The plan designed by the European Commission does not respond to the existing needs following the healthcare, economic and social crisis

Jul 20, 2020

The 15th of July ELA presented a document that includes its proposals to face up to the impact that COVID-19 has caused and it criticises the plan designed by the European Commission that “does not respond to the existing needs following the healthcare, economic and social crisis.” According to ELA, the increase in the public deficit should not mean subsequent structural adjustments. This entails a radical change in the tax policy.

At the end of May, the European Commission was obliged to present Next Generation EU, its recovery plan after the COVID-19 crisis for the 2021-2027 period. The Next Generation EU Plan is part of this reinforcement, with an endowment of 750,000 million euros. The proposal for this amount is as follows: 500,000 million as transfers or subsidies and 250,000 million as loans.

According to ELA, the Next Generation EU proposal does not respond to the existing needs following the healthcare, economic and social crisis that we have suffered after the Covid-19 epidemic. Expectations are being raised that the solution to all the problems is going to come from these European funds. It is obvious that this is not going to be the case, neither the amount, the deadlines nor their destination, nor due to the conditional nature of the policies that they are going to involve.

ELA demands that the economic costs of the crisis are basically paid for by an increase in the taxes to be paid by the highest incomes, companies and the capital, which would allow the public budget to be substantially increased. The increase in the public deficit should not mean subsequent structural adjustments. This leads to a radical change in tax policy. A significant tax should also be imposed on capital flows.

It also advocates the total dismantling of tax havens and a greater control over tax evasion.

Mikel Noval, head of social policy and Xabier Zabala, a member of the research office took part in the presentation of the report.

In spite of the importance of the steps that are going to be adopted, Noval underscored that this debate has not been on the electoral agenda in the Autonomous Community of the Basque Country. “To increase revenue and to face up to the rise in debt, a tax reform is needed to ensure that the highest incomes and companies pay more, otherwise we will see that cutbacks will appear over the next months.”

Read ELA’s proposal (in Spanish)