Blumel of Austria is convinced that EU covide funds will continue, despite the German court

LONDON – Austria’s chief financial officer believes there is no need to worry about EU recovery funds, with investors increasingly concerned about the much-needed post-pandemic cash delay.

The EU agreed in July to exploit financial markets in search of € 750 billion ($ 898 billion) to distribute to the 27 nations and support their economies after the coronavirus shock. However, in order to receive these funds, countries had to detail how they would use them – a process that has not yet ended.

In addition, the German constitutional court has thrown a curve on the process. Last month, he raised doubts about it and effectively stopped the necessary legislative steps in Germany before the funds could be released.

“Of course, we have been following the developments of the German court quite closely. To some extent, they stipulate what many critics say that there is a danger of implementing temporary measures on a permanent basis,” said Austrian Finance Minister Gernot BlümeI. Friday for CNBC.

The German court acted after a group called the Citizens’ Will Alliance complained that the EU treaties did not allow the bloc to assume joint debts. German judges said the federal government should ensure that EU-level loans “do not become a permanent solution” – an opinion shared by Austria.

“I can understand what the German court has said and in some parts I agree,” he said, adding that Austria is “a little more skeptical when it comes to permanent debt pooling in the European Union” compared to France and Germany. .

“That is not why the Union was designed. And now we have 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 reason, “BlümeI told CNBC’s” Squawk Box Europe “on Friday.

Another element is needed before the funds can be released: all EU Member States must complete the ratification process in their national parliaments. Austria is among the 10 EU nations that have not yet done so, and without it, the EU cannot reach its debt markets.

“I am convinced that there will be no delay in being able to issue those European bonds as well, because it is an important measure to revive the European economy,” said the Austrian chief financial officer, when asked why his country had not yet taken the step.

“We have agreed on these measures, Austria is paying a large part of 12 billion euros in this pot and we are doing this because we believe it is the right way to increase growth in the European market, because all European citizens will benefit from it,” he said. added.

Austria, like other EU countries, has struggled to launch Covid-19 vaccines to its citizens quickly.

But Chancellor Sebastian Kurz confirmed last weekend that negotiations for the purchase of the Russian Sputnik V vaccine have ended, even though the blow has not yet been approved by the European Medicines Agency.

BlümeI said that Austria had complied with the rules and “tried to get more doses for vaccination, just to be faster in recovering the economy and to restore people’s freedom”.

“I can’t see anything wrong with that,” he said.

Several eastern EU nations, such as Hungary, have decided to go beyond the agreements negotiated by the European Commission to purchase more vaccines themselves, even though they have not received medical approval in the whole bloc.

Speaking to CNBC, BlümeI said he was optimistic that in the next two to three months, Austria will vaccinate its entire adult population who want to receive a vaccine.