14:21 1 December 2021
Permanent EU Recovery Fund can help Poland change
Poland’s relationship with the EU is already in a bad state, with continuing disputes about the rule of law, the recovery fund, and the Polish government’s opposition to LGBTIQ rights. The EU’s climate ambitions will only add to this tension, given Poland’s largely coal-fired economy.
Warsaw will have to enact unpopular reforms that will hurt industrial communities to end coal production, as agreed between the government and the coal mining industry in order to comply with EU climate goals. Poland’s government will be tempted to blame the EU for the tough choices ahead, but the EU’s recovery fund could be used to defuse the conflict if it is made permanent and reformed.
By making the recovery fund permanent, the EU would be providing a constant stream of investment for the climate transition, which will of course continue long after the fund’s current end year of 2026. Public investment was the biggest victim of the austerity round of the 2010s because it is easier to cut future spending than raising taxes or taking money from welfare, pensions, or public services. But it was one of the worst budget lines to cut: public investment stimulates private investment, especially when economies are weak. A permanent fund could help ensure that public investment across Europe is more stable across the economic cycle, rather than being cut in downturns.
(CER)
