COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTE AND THE COMMITTEE OF THE REGIONS Europe's moment: Repair and Prepare for the Next Generation
Date: 2020-05-27
Institutions: European Commission, Secretariat-General
Subjects: EU aid, EU situation, economic and social cohesion, economic consequence, economic policy, economic recession, epidemic, infectious disease, investment, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 27.5.2020  COM(2020) 456 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTE AND THE COMMITTEE OF THE REGIONS Europe's moment: Repair and Prepare for the Next Generation {SWD(2020) 98 final}  
 
 
 Europe’s moment: Repair and Prepare for the Next Generation 

1. 

INTRODUCTION  

The corona virus has shaken Europe and the world to its core, testing our healthcare and 
welfare  systems,  our  societies  and  economies  and  our  way  of  living  and  working 
together. People have lost their loved ones and their jobs, while plans and futures have 
been  cast  into  uncertainty.  Europe  was  confronted  by  a  public  health  challenge  that 
quickly became the most  drastic economic crisis  in  its history.  And we already see the 
indelible  mark  the  virus  will  leave  on  our  relationships,  our  politics  and  geopolitics. 
However,  in  adversity  so  often  comes  opportunity.  Now  is  the  time  for  our  European 
Union  to  get  back  to  its  feet  and  move  forward  together  to  repair  damage  from  the 
crisis and prepare a better future for the next generation. 

It is in our common interest to support the hardest hit, strengthen our Single Market and 
invest in our shared European priorities. In our Union, a euro invested in one country is a 
euro invested for all. A collective and cohesive recovery that accelerates the twin green 
and  digital  transitions  will  only  strengthen  Europe’s  competitiveness,  resilience  and 
position  as  a  global  player.  This  is  why  solidarity,  cohesion  and  convergence  must 
drive Europe’s recovery. No person, no region, no Member State should be left behind.  

Since  the  pandemic  started,  the  EU  and  its  Member  States  have  taken  unprecedented 
measures to  protect lives and livelihoods. The EU supported national  efforts  to  tackle 
the health crisis and cushion the impact of the economic hit. It freed-up every available 
euro in its budget to fight the virus. It used the full flexibility in the budgetary and State 
aid rules and proposed to create SURE, a new instrument to help people stay in work.  

This  was  part  of  a  first-response  package  which  can  immediately  provide  more  than 
half  a  trillion  euro  to  support  workers,  small  businesses  and  Member  State  economies. 
Along  with  measures  taken  by  the  European  Central  Bank,  the  EU  response  so  far 
provides  Member  States  with  unprecedented  firepower  to  help  those  that  need  it  the 
most. These were the right measures taken at the right time but we know that this will not 
nearly be enough to kick-start our economies.  

To get the economy  moving again, confidence must return. People need to  trust  the 
places  they work, buy and socialise in.  They need to  have certainty and peace of mind 
when it comes to their livelihoods and their future. Any recovery will depend on being 
able  to  gradually  and  sustainably  lift  containment  measures,  on  our  ability  to  live 
alongside the virus and on having a clear understanding of the situation across Europe.  

This  crisis  is  unlike any other we have faced before.  It  is  disruptive and evolving in 
nature. And many of its effects and divisions will continue to play out in unexpected or 
unanticipated ways. What we do already know is that the necessary action taken by the 
EU and its Member States to prevent hundreds of thousands of deaths has come at a cost. 
All  of  Europe  has  been  affected  and  the  economic  shutdown  means  jobs,  incomes  and 
healthy companies have been put at risk in ways not seen in previous crises. 

While  the  virus  is  the  same  in  all  Member  States,  the  impact  and  the  potential  for 
recovery  looks  very  different.  Countries  and  regions  with  economies  dependent  on 
client  facing  services,  exports  or  a  high  number  of  small  businesses,  will  be  hit  much 

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harder  than  others.  And  while  every  Member  State  has  supported  its  workers  and 
companies as  much as possible, not  all can do this to  the same extent. This  creates the 
risk of an imbalanced recovery, an uneven playing field and widening disparities. And it 
shows the need and the value of a European response. 

The choices we make today  will define tomorrow’s future  for the next  generation. The 
massive investment needed to kick-start our economies must relieve the burden on their 
shoulders, not make it heavier. This is why the EU’s recovery plan must guide and build 
a more sustainable, resilient and fairer Europe for the next generation.   

Our generational challenges - the green and digital transitions – are even more important 
now than before the crisis started. Through the recovery, we will press fast-forward on 
the twin green and digital transitions. We will strengthen our strategic autonomy while 
preserving  the  benefits  of  an  open  economy.  We  will  support  our  partners  around  the 
world and lead a renewed and reinvigorated form of multilateralism the world needs. 

To live up to the extraordinary challenge and to prepare a better future, the Commission 
is  today  proposing  a  new  recovery  instrument,  called  Next  Generation  EU,  within  a 
revamped long-term EU budget. In total, this European Recovery Plan will put € 1.85 
trillion1 to help kick-start our economy and ensure Europe bounces forward.  

The  recovery  is  likely  to  be  long,  but  the  needs  are  immediate.  A  swift  agreement  on 
these  proposals  will  be  a  powerful  statement  of  European  unity,  solidarity  and  shared 
sense of direction. Europe’s recovery will be a team effort, from all of us as individuals, 
to  social  partners,  civil  society,  business,  regions,  countries  and  institutions.  This  is 
Europe’s moment and it is time to seize it together.  

2.  THE ANATOMY OF THE ECONOMIC CRISIS 

To understand what Europe needs to do to recover, we must first have a clear picture of 
what  we  are  facing.  Predictions  or  definitive  conclusions  at  this  stage  of  the  crisis  are 
inevitably  fraught  with  uncertainty.  However,  it  is  already  clear  that  the  economic 
outlook  is  full  of  risk  and  that  the  recession  in  Europe  could  be  deep,  damaging  and 
prolonged if we do not take decisive action now.  

The restrictions imposed to contain the spread of the virus slowed economic life down – 
in  some  cases  almost  to  a  standstill.  Supply  chains  and  production  lines  have  been 
disrupted and the trade in goods and services have been interrupted. Household spending 
and  private  investment  collapsed  to  historic  lows.  Europe’s  economy  and  most  of  its 
industrial ecosystems have been operating at a fraction of their capacity.  

