Blumel, Austrian, convinced that EU coveted funds will go ahead despite German court

LONDON – Austria’s chief financial officer believes there is no need to worry about EU recovery funds as investors become increasingly wary of the delay in the much-needed post-pandemic cash.

The EU agreed in July to take advantage of financial markets in search of € 750 billion ($ 898 billion) to distribute them among the 27 nations and strengthen their economies after the coronavirus shock. However, to receive these funds, countries have had to detail how they will use them, a process that has not yet been completed.

In addition, the German constitutional court threw a curve ball at the trial. Last month he raised doubts about it and effectively stopped the necessary legislative steps in Germany before he could release the funds.

“Of course, we have been closely following the progress of Germany’s court ruling. To some extent, they are stipulating what many critics say is a danger of applying temporary measures on a permanent basis,” said Gernot BlümeI, Minister of Finance. Austria told CNBC on Friday.

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

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

“The Union was not designed for that. 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 funds can be released: all EU member states must complete the ratification process in their national parliaments. Austria is one of the ten EU nations that has not yet done so, and without it, the EU cannot take advantage of debt markets.

“I am convinced that there will be no delay in being able to issue these European bonds as well because it is an important measure to boost the European economy again,” the Austrian chief financial officer was asked when his country still he has not taken that step.

“We have agreed on these measures, Austria is paying a large part of 12 billion euros in this jar and we do it because we believe it is the right way to increase growth within the European market so that all European citizens will benefit.” ” ” added.

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

But Chancellor Sebastian Kurz confirmed last weekend that negotiations to buy the Russian Sputnik V vaccine had been concluded, although that feature has not yet been approved by the European Medicines Agency.

BlümeI said Austria had followed the rules and “was trying to get more doses to get vaccinated, just to be faster in recovering the economy and giving freedom back to the people.”

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

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

Speaking to CNBC, BlümeI said he is optimistic that in the next two or three months Austria will have vaccinated the entire adult population who want to receive a vaccine.