Austria’s Blumel is satisfied that EU Covid funds can be used regardless of German courts

LONDON – Austria’s CFO believes there is no need to worry about EU recovery funds and investors are increasingly concerned about a post-pandemic delay of much-needed money.

The EU agreed in July to tap the financial markets in search of 750 billion euros to distribute among the 27 nations and prop up their economies after the coronavirus shock. However, in order to receive these funds, countries had to specify exactly how they were going to use them – a process that has not yet been completed.

In addition, the German constitutional court threw a curveball at the trial. In the past month, doubts were expressed and the necessary legislative steps in Germany effectively stopped before the funds could be released.

“We have of course followed the developments of the court ruling in Germany fairly closely. To a certain extent, they define what many critics say, that there is a risk that temporary measures will be implemented on a permanent basis,” said the finance minister from Gernot Blume, Austria CNBC on Friday.

I am convinced that there will be no delay in issuing these European bonds.

Gernot Blume I.

Finance Minister of Austria

The German court acted after a group called Citizens’ Will Alliance complained that the EU treaties did not allow the bloc to collectively borrow. The German judges said that the federal government should ensure that borrowing at EU level “does not become a permanent solution” – an opinion that Austria shares.

“I can understand what the German court said and in some parts I agree,” he said, adding that compared to France and Germany, Austria “is a bit more skeptical when it comes to permanent debt reciprocity within the country European Union goes “.

“That is not what the Union was designed for. And we have now taken action 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 motive.” CNBC’s “Squawk Box Europe” on Friday.

Before the funds can be released, one more element is required: all EU member states must complete the ratification process in their national parliaments. Austria is one of the 10 EU countries that have not yet done so, and without this the EU cannot open up the debt markets.

“I am convinced that there will be no delay in being able to issue these European bonds, as this is an important measure to revive the European economy,” said the Austrian CFO when he was asked why his country has not yet taken this step have done.

“We have agreed on these measures. Austria is paying a large share of 12 billion euros into this pot. We are doing this because we believe that this is the right way to increase growth in the European market all citizens of Europe will benefit from it. ” ” he added.

There is nothing wrong with negotiating vaccines with Russia

Like other EU countries, Austria has problems quickly making Covid 19 vaccines available to its citizens.

However, Chancellor Sebastian Kurz confirmed last weekend that negotiations to buy the Russian Sputnik V vaccine had been completed, although this shot had not yet been approved by the European Medicines Agency.

I said Austria followed the rules and “tried to get more vaccine doses to revive the economy faster and give people back their freedom”.

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

Some eastern EU states like Hungary have decided to go beyond the agreements negotiated by the European Commission to buy more vaccines themselves, even if they haven’t received medical approval across the bloc.

Speaking to CNBC, BlumeI said he was optimistic that Austria would have vaccinated the entire adult population who would like to receive a vaccine in the next two to three months.

A man sits on a park bench in the Volksgarten in front of the Hofburg in Vienna, Austria on April 8, 2021 as Austria continues with Covid-19 restrictions.

JOE KLAMAR | AFP | Getty Images