Put together, these factors are expected to lead to a sharp contraction of the EU economy. 
The figures  are stark and the extent of the damage is  unprecedented. Estimates suggest 
that EU Gross Domestic Product (GDP) fell by some 15% in the second quarter of 2020 
as compared to the same time last year. Overall, the EU economy is expected to shrink 

1   Unless indicated otherwise, amounts are expressed in constant 2018 prices. 

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by  more  than  7%  in  2020.  However,  a  worst-case  scenario  of  a  second  wave  and 
extended lockdown measures could lead anywhere up to a 16% drop in GDP this year.  

While the economy is expected to return to growth in 2021, the initial recovery will be 
partial and the impact felt acutely by people and businesses. Many people are likely 
to see their income drop and their jobs put at risk. Unemployment is set to rise to 9% in 
the  EU,  hitting  young  people  and  those  in  low-skilled,  temporary  work  and  living  in 
poorer  households  disproportionately  hard.  Poverty  and  inequalities  are  likely  to  rise,  
underlining  the  importance  of  a  social  and  inclusive  recovery.  Liquidity  and  access  to 
finance  will  be  a  continued  challenge  for  companies,  and  in  particular  for  smaller 
businesses. The risk of insolvencies will need to  be mitigated to  avoid  worse knock-on 
effects.  

The economic impact of the crisis will differ greatly between different parts of the 
economy. Businesses providing client-facing services or relying on crowded workplaces 
and customer areas are most affected. First Commission estimates show that tourism, the 
social economy and the creative and cultural ecosystems could see a more than 70% drop 
in turnover in the second quarter of 2020. Textile, transport, energy intensive industries 
and the renewable energy sector will also be hit hard. Ecosystems with higher consumer 
confidence, such as manufacturing, retail or health are likely to bounce back faster, while 
others may face a delayed economic hit.  

The  impact  and  recovery  potential  also  depends  on  each  country’s  demographic  or 
economic  structure,  with  for  instance  those  with  a  high  number  of  small  and  medium-
sized  enterprises  (SMEs)  hit  harder.  It  also  depends  on  their  ability  and  capacity  to 
absorb  and  respond  to  the  shock,  notably  with  the  help  of  State  aid.  This  has  a 
considerable  knock-on  impact  on  the  Single  Market  and  widens  divergences  and 
disparities between Member States. This is reflected in the fact that the recession will be 
close to 10% for some countries, compared to an average of between 6-7.5% elsewhere. 

This  picture,  presented  in  greater  detail  in  the  accompanying  needs  assessment2,  shows 
the need for massive investment and financing. Putting a definitive figure on investment 
needs at  this stage of the crisis  is  not  an exact  science. However, the needs assessment 
estimates  that  at  least  €1.5  trillion  of  additional  public  and  private  investment  will  be 
required in 2021 and 2022 to get Europe on the road to a sustainable recovery.   

3. 

INVESTING IN THE NEXT GENERATION   

The  needs  assessment  shows  the  need  for  massive  investment  at  scale  and  speed, 
including substantial public and private investment at national level. If left to individual 
countries alone, the recovery would likely be incomplete, uneven and unfair. This is 
a very real risk in other parts of the world. But in our Union where people, business and 
economies depend on each other, Europe is in a unique position to be able to invest in a 
sustainable recovery and future. This investment will be a common good for our shared 
future and will show the true and tangible value of being part of the Union. 

2 SWD(2020) 98 

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Designed  for  cohesion,  convergence  and  solidarity,  the  EU  budget  is  a  ready-made 
instrument.  It  is  tried,  transparent  and  trusted  by  all.  It  is  made  to  invest  in  commonly 
agreed programmes  and priorities and ensure that those who need more support get the 
investment they need to catch up.  

This  is  why  the  Commission  is  today  proposing  a  new  €750  billion  recovery 
instrument, Next Generation EU, embedded within a powerful and modern long-term 
EU budget. This is a historic and one-off proposal which reflects the scale and the size of 
the  challenge  facing  us.  The  full  breakdown  of  how  this  will  work  is  set  out  in  the 
accompanying  Communication3,  as  well  as  the  legal  texts  adopted  today.  The  main 
features are the following:  

Raising the money 

The  money  for  Next  Generation  EU  will  be  raised  by  temporarily  lifting  the  own 
resources ceiling to 2% of EU Gross National Income. This will allow the Commission 
to  use  its  very  strong  credit  rating  to  borrow  €750  billion  on  the  financial  markets  for 
Next Generation EU.  

The funds raised will need to be repaid through future EU budgets - not before 2028 and 
not after 2058. To help do this in a fair and shared way, the Commission will propose a 
number of new own resources. These could include a new own resource based on the 
Emissions  Trading  Scheme,  a  Carbon  Border  Adjustment  Mechanism  and  an  own 
resource based on the operation of large companies.  It  could  also  include a new digital 
tax,  building  on  the  work  done  by  the  Organisation  for  Economic  Co-operation  and 
Development  (OECD).  The  Commission  actively  supports  the  discussions  led  by  the 
OECD and the G20 and stands ready to act if no global agreement is reached. These will 
be  in  addition  to  the  Commission’s  proposals  for  own  resources  based  on  a  simplified 
Value Added Tax and non-recycled plastics.  

In  addition  to  Next  Generation  EU,  the  Commission  is  proposing  a  revamped  EU 
budget, amounting to some €1 100 billion between 2021-2027.  

Investing the money  

All  of  the  money  raised  through  Next  Generation  EU  and  the  new  EU  budget  will  be 
channelled  through  EU  programmes.  This  means  that  every  euro  of  investment  will  be 
made  available  to  get  Europe  back  to  its  feet,  to  accelerate  the  twin  green  and  digital 
transitions  and  build  a  fairer  and  more  resilient  society.  It  also  means  there  is  full 
transparency and democratic accountability for the European Parliament and Council. 
The money from Next Generation EU will be invested across three pillars, through €500 
billion in grants and €250 billion in loans to Member States.  

