GENEVA (Reuters) – Europe should match the ambition shown by the United States with its huge new economic stimulus, French Finance Minister Bruno Le Maire said on Thursday.
The new administration of U.S. President Joe Biden is already making payments to households under a new $1.9 trillion COVID-19 relief package and plans to plough $2.3 trillion into infrastructure investments to fire up the world’s biggest economy.
“Whatever we may think about it, the American stimulus plan shows ambition, and the return of U.S. ambition is a good thing,” Le Maire said in a speech at the Geneva Graduate Institute.
“The best response to U.S. ambition isn’t to fight it. It is to match it. Europe needs to challenge itself like America does,” he added.
While European countries’ support for their economies last year was on par with that seen in the United States, the new U.S. stimulus dwarves the European Union’s 750 billion euro ($881 billion) economic recovery plan.
Though the 27-nation bloc agreed the landmark stimulus fund last summer, EU governments are still submitting detailed plans on how they aim to spend money from the fund, which many still need to ratify.
Meanwhile, the European Commission and the governments also have yet to agree on structural reforms that are supposed to accompany the stimulus, while domestic politics in some countries and a legal challenge before the German constitutional court has fuelled concerns about possible delays.
As some European countries tighten their coronavirus restrictions in the face of a sluggish vaccine roll-out, calls are emerging not only for Europe to speed up its recovery plans but to increase its size.
Le Maire said that Europe needed to focus on returning as quickly as possible to pre-crisis levels of economic activity and not restoring public finances.
“We shouldn’t get bogged down in complicated calculations about whether we should revert to fiscal discipline in January or September 2022,” he said.
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(Reporting by Leigh Thomas; Editing by Catherine Evans, William Maclean)