PARIS (Reuters) – The speed with which European governments can get their shared EU recovery plan off the ground is now more important than its size, ECB policymaker Francois Villeroy de Galhau said on Wednesday.
U.S. President Joe Biden’s administration has already started making payouts under a new $1.9 trillion COVID-19 stimulus package, raising questions in Europe about the size of the European Union’s 750 billion euro ($879 billion) recovery fund agreed last summer.
“For us Europeans, our main issue now is not the scale of our fiscal response but the speed of its execution,” Villeroy said in an online speech to the College of Europe.
“Speed, once more, is our collective handicap. Governments now need to implement the recovery plan to which they have agreed and they need to do so urgently,” he added.
EU governments are still submitting detailed plans on how they plan to spend money from the 27-nation bloc’s landmark stimulus fund, which many still need to ratify.
The European Commission and the governments also have yet to agree on structural reforms, while domestic politics in some countries has fuelled concerns about possible delays.
Meanwhile, Germany’s constitutional court issued an injunction on Friday against signing off on the EU law for the fund in Germany because of an emergency appeal against it from the far-right Alternative for Germany (AfD) party and a group called Citizens’ Will Alliance.
Villeroy said that adequate fiscal discipline was key to coping with economic shocks, and that the time would come next year after German and French elections to hold a debate on the European Union’s fiscal rulebook, the Stability and Growth Pact.
“We do still need rules, but revised and simplified ones,” Villeroy said.
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(Reporting by Leigh Thomas; Editing by Catherine Evans)