The first pillar is support to Member States for investment and reforms to address the 
crisis: 

3 COM(2020) 442 

4 

 
 
                                                 
  A  new  Recovery  and  Resilience  Facility  with  a  budget  of  €560  billion  – 
distributed  in  grants  and  loans.  This  will  support  Member  States  to  implement 
investments  and  reforms  that  are  essential  for  a  sustainable  recovery.  Member 
States  will  design  their  own  tailored  national  recovery  plans,  based  on  the 
investment  and  reform  priorities  identified  as  part  of  the  European  Semester,  in 
line  with  National  Climate  and  Energy  Plans,  Just  Transition  Plans  and 
Partnership Agreements and Operational Programmes under EU funds.  

  A  new  initiative,  REACT-EU,  will  provide  a  top-up  for  cohesion  support  to 
Member  States,  with  a  budget  of  €55  billion.  This  will  be  available  from  2020 
and  be  distributed  according  to  a  new  allocation  key  taking  into  account  the 
impact  of the crisis.  This  will ensure there is  no interruption in  funding  for key 
crisis  repair measures and support to  the most deprived.  It  will support workers 
and SMEs, health systems and the green and digital transitions and be available 
across sectors – from tourism to culture. 

  To  support  the  green  transition,  the  Commission  is  proposing  to  provide 
additional  funding  for  the  Just  Transition  Fund  and  the  European  Agricultural 
Fund  for  Rural  Development.  Cohesion  policy  programmes  will  also  be 
strengthened in the next EU budget period, also to allow for greater flexibility.  

The  second  pillar  is  about  kick-starting  the  EU  economy  by  incentivising  private 

investment.  

  A new Solvency Support Instrument will mobilise private resources to provide 
urgent support to otherwise healthy companies. Investment will be channelled to 
companies  in  the  sectors,  regions  and  countries  most  affected.  This  will  help  to 
level-up  the  playing  field  for  those  Member  States  who  are  less  able  to  support 
through State aid. It can be operational from 2020 and will have a budget of €31 
billion, aiming to unlock more than €300 billion in solvency support. Guidelines 
will be developed to help align investments towards EU priorities.    

  The  Commission  is  proposing  to  upgrade  InvestEU,  the  EU’s  flagship 

investment programme, more than doubling its capacity. 

  In addition to the above, a Strategic Investment Facility will be created within 
InvestEU. It will be able to unlock €150 billion of investment thanks to the €15 
billion  put  into  it  by  Next  Generation  EU.  This  will  invest  in  strengthening  our 
resilience and strategic autonomy across key technologies and value chains. 

The third pillar is about learning the lessons of the crisis: 

  The  Commission  is  proposing  to  create  a  new  standalone  EU4Health 
programme,  with  a  budget  of  €9.4  billion.  It  will  invest  in  prevention,  crisis 
preparedness,  the  procurement  of  vital  medicines  and  equipment,  as  well  as 
improving  long-term  health  outcomes.  A  number  of  other  key  programmes  will 
be  reinforced  to  learn  the  lessons  from  the  crisis,  notably  rescEU  and  Horizon 
Europe. 

5 

 
 
  To better support our global partners, both the Neighbourhood, Development 
and  International  Cooperation  Instrument  and  the  Humanitarian  Aid  Instrument 
will be strengthened.  

In addition to three pillars of spending through the Recovery Instrument, the Commission 
is  also  proposing  to  strengthen  a  number  of  other  programmes  in  the  EU  budget,  as 
compared to what was discussed by the European Council in February. These include the 
Common  Agricultural  Policy,  the  European  Maritime  and  Fisheries  Fund,  the  Single 
Market  Programme  and  programmes  supporting  cooperation  on  tax  and  customs,  the 
Connecting  Europe  Facility,  Erasmus+,  the  Creative  Europe  Programme,  the  Digital 
Europe Programme, the European Defence Fund, the Internal Security Fund, the Asylum 
and  Migration  Fund,  the  Integrated  Border  Management  Fund  and  pre-accession 
assistance.  

4.  REPAIR AND PREPARE THE NEXT GENERATION: THE POLICY FUNDAMENTALS  

This disruptive and changing crisis is first and foremost a human tragedy. Beyond 
continued  efforts  to  tackle  the  health  dimension,  the  EU  must  prioritise  the  social 
dimension  of  this,  notably  by  implementing  the  European  Pillar  of  Social  Rights.  We 
must invest in protecting and creating jobs and in driving our competitive sustainability 
by  building  a  fairer,  greener  and  more  digital  Europe.  We  must  repair  the  short-term 
damage from the crisis in a way that also invests in our long-term future. To achieve this, 
the EU must now show clarity of purpose and certainty of direction through its policies.  

4.1.  The European Green Deal: the EU’s growth strategy 

The  European  Green  Deal  is  Europe’s  growth  strategy.  To  ensure  we  use  it  to  its  full 
potential,  it  is  essential  that  Next  Generation  EU  drives  our  competitive  sustainability. 
Public investments in the recovery should respect the green oath to “do no harm". 
The priorities identified in the European Semester, National Energy and Climate Change 
Plans  (NECPs)  and  Just  Transition  Plans  should guide  this  investment.  The  investment 
guidelines  for  the  new  Solvency  Support  Instrument  will  also  reflect  the  need  to 
prioritise green investments. This will be supported by the 25% of the EU budget spent 
on climate investments and additional funding for Horizon Europe, reflecting the crucial 
role of research and innovation in driving the shift towards a clean, circular, competitive 
and climate neutral economy.  

To help unlock the private investment needed, long-term certainty and predictability are 
essential. This underlines the importance of the Climate Law and the upcoming proposals 
for more ambitious emissions reduction targets for 2030. The EU sustainable finance 
taxonomy will guide investment in Europe’s recovery to ensure they are in line with our 
long-term  ambitions.  This  will  be  supported  with  a  Renewed  Sustainable  Finance 
Strategy later this year. To ensure environmental and social interests are fully embedded 
into  business  strategies,  the  Commission  will  put  forward  a  new  initiative  in  2021  on 
sustainable corporate governance.  

This investment should help the European Green Deal become a job-creating engine. 
Meeting  the  existing  2030  climate  and  energy  targets  can  add  1%  of  GDP  and  create 
almost 1 million new green jobs. Investing in a more circular economy has the potential 

6 

 
 
to create at least 700,000 new jobs by 2030 and help the EU to reduce its dependency on 
external suppliers and increase its resilience to global supply issues.  

