their national parliaments. Austria is one of the 10 EU countries that have not yet done so, and without this the EU cannot open up the debt markets.
“I am convinced that there will be no delay in being able to issue these European bonds, as this is an important measure to revive the European economy,” said the Austrian CFO when asked why his country had not taken this step yet .
“We have agreed on these measures. Austria pays a large share of 12 billion euros into this pot. We are doing this because we believe that this is the right way to increase growth in the European market all citizens of Europe will benefit from it. ” ” he added.
There is nothing wrong with negotiating vaccines with Russia
Like other EU countries, Austria has problems quickly making Covid 19 vaccines available to its citizens.
However, Chancellor Sebastian Kurz confirmed last weekend that negotiations to buy the Russian Sputnik V vaccine had been completed, although this shot had not yet been approved by the European Medicines Agency.
I said Austria followed the rules and “tried to get more vaccine doses to revive the economy faster and give people back their freedom”.
“I can’t see anything wrong with that,” he said.
Some eastern EU states like Hungary have decided to go beyond the agreements negotiated by the European Commission to buy more vaccines themselves, even if they haven’t received medical approval across the bloc.
Speaking to CNBC, BlumeI said he was optimistic that Austria would have vaccinated the entire adult population who would like to receive a vaccine in the next two to three months.
A man sits on a park bench in the Volksgarten in front of the Hofburg in Vienna, Austria on April 8, 2021 as Austria continues with Covid-19 restrictions.
JOE KLAMAR | AFP | Getty Images