THE STATE OF THE EUROPEAN UNION REPORT. Europe in a period of transition

49 The EU Next Generation recovery fund, the year of its implementation José Luis Escario Introduction Covid-19 caused an unprecedented global crisis. In the European Union (EU), the pandemic has already clai- med 750,000 lives and has caused the greatest drop in GDP since World War Two. The consequences of this crisis remain to be revealed, although it seems clear that it heralds a different world, that does not promise to be any improvement on the current world (Borrell, 2021). On the other hand, the economic recovery rate is proving uneven between countries, depending on the speed that each country can access vaccines and the magnitude of the stimulus policies provided by public authorities. In the report it submitted to the G20 in Venice in July 2021, the International Monetary Fund (IMF) was already talking about “two-track recovery”. In the EU, recovery seems to be much faster than during the Great Recession, 1 although it is not certain that all Member States (MS) were experiencing the same conditions as we went into the crisis and they are highly likely to come out of it differently, as we will see later. Even so, it is expected that all MS will have recovered 1  The EU’s economic predictions from this summer expect 4.8% eco- nomic growth for 2021 and 4.5% for 2022. their pre-crisis levels by the end of 2022, long before other areas of the world. This has doubtlessly been helped by how the EU re- sponded to this crisis, in a marked contrast to its response to the financial crisis in 2008. After an initial moment of confusion, when the MS found it extremely difficult to coordinate their healthcare responses and unilateral national measures abounded (hoarding respirators, un- coordinated border closures, etc.), EU institutions soon took a proactive role in managing the covid-19 crisis. The European Central Bank (ECB) did not waste a mo- ment this time around. It used its considerable strength to act on monetary policy matters, quickly presenting a temporary sovereign debt purchasing programme in March 2020. In turn, the Commission set up the SURE 2 fund as a reinsurance system to support national systems for temporary job protection. Furthermore, the European Investment Bank (EIB) mobilised 200,000 million euros to facilitate business funding. All these measures, which were necessary and are proving to be a considerable contribution to softening the effects of the pandemic, were thought to be insufficient 2  Instrument for Temporary Support to Mitigate Unemployment Risks in an Emergency.