As well as providing long-term certainty, the green recovery must also help to kick-start 
Europe’s economy quickly and at the local level. The upcoming Renovation Wave will 
focus on creating jobs  in  construction, renovation and other labour-intensive industries. 
Through  regulatory  and  financial  support,  such  as  a  doubled  in  size  sustainable 
infrastructure  window  in  InvestEU,  the  aim  will  be  to  at  least  double  the  annual 
renovation rate of existing building stock. Member States will also be able to use funds 
from  the  Recovery  and  Resilience  Facility  for  this  purpose,  in  line  with  identified 
priorities  under  the  European  Semester  or  the  NECPs.  This  will  help  save  money  on 
energy bills, provide healthier living conditions and reduce energy poverty.  

In  the  same  spirit,  the  Commission  will  also  focus  on  unlocking  investment  in  clean 
technologies  and  value  chains,  notably  through  the  additional  funding  for  Horizon 
Europe.  The  new  Strategic  Investment  Facility  will  invest  in  technologies  key  for  the 
clean  energy  transition,  such  as  renewable  and  energy  storage  technologies,  clean 
hydrogen,  batteries,  carbon  capture  and  storage  and  sustainable  energy  infrastructure. 
The  work  of  the  European  Battery  Alliance  will  be  fast-tracked  and  the  new  Clean 
Hydrogen Strategy and Alliance will steer and coordinate the rapid upscaling of clean 
hydrogen  production  and  use  in  Europe.  The  Commission  will  also  make  proposals  to 
boost uptake of offshore renewable energy and to better integrate the energy system.  

The  crisis  has  also  demonstrated  the  crucial  role  that  transport  plays,  with  interrupted 
transport and logistic routes across all modes hitting our value chains and economies. To 
help  create  more  jobs,  there  will  also  be  a  focus  on  accelerating  the  production  and 
deployment  of  sustainable  vehicles  and  vessels  as  well  as  alternative  fuels.  The 
Connecting Europe Facility, InvestEU and other funds will support the financing of the 
installation  of  one  million  charging  points,  clean  fleet  renewals  by  cities  and 
companies,  sustainable  transport  infrastructure  and  enable  the  shift  to  clean  urban 
mobility. Public investment to relaunch the recovery of the transport sector should come 
with a commitment from industry to invest in cleaner and more sustainable mobility.  

Protecting  and  restoring  biodiversity  and  natural  ecosystems  is  key  to  boosting  our 
resilience and preventing the emergence and spread of future outbreaks.. This redoubles 
the  importance  of  the  recently  adopted  EU  Biodiversity  Strategy  for  2030  and  the 
upcoming  EU  Forest  Strategy.  Under  InvestEU  a  new  natural  capital  and  circular-
economy initiative will mobilise at least €10 billion over the next 10 years. 

The  Common  Agricultural  Policy  and  the  Farm  to  Fork  Strategy  will  support  our 
farmers  and  agricultural  sector  to  thrive  and  continue  to  provide  us  with  the 
affordable, nutritious, safe and sustainable food we need, while strengthening our supply 
chains and addressing the issues that were exposed during the crisis. Given the vital role 
of farmers and rural areas in the green transition, the Commission is today proposing to 
reinforce the budget for the European Agricultural Fund for Rural Development  by 
€15 billion.  

Many people, regions and sectors hit hardest by the crisis will also have to make a bigger 
change than most. This is why the Commission is today proposing to strengthen the Just 

7 

 
 
Transition Fund with an additional €32.5 billion. This funding will be used to alleviate 
the  socio-economic  impacts  of  the  transition,  supporting  re-skilling,  helping  SMEs  to 
create  new  economic  opportunities,  and  investing  in  the  clean  energy  transition.  The 
Commission  is  also  making  proposals  to  set  up  the  new  public  sector  loan  facility  that 
forms the third pillar of the Just Transition Mechanism. This will be supported by €1.5 
billion from the EU budget and €10 billion in lending by the European Investment Bank. 

4.2 A deeper and more digital single market  

The  pandemic  and  its  consequences  on  our  lives  and  economies  have  highlighted  the 
importance of digitisation across all areas of EU economy and society. New technologies 
have  kept  our  businesses  and  public  services  running,  and  made  sure  that  trade  could 
continue  flowing.  They  have  helped  us  all  to  stay  connected,  to  work  remotely  and  to 
support our children’s learning.  

In the long run, this is likely to trigger permanent and structural changes in societal and 
economic life: more teleworking, e-learning, e-commerce, e-government. This highlights 
the potential of developing a universally accepted e-ID - public electronic identity – to 
allow for simple, trusted and secure access to cross-border digital public services. 

Four  elements  will  be  key  for  a  digital  recovery,  helping  to  stimulate  competitive 
innovation and to provide users with greater choice. 

First, we will need to invest in more and better connectivity. The rapid deployment of 
5G  will  have  spill-over  effects  across  the  whole  digital  society  and  increase  Europe’s 
strategic autonomy. This will support wider efforts to build infrastructure that can handle 
emerging  and  future  processes  and  applications.  It  will  also  provide  the  necessary 
bandwidth for health, education, transport, logistics and media which are essential for our 
resilience, competitiveness and economic recovery.   

Second,  we  will  need  a  stronger  industrial  and  technological  presence  in  strategic 
parts of the digital supply chain. Just as it became clear how important connectivity and 
digital  technologies  are,  we  are  also  reminded  of  the  importance  of  security  of 
technology. This reaffirms the need for Europe to have tech sovereignty where it matters, 
as well as keeping open trade and the flow of innovation going.  

In this spirit, recovery investment will be channelled towards strategic digital capacities 
and capabilities, including artificial intelligence, cybersecurity, secured communication, 
data  and  cloud  infrastructure,  5G  and  6G  networks,  supercomputers,  quantum  and 
blockchain. This will be a priority in the Recovery and Resilience Facility, InvestEU and 
the  Strategic  Investment  Facility.  The  investment  guidelines  for  the  new  Solvency 
Support  Instrument  will also  reflect  the  need  to  prioritise  digital  investments.  This  will 
also help to bridge Europe’s digital divide, which has become even more apparent during 
the crisis. 

Third, we must build a real  data economy as  a motor for innovation and job  creation.  
Data offers opportunities for businesses to  develop products  and services. To make the 
most  of  this,  we  need  common  European  data  spaces  in  key  sectors  and  areas, 
including  in  support  of  European  industry,  the  implementation  of  the  European  Green 
Deal, health, mobility and public administration.  

