Germany: The Recovery Fund could be used in a different way due to the war in Ukraine

The EU Recovery Fund, which was launched to help the EU countries combat the economic consequences of the Covid-19 pandemic, could be also used in a different way due to the war in Ukraine, the German finance minister said today.

“Given the conditions, I am open to prioritising the available resources,” the German Finance Minister and leader of the business-friendly FDP, Christian Lindner, told the Frankfurter Allgemeine Sonntagszeitung.

Lindner added that what is needed is “investment in infrastructure, energy and competitiveness, but not other state expenditures and postponed reforms”.

Risks

In an unprecedented move to avoid economic fragmentation due to the pandemic, EU countries agreed, in 2020, to jointly borrow 800 billion euros to rebuild their economies so as to become greener and more digital.

In a few weeks, the EU will discuss whether more common borrowing is needed in order for the EU countries to be able to address the challenges posed by the Russian invasion of Ukraine, the European Commissioner for Economy, Paolo Gentiloni, declared on Tuesday.