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RRF – summary and general considerations

Rui Viana Pereira, 16/02/2022
(This is an automatic translation. It may contain errors or misunderstandings. The accurate version is the Portuguese version.)

Nothing can replace reading the official document creating the Recovery and Resilience Facility (RRF) in its entirety. However, since this reading implies an effort that few mentally healthy people would be willing to undergo, and in order to make things easier for the reader, we provide a synopsis, accompanied by some considerations.

The relationship between the Recovery and Resilience Facility, the new European financial fund and national plans

On 12/02/2021, the European Parliament and the Council of Europe created the Recovery and Resilience Facility (RRF),1 which sets the benchmarks for the «recovery and resilience» of the European economy.

To support the costs of this operation of reconditioning the Union, the Next Generation EU was created, a financial fund where usurers can invest to lend astronomical amounts of capital to the European Union. The latter, in turn, passes the loans on to the member states, either in the form of loans or disguising them as «non-refundable grants».

Once the RRF and the Next Generation EU have been created, each member state is called upon to propose a national recovery and resilience plan (RRP) which it presents to the European central power. The latter, assisted by a series of non-democratically elected bodies, analyses the plan, corrects it, and finally decides whether or not the member state can access grants and loans from. This process is formally different from the operation of the Troika (IMF + European Council + European Central Bank) applied 11 years ago in the peripheral countries of Europe to dominate and indebt them, but in substance it is the same: the financial power and governments of the Center countries decide how and under what conditions member states can access the loans and the «grants» (in reality deferred loans).

We will leave for another occasion the discussion on alternatives to this debt mechanism.2 It will also be necessary to ask whether the debt thus created mainly benefits the majority of European populations or an already privileged elite – that is, whether this debt is legitimate or not.

Several isolated statements by European authorities and leaders suggest that the covid-19 pandemic is entirely to blame for the crisis we find ourselves in. However, the considerations of the RRF adopt a more cautious tone:

«The COVID-19 outbreak in early 2020 changed the economic, social and budgetary outlook [meaning: point of view or interpretation] in the Union and in the world, […] The COVID-19 crisis as well as the previous economic and financial crisis have shown that developing sound, sustainable and resilient economies as well as financial and welfare systems built on strong economic and social structures helps
Member States respond more effectively and in a fair and inclusive way to shock […] Reductions in spending on sectors, such as the education sector, cultural sector and creative sector, and on healthcare can prove counterproductive to achieving a swift recovery. […]»3 (emphasis added by me)

No doubt the «economic recovery» and the «more efficient, fairer and inclusive response» referred to in the text are purely capitalist in nature, and therefore potentially adverse to the majority of the population, but the recognition that past budget cuts are the cause of the present problems is not without significance.

The RRF's considerations are the new missal of the European powers

The fundamental justifications for the new debt mechanism invented by the EU are set out in 75 considerations.4 All in all, several conclusions stand out.

1st finding:

Traditionally, the considerations of a resolution precede the conclusions and decision-making. They serve to set out the context of the problem in question; they list the variables at play, the pre-existing constraints (legal or otherwise) and the principles (political, ideological, scientific or others) guiding the decisions and conclusions which will follow.

This EU document, however, mixes in its preambles a reading of the context, the final decisions, the conclusions, the methods for implementing the decisions... In short, it is a sample of the typical cognitive confusion that seems to prevail in the high-level European bodies.

In fact, everything suggests that the preamble section of the document essentially serves as a pocket missal for politicians, leaders and opinion makers, providing them with the new narrative created around the economic crisis and the collective debt methodology adopted. Hence the mixing of considerations, conclusions and decisions, even when some have nothing to do with the others. It is also an unbearably verbose and repetitive text that promotes a kind of vertigo in the reader/voter.

2nd finding:

Although the preambles of the document admit the existence of development inequalities between member states, the EU has no qualms about applying the same development formula to all of them, without distinction. This overbearing tone is softened by the fact that it talks all over the place about territorial cohesion, convergence and reducing inequalities.

3rd finding:

The new political discourse of financial capital and its allied European leaders is based entirely on a confusion between the problems caused by covid-19 and the economic, social and health problems caused by the policies implemented in most member states under the guise of fighting the pandemic. The virus has become, so to speak, the scapegoat not only for various restrictive attitudes, but also for neoliberal policies.5 On the other hand, the damaging nature of neoliberal policies is admitted indirectly in the very preamble to the document – for example, when it posits the need, in order to deal with future, unforeseen disasters, to strengthen again the public health services weakened by budget cuts.

It should be kept very clearly in mind that it was not the virus that created the current economic situation, but the liberal, austerity and restrictive policy measures implemented before and during the pandemic.6 We must reject the cognitive confusion they want to foist on us. A correct understanding of the cause and effect relationships (or the lack of them) is decisive in order to understand the scope, nature and possible consequences of the measures implemented in the RRF.

However, this is a rather delicate debate, clouded by many factors (not the least of which is the fact that the Big Pharma transnationals are subsidising numerous institutes, professional associations and experts to a princely degree). I am convinced that this controversy will only be cleared up in many years' time. In the meantime it tends to generate dissension and sectarianism, which we would like to avoid in the pages of this notebook.

4th finding:

It is clear that with the RRF we are entering a new political and financial cycle and that the start of this cycle is marked by a pronounced semantic change. Surprisingly, we see numerous slogans of the progressive forces being adapted, I would even say appropriated, by the RRF's verbiage, where they speak with apparent conviction of:

Thanks to the «expropriation» of progressive language, this change of cycle in the European power mechanisms resembles a tacit mea culpa, an atonement for the austerity policies implemented in the previous cycle. However, the simple fact that this whole mechanism is based on the creation of a global debt contracted on the capital market is proof enough that essentially nothing has changed, except semantics, because where there is sovereign debt, there is always the risk of loss of sovereignty, increased inequality and the benefit of a privileged minority at the expense of an exploited majority. What has changed is the scale of the debt system, which is now astronomical - or at least, for that matter, continental.

 


Notas:

[1] «Regulation (UE) 2021/241 of the European Parliament and of the Council establishing the Recovery and Resilience Facility», 12/02/2021.

[2] To get an overview of this new debt mechanism and its size: «Recovery and Resilience Facility: the next generation pays».

[3] «Regulation (UE) 2021/241 …», consideration 6.

[4] In reality, there are only 17 preambles, because the rest are directives and standards dressed up as preambles.

[5] Many authors have already written about the origins of the current financial and economic crisis. See for example Éric Toussaint, «No, the coronavirus is not responsible for the fall of stock prices», 4/03/2020.

[6] Example 1: the high cost of certain intermediate or finished products is not due to a general halt in production, nor to the mass death of producers - after all, covid-19 is not a black plague, nor does it even kill as many as cancer or cardiovascular diseases - but to the decreed (i.e. artificial) paralysis of certain commercial circuits, to the benefit of large multinational distribution chains, and to financial speculation.
Example 2: the soaring energy prices are not due to any harmful effects of the virus (which is not yet attacking oil, as far as we know), but to the trade war between the USA, Russia and China in the exploitation and marketing of fossil fuels.

 
 

Index of this dossier

The Recovery and Resilience Facility
themes: European Union, RRF
visits (all languages): 9
 

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