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To bring this to life, the Commission will present legislative action on data sharing and 
governance  to  help  put  in  place  the  right  structures  to  handle  data  sharing  across 
Member States and sectors, tackle barriers to digital trade and make Europe fit and able 
to compete in the 21st global economy. This will facilitate the setting up of common data 
spaces and strengthen governance on issues such as data portability or access. This will 
be  followed  by  a  Data  Act,  which  will  establish  the  conditions  for  better  access  and 
control  of  industrial  data.  The  Commission  will  also  propose  to  make  high  value 
government  datasets  available  for  the  common  good  through  more  open  access  for 
research, innovation and SMEs. 

The  fourth  element  is  the  need  for  a  fairer  and  easier  business  environment,  The 
extended  lockdown  boosted  internet  shopping  and  online  business  models.  This  trend 
will only accelerate in the months and years to come, with more companies switching to 
digital  to  do  business.  However,  the  online  environment  is  currently  dominated  by  a 
number of large platforms. Their position – and their greater access to key data resources 
–  has  an  impact  on  the  ability  of  smaller  European  companies  to  start  up,  scale  up  or 
make the most of the Single Market.  

These issues must be addressed if Europe is to make the most of the digital recovery. In 
this spirit, one of the aims of the new Digital Services Act will be to improve the legal 
framework for digital services, with clear rules for online platforms. It will offer greater 
security  for  consumers  online,  prevent  the  abuse  of  market  power  by  platforms  and 
ensure a fair market place with equal opportunities for smaller businesses.  

We  must  also  focus  on  reducing  administrative  burden  and  making  it  easier  for 
companies, especially SMEs, to use digital tools, such as e-signature. They need support 
to get easier access to data and reduce red tape through digital solutions, for example for 
contracts.  The  use  of  one-stop  support  shops  and  simplifying  online  administrative 
procedures should be encouraged.  

Digitisation  of  public  procurement,  including  by  developing  national  e-procurement 
systems  and  platforms,  will  be  prioritised.  This  will  be  supported  by  the  full 
implementation of the company law package to facilitate the digitisation and mobility of 
companies and of the single digital gateway.  

During  the  last  weeks,  we  have  also  witnessed  an  extraordinary  increase  in  malicious 
attacks  from  multiple  sources,  attempting  to  capitalise  on  the  disruption  caused  by  the 
pandemic  for  criminal  or  for  geopolitical  reasons.  Improving  the  digital  capabilities  of 
law enforcement will preserve their ability to protect citizens effectively. The digitisation 
of  justice  systems  can  improve  access  to  justice  and  the  operation  of  the  business 
environment. 

A  new  Cybersecurity  Strategy  will  look  at  how  to  boost  EU-level  cooperation, 
knowledge and capacity. It will also help Europe strengthen its industrial capabilities and 
partnerships,  and  encourage  the  emergence  of  SMEs  in  the  field.  This  will  accompany 
the  review  of  the  Directive  on  security  of  network  and  information  systems  and  a 
proposal for additional measures on Critical Infrastructure Protection. Together with the 
ongoing  work  on  cybersecurity  as  part  of  the  EU  Security  Union,  this  will  increase 
capabilities within Member States and boost the EU’s overall cybersecurity. 

9 

 
 
4.3.  A fair and inclusive recovery 

This  crisis  is  a  human  tragedy.  Europe  must  do  everything  it  takes  to  ensure  that  what 
started as a health pandemic – and became an economic emergency – does not become a 
fully blown social crisis. Millions of people across the EU have either lost their job or are 
on short-time work schemes and millions more could  be at  risk given the high-level  of 
uncertainty.  

Supporting people to stay in work, and creating new jobs, will drive our efforts. In the 
short  term,  the  new  temporary  instrument  to  mitigate  unemployment  risks  in  an 
emergency (SURE) will provide 100 billion EUR to help workers keep their income and 
ensure businesses can stay afloat and retain staff. The Commission will build on this, as 
well as on the experiences of newly created short-term work schemes in many Member 
States, when proposing a permanent instrument in the future.  

The  new  Solvency  Support  Instrument  will  help  keep  companies  in  business  and 
people in work. The European Investment Bank’s the new pan-European guarantee fund 
will be able to support SMEs who employ around two-thirds of the EU’s workforce. The 
regions most affected by the crisis will be able to access fast and flexible support under 
the  new  REACT-EU  initiative.  In  the  medium  to  longer  term,  efforts  to  restore  a  fully 
functioning Single Market, as well as the investment made through Next Generation EU, 
will create new jobs across the economy, notably in the green and digital transitions.   

All of this reflects the need for the recovery to be fair and inclusive. It must address the 
disparities  and  inequalities  either  exposed  or  exacerbated  in  the  crisis  and  promote 
territorial  cohesion.  The  starting  point  is  solidarity:  between  people,  generations, 
regions  and  countries.  This  will  need  to  be  done  in  close  cooperation  with  social 
partners, civil society and other stakeholders. Our compass to achieve this will remain the 
European Pillar of Social Rights.  

The  EU  will  ensure  that  equality  is  at  the  heart  of  the  recovery.  A  prosperous  and 
social  Europe  depends  on  us  all,  irrespective  of  sex,  racial  or  ethnic  origin,  religion  or 
belief, disability, age or sexual orientation. This is doubly important in a crisis which has 
had disproportionate impact on a number of groups in society. 

Ensuring that all workers in the EU earn a decent living will be essential for the recovery. 
When  set  at  adequate  levels,  minimum  wages  help  vulnerable  workers  to  build  up  a 
financial buffer during good times and limit the fall in income during bad times. Given 
women are overrepresented and underpaid in many front-line jobs, the need to close the 
gender  pay  gap,  including  through  binding  pay  transparency  measures,  becomes  all 
the more important.   

Reinforced youth employment support will help young people get into work, training 
or education, while a strong social economy can offer unique opportunities to help most 
vulnerable to return to the labour market. 

The virus has also been particularly painful for the elderly, who are hit hardest from the 
virus  and  are  the  most  secluded  in  their  homes.  The  Commission’s  upcoming  work  on 
ageing  and  on  persons  with  disabilities  will  take  into  account  the  experience  and  the 
lessons  of  the  crisis.  At  the  other  end  of  the  scale,  we  also  need  to  mitigate  the  crisis’ 

10 

 
 
impact  on  children.  The  Commission  will  propose  the  European  Child  Guarantee  in 
2021 to ensure that all children have access to basic services like health and education.  

