• European Commission President Ursula von der Leyen has outlined a recovery package to help EU Member States rebuild after the coronavirus crisis.
  • She said investment in rebuilding would come at the price of increasing debt.
  • But she stressed the recovery is an opportunity to build a 'modern, clean and healthy' economy.

The COVID-19 crisis should be seen as an opportunity for the European Union to rebuild its economy as "modern, clean and healthy", believes Ursula von der Leyen.

In a speech to the European Parliament in Brussels, the head of the European Commission outlined a recovery package to help Member States get back on their feet.

It consists of the European budget or Multiannual Financial Framework (MFF) and a new recovery instrument, and will be spent across three pillars: strengthening health and investment, while helping the transition to a digitalized, carbon-neutral, resilient Europe.

Von der Leyen recognized the impact of the three-month-long economic shutdown, and the time it would take to recover.

"Our economies and societies will open slowly, cautiously and gradually. While schools stay shut, most parents will have to continue to home-office. And while social distancing measures rightly stay in place, businesses will have to rethink their workplaces and way of working.

"In other words: we will recover but it will take time."

Real gross domestic product growth rate forecasts in selected European countries from 2020 to 2021
How coronavirus has impacted on European economies
Image: Statista

She noted that the crisis had not affected all EU Member States' economies equally, with those built on tourism suffering more, and that Italy and Spain were worst affected because they were hit first.

But she said it's crucial to keep the environment in mind as countries begin to recover.

"Sooner or later, our scientists and researchers will develop a vaccine against coronavirus. For climate change, however, there is no vaccine. This is why Europe must now invest in a clean future."

The cost of investing in rebuilding after the crisis would be rising debt that would be inherited by future generations, von der Leyen said, increasing the need to ensure the climate crisis was also dealt with.

"At the very least, we must use that money to invest in their future, by addressing climate change, reducing the climate impact and not adding to it.

"As we come out of the crisis, we must not fall into old habits, we must not hold onto yesterday's economy as we rebuild.

"On the contrary, we must boldly use this opportunity to build a modern, clean and healthy economy, which secures the livelihoods of the next generation."