Minister Varga calls for ‘fair and proportionate’ EU recovery package

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Finance Minister Mihály Varga on Tuesday called on the European Union to act “fairly and proportionately” when mitigating the economic effects of the coronavirus pandemic, adding that the EU’s recovery plan was “tailor-made to fit the needs of southern states”.

Speaking at a videoconference of the EU’s finance ministers, Varga said the package’s “undeclared goal” was to prevent the collapse of states “long grappling with structural and financial problems”.

Varga noted that the European Commission on May 27 proposed a 750 billion euro economic stimulus fund, “unprecedented in the EU’s history”. Two-thirds of that money would be ploughed into funding and one-third into loans, he said.

The EU is looking to take out market loans to finance the package, he said.

When distributing the funding, the Commission introduced restrictions that put lower-income states at a pronounced disadvantage, Varga said.

Meanwhile, the EU’s draft budget for the 2021-2027 financial cycle “had been left basically unchanged”, leaving Hungary with a substantial loss in cohesion funding, Varga said.

According to the current draft, Italy, Spain, Greece and Portugal will receive some 65 percent of the 50 billion euro cohesion funding, while the Visegrad Group will receive 12 percent, he said.

Varga called for a “real” recovery programme considering the burden economic recovery will place on “the less developed states with open markets and strict fiscal policies”. It should consider the impact of the crisis on GDP and the unemployment rates, and the weight of crisis-hit sectors in the states’ economy, he said.