Everyone will benefit from Europe’s recovery and everyone must contribute to making it 
happen.  To  ensure  that  solidarity  and  fairness  is  at  the  heart  of  the  recovery,  the 
Commission will step up the fight against tax fraud and other unfair practices. This will 
help Member States generate the tax revenue needed to respond to the major challenges 
of  the  current  crisis.  A  common  consolidated  corporate  tax  base  would  provide 
business  with  a  single  rulebook  to  compute  their  corporate  tax  base  in  the  EU.  Tax 
simplification can improve the business environment and contribute to economic growth. 

The crisis is a test for our social protection systems and necessary investments need to fill 
the gaps in coverage that have become apparent in the crisis, for instance for those self-
employed. This was in particular the case for platform workers who in many cases fall 
outside  the  scope  of  EU  labour  legislation  and  therefore  need  to  be  provided  with  fair 
working conditions and adequate social protection.  

As Europe sets off on its path to  recovery towards a greener, digital  and more resilient 
economy and society, the need to improve and adapt skills, knowledge and competences 
becomes  all  the  more  important.  The  crisis  has  also  shown  the  importance  of  digital 
skills,  for  children,  students,  teachers,  trainers  and  all  of  us  to  communicate  and  work. 
The Commission will come forward with a Skills Agenda for Europe and an updated 
Digital Education Action Plan. 

The  lockdown  of  society  also  proved  to  be  a  time  of  fear  and  suffering  for  victims  of 
domestic  violence  and  abuse,  with  evidence  of  a  substantial  increase  of  cases.  The  EU 
will  do  all  it  can  to  prevent  and  combat  gender-based  violence,  support  and  protect 
victims  of  such  crimes,  and  hold  perpetrators  accountable  for  their  abusive  behaviour. 
The  Victims’  Rights  Strategy  will  pay  particular  attention  to  the  specific  needs  of 
victims of gender-based violence. 

5.  BUILDING A MORE RESILIENT UNION AND SINGLE MARKET  

The  pandemic  has  served  to  reaffirm  the  interdependence  of  our  economies  and  the 
importance  of  a  fully  functioning  Single  Market.  Member  States  have  shared  the  gains 
from the Single Market for almost thirty years and, for some, intra-EU trade amounts to 
over  70%  of  exports.  Our  industrial  ecosystems  are  increasingly  integrated  and 
connected.  Research,  engineering,  manufacturing,  assembly  and  servicing  often  take 
place in different parts of Europe, and allow businesses to be more competitive and focus 
on what they do best. This will be exactly what is needed for Europe’s recovery.  

The  crisis  has  also  broken  up  parts  of  our  productive  tissue  and  has  affected  crucial 
supply chains. This disruption of production and decline in demand in one Member State 
will have a significant impact in others. If not addressed, this could lead to closures and 
job losses and will ultimately hamper our competitiveness and the speed of recovery in 
other Member States.  Given the scale and the nature of this challenge, the response 
can only be European.  

This starts with ensuring that our Single Market works properly again.  Three out of 
the  four  freedoms  were  severely  impacted  by  the  pandemic:  people,  goods,  services. 

11 

 
 
Following initial issues, the decisive action taken to ensure the free movement of goods 
and products helped our grocery shops stay open and many of our factories to continue 
working.  The  free  movement  of  people  was  essential  to  allow  transport,  seasonal  and 
other workers to keep supply chains going.  

These  actions  helped  ensure  basic  business  continuity  but  recovery  will  mean  fully 
reinstating  all  four  freedoms.  We  must  continue  reducing  our  regulatory  burden 
simplifying  our  internal  market  rules  and  ensuring  they  are  fully  enforced  and 
implemented.  The  new  Single  Market  Enforcement  Task  Force  will  be  essential  to 
identify and address barriers that arise due to improper application or enforcement. It will 
ensure the full implementation of the Single Market Enforcement Action Plan adopted in 
March.  

To maintain the level playing field and keep the Single Market working, the Commission 
is  proposing  a  new  tool,  the  Solvency  Support  Instrument,  to  provide  support  to 
healthy companies who are now at risk because of the economic shutdown. They should 
be supported to get easier and quicker access to finance. This highlights the importance 
of  completing  the  Capital  Markets  Union  and  the  Banking  Union,  key  elements  in 
the  deepening  of  the  Economic  and  Monetary  Union.  This  will  help  provide  economic 
and  financial  stability  throughout  the  recovery  and  strengthen  our  resilience  to  future 
shocks.  The  Commission  will  also  draw  its  conclusions  on  the  review  of  economic 
governance after the crisis. 

The crisis has also tested the EU competition framework, which was adapted quickly to 
allow especially indispensable national support through State aid. At the same time, it is 
important that these temporary flexibilities does not cause long-term fragmentation in the 
Single  Market.  EU  competition  policy  is  essential  to  ensuring  a  level  playing  field  in 
today’s  economy,  driving  innovation  and  giving  consumers  more  choice.  It  brings  the 
best out of our companies and enables them to stay competitive globally. As Europe sets 
out  on  its  recovery  path  and  speeds  up  the  twin  transitions,  we  should  ensure  that 
competition rules remain fit for today’s world. To make this happen, the Commission is 
currently reviewing the EU competition framework.  

The  crisis  has  also  revealed  a  number  of  vulnerabilities  and  a  significant  increase  in 
certain  crimes,  such  as  cybercrime.  This  shows  the  need  to  reinforce  the  EU  Security 
Union. As part of this, the EU Security Union Strategy will address these challenges and 
build on the work for a secure internal market and society. 

The crisis has also put a severe strain on Member States’ asylum systems and on border 
management in the European Union. The new Pact on Migration and Asylum will seek 
to  make  the  EU’s  management  of  asylum,  migration  and  borders  more  effective,  fairer 
and flexible enough to respond to crises.   

5.1.  Open strategic autonomy and strong value chains  

The crisis has also revealed a number of areas where Europe needs to be more resilient to 
prevent, protect and withstand future shocks. We will always be committed to open and 
fair trade but must be aware of the need to reduce dependency and strengthen security of 
supply, notably for things like pharmaceutical ingredients or raw materials.  

12 

 
 
To  do  this,  Europe  must  focus  on  enhancing  its  strategic  autonomy,  economic  security 
and potential for job creation. The Commission is proposing a new Strategic Investment 
Facility  to  support  cross-border  investments  to  help  strengthen  and  build  European 
strategic value chains. It will incentivise European industrial and business leadership in a 
number of key ecosystems, notably those linked to the twin green and digital transition. 
This  will  strengthen  the  Single  Market,  underpin  the  new  EU  industrial  strategy4  and 
contribute to a more circular economy. 

A new pharmaceutical strategy will address risks exposed during the crisis which affect 
Europe’s  strategic  autonomy  and  will  also  support  the  building  of  additional 
pharmaceutical manufacturing and production capacities in Europe. 

With the transition to climate-neutrality, the reliance on available fossil fuels risks to be 
replaced with reliance on other non-energy raw materials, for which global competition is 
becoming more intense. Waste prevention, boosting recycling and increasing the use of 
secondary raw materials will help reduce this dependency. New investments in recycling 
will help provide for strategic secondary raw materials. A new Action Plan on Critical 
Raw Materials will also look at how to strengthen crucial markets in a sustainable way 
for  e-mobility,  batteries,  renewable  energies,  pharmaceuticals,  aerospace,  defence  and 
digital  applications.  This  will  be  supported  by  the  full  implementation  of  the  Circular 
Economy Action Plan.  

Global trade and its integrated value chains will remain a fundamental growth engine and 
will be essential for Europe’s recovery. With this in mind, Europe will pursue a model of 
open strategic autonomy. This  will mean shaping the new system  of global  economic 
governance  and  developing  mutually  beneficial  bilateral  relations,  while  protecting 
ourselves from unfair and abusive practices. This will also help us diversify and solidify 
global  supply  chains  to  protect  us  from  future  crises  and  will  help  strengthen  the 
international role of the euro. In this spirit, the EU will undertake a Trade Policy Review 
to ensure the continuous flow of goods and services worldwide and to reform the World 
Trade Organization.  

At  the  same  time,  the  EU  also  needs  to  protect  its  strategic  assets,  infrastructure  and 
technologies  from  foreign  direct  investments  that  could  threaten  its  security  or  public 
order, through a reinforced Foreign Direct Investment screening mechanism. In this 
crisis,  state  subsidies  from  third  countries  have  the  potential  of  further  un-levelling  the 
playing field in the Single Market. This will be addressed in the upcoming Commission 
White Paper on an instrument on foreign subsidies.  A swift agreement on the proposed 
International Procurement Instrument will also be essential to strengthen the EU’s ability 
to negotiate reciprocity and market opening with its partners.  

Should differences in climate ambition levels around the world persist, the Commission 
will  propose  a  Carbon Border  Adjustment  Mechanism  in  2021  to  reduce  the  risk  of 
carbon leakage, in full compatibility with WTO rules. This would be a new own resource 
for the EU budget, helping to repay funds raised for Next Generation EU in the future. 

4 COM(2020) 102 

13 

 
 
                                                 
5.2.  Stronger coordination on public health and enhanced crisis management 

The  public  health  crisis  our  Union  currently  faces  has  shown  the  strength,  skill  and 
courage  of  Europe’s  healthcare  workers.  However,  our  public  health  systems,  which 
remains some of the best and most accessible anywhere in the world, have come under 
severe strain. And coordination between Member States on health issues was also tested 
in the immediate onset of the crisis.  

With this in mind, and in order to improve joint preparedness for future health crises, the 
Commission will propose to strengthen the European Medicines Agency in monitoring 
production  and  supply  of  essential  medicines  in  the  EU  to  avoid  shortages.  It  will  also 
give  a  stronger  role  for  the  European  Centre  for  Disease  Prevention  and  Control 
(ECDC) in coordinating surveillance, preparedness and response to health crises.  

The EU’s health regulatory framework should also be strengthened and the use of joint 
procurements for health supplies increased. This would learn the lessons from the crisis, 
starting with the procurement of vaccines in the immediate term. We will also propose to 
create  a  European  Health  Data  Space  to  promote  health-data  exchange  and  support 
research in full respect of data protection. 

More  resilient  health  systems  need  the  proper  investment  and  financial  support  that 
matches their leading role. The Commission is today proposing a standalone EU4Health 
programme to support Member States and the EU to build up capacity and preparedness 
for  future  health  crises.  It  will  help  deliver  a  long-term  vision  for  well-performing  and 
resilient  public  health  systems,  notably  by  investing  in  disease  prevention  and 
surveillance, and improving access to healthcare, diagnosis and treatment.  

Research  and  innovation  will  be  essential  to  increase  our  knowledge  of  diseases, 
treatments  and  vaccines,  and  strengthen  our  autonomy  and  leadership  in  value  chains. 
This  is  why  as  part  of  the  next  long-term  budget,  the  Commission  is  proposing  to 
reinforce Horizon Europe to support research and innovation in the health field, extend 
clinical trials, improve access to research infrastructure and help anchor sound science at 
the heart of the policy process. 

The current crisis has also emphasised the need for coordination and crisis response at 
European  level.  While  coordination  between  Member  States  picked  up  quickly  after  a 
slow start, there is a need to learn the lessons of the crisis. This means putting in place 
stronger crisis preparedness and crisis management for future scenarios.  

The  Commission  is  today  proposing  to  strengthen  rescEU  to  build  the  permanent 
capacity to handle all types of emergencies. This will strengthen its capacity to invest in 
emergency  response  infrastructure,  transport  capacity  and  emergency  support  teams.  It 
will  create  a    EU-level  reserves  of  essential  supplies  and  equipment  to  be  mobilised in 
response to major emergencies. 

Another lesson is the need for a fast, flexible and coordinated EU response to crises. In 
this spirit, the Commission is proposing to strengthen its emergency tools and make them 
more  flexible  so  resources  can  be  deployed  quickly  and  at  scale  when  needed.  This 
includes the European Solidarity Fund and the European Globalisation Adjustment Fund. 

14 

 
 
The Solidarity and Emergency Aid Reserve will also be significantly strengthened to 
enable a rapid response to crises both within and outside the EU. 

6.  A RECOVERY BASED ON EU VALUES AND FUNDAMENTAL RIGHTS 

The crisis is testing Europe’s way of life. To help save lives, some of our freedoms have 
been constrained. Essential elements that make our society work have often been put on 
hold.  Our  democratic  resilience  has  been  tested.  However,  Europe  must  never 
compromise  on  its  values.  The  recovery  must  be  based  on  fundamentals  rights  and 
full respect of the rule of law.   

In  the  face  of  the  crisis,  all  Member  States  had  to  adopt  emergency  measures.  The 
Commission  made  clear  from  the  onset  that  emergency  measures  must  be  strictly 
proportionate  and  limited  in  time  and  in  nature.  All  such  measures  must  be  subject  to 
regular scrutiny and all rights respected in full.  

The  crisis  has  also  exposed  a  number  of  vulnerabilities  in  the  rule  of  law.  This  ranged 
from  the  stress  on  justice  systems  to  the  uneven  capacity  of  institutional  checks  and 
balances to work effectively. Media and civil society faced new obstacles in playing their 
role in the democratic debate. The Commission’s Annual Rule of Law Report will look 
closer into this  across  all  Member States. The Commission’s proposal  for a Regulation 
on the protection of the EU budget against generalised deficiencies in the rule of law 
will also be a key feature. 

The crisis also highlighted threats to our democracy. It brought with it a new “infodemic” 
from  those  wanting  to  manipulate  the  public  space  and  spread  false  messages, 
propaganda and hate narratives. While upholding freedom of expression and supporting 
media,  the  Commission  will  address  the  most  immediate  disinformation  challenges 
linked to the pandemic and will also use the European Democracy Action Plan to draw 
the lessons and build resilience for the future.  

All  of  this  reflects  the  even  more  important  need  to  strengthen  and  nurture  our 
democracy.  This  starts  with  giving  people  a  greater  say  in  their  future.  Through  the 
Conference on the Future of Europe, citizens should play a leading and active part in 
setting  our  priorities  and  our  level  of  ambition  in  building  a  more  resilient,  sustainable 
and fair Europe.  

7.  A STRONGER EUROPE IN THE WORLD  

The pandemic and the economic crisis will redefine the way in which global powers and 
partners interact. The threat of a potential erosion and fragmentation of the global order 
has markedly increased. At the same time, a virus that knows no borders creates a shared 
challenge  and  makes  a  strong  and  urgent  case  for  strengthened  multilateralism  and 
international  rules-based  order. 
than  ever,  global  challenges  require 
international cooperation and common solutions. 

  More 

The ties between us need continued maintenance to adapt to new realities and to face the 
disruptive developments of the 21st century. The world must avoid a global ‘great game’ 
to come out first and on top, to the detriment of others. It should focus on what it can do 

15 

 
 
together,  from  security  to  climate  and  environment,  from  fighting  inequalities  to 
strengthening international trade and international institutions. 

The  EU  is  leading  the  global  response,  working  closely  with  the  United  Nations 
(including the World Health Organisation and the International Labour Organisation), the 
G20, the G7, the International Monetary Fund and the World Bank. In doing so, the EU 
and its Member States will need to leverage their collective strength on the global stage. 

In this spirit, the Commission hosted a pledging conference to raise €7.5 billion for the 
development  of  vaccines,  treatments  and  tools  as  a  global  common  good.  Any  future 
vaccine must be produced by the world, for the whole world and be affordable and 
accessible for all. 

In the longer-term, the EU will only successfully recover if our partners around the world 
also recover. Investing in a sustainable global recovery is therefore in the EU’s interest. 
This will require a massive and coordinated response, driven by international solidarity, 
openness and leadership. As a leading economic power and the world’s largest donor of 
international  aid,  the EU will always  be open and ready  to  support its partners. This  is 
illustrated  by  the  more  than  €23  billion mobilised  by  Team  Europe  to  support  partner 
countries  and  international  organisations  to  face  the  humanitarian,  health,  social  and 
economic impact of the crisis. 

The EU has provided support to its partners and neighbours throughout this crisis and is 
ready  to  do  more.  To  help  make  this  happen,  the  Commission  is  today  proposing  to 
reinforce 
the  Neighbourhood,  Development  and  International  Cooperation 
Instrument  by  setting  it  at  a  level  of  €86  billion.  A  strengthened  Humanitarian  Aid 
Instrument will ensure Europe can provide tangible solidarity to those most in need. To 
support  our  partners  in  the  Western  Balkans,  the  Commission  is  proposing  to  increase 
pre-accession assistance to €12.9 billion.  

With the crisis sparking a further increase geostrategic tensions, Europeans need to take 
greater  responsibility  in  ensuring  their  own  safety.  In  cooperation  with  its  partners,  the 
EU must further strengthen its role as a security provider and a pillar of stability in the 
world order. To that end, it will continue upholding multilateralism and more effectively 
promote  its  economic  and  strategic  interests.  It  must  also  strengthen  its  technological 
autonomy and cooperation in the development of defence capabilities.   

8.  CONCLUSION – EUROPE’S MOMENT 

This  is  Europe’s moment.  Our willingness  to  act must live up to  the challenges we are 
facing. National efforts alone will not be enough  - Europe is in a unique position to be 
able to invest in a collective recovery and a better future for next generations.  

This is our defining generational task. The investment we make through Next Generation 
EU  will  not  only  help  kick-start  the  economies  and  support  workers,  companies  and 
regions today. It will invest in the future and make us more resilient so that we emerge 
stronger  and  further  forward  than  before.  We  will  accelerate  the  twin  green  and  digital 
transition and make sure that people are at the heart of the recovery.  

16 

 
 
 
The  European  Commission  invites  the  European  Council  and  the  co-legislators  to 
examine  these  proposals  rapidly,  with  a  view  to  reaching  a  political  agreement  at  the 
European  Council.  An  early  decision  will  allow  funds  to  be  available  immediately  and 
address the most urgent areas.  

The Commission will then work closely with the European Parliament and the Council to 
finalise an agreement on the future long-term framework and the accompanying sectoral 
programmes. Completing this work in the early autumn would mean that the new long-
term budget could be up and running and driving Europe’s recovery on 1 January 2021.  

Europe’s  recovery  and  building  a  better  future  for  the  next  generation  will  not  be  easy 
and it cannot be done alone. This will need political will and courage and buy-in from all 
of society. This is a common good for our shared future.  

17