30 Europe TheEconomistMay28th 2022
whitecollar jobs back home are often
pushedintolowpaidwork,saysMyrosla
vaKerykofUkrainianHouse,a grouphelp
ing Ukrainians in Poland. The war has
causeda shortageofworkersinsectorslike
industryandconstruction.Ofthe110,000
UkrainianlorrydriverswhoworkedinPo
land beforethe war,some 40,000 have
gonehometofight.AtleastsomeUkrai
nianwomenmayenduptakingupjobs
previouslyheldbyUkrainianmen.
ManyUkrainiansdonotwanttogettied
down,however,becausetheyhopetogo
backsoon,saysMrsKeryk.Only17%ofthe
refugeessaytheywanttosettleinPoland
for good,according to one survey.Less
thanhalfhaveenrolledtheirchildrenin
Polishschools.Theremaindercontinueto
study,remotely,atUkrainianones.Atleast
500,000Ukrainianshavenotappliedfora
Polishidentificationnumber.Thiswould
entitlethemtosocialassistance,including
amonthlyallowanceof 500 zlotys($114)
perchild,therighttoopena business,and
healthcare.
ButeventhoseheadingbacktoUkraine
acknowledgetheymayneedtoescapeRus
sianbombsonceagain.“IknowI might
havetocomebackhereintwodays,”says
Natalia,a cosmetician,preparingtoboard
thetraintoUkraine.“Butwhoknows?”For
now,hopeseemstobeprevailingoverde
spair.Ticketsfortheonlydirecttrainto
Kyivaresoldoutforthenextmonth.n
Going home
Ukrainian citizens crossing the border with Poland
’000
Source:PolishBorderGuard
30
25
20
15
10
5
0
May 2022
01 03 05 07 0 11 13 15 1718
From Poland to Ukraine
From Ukraine
to Poland
TheEU’scovid-19recoveryfund
So far, so good
T
he adagethat Europe is forged in crisis
may be about to acquire a refinement.
By the time a response to any given crisis is
operational, which takes a while in a 27
country bloc, there is a good chance that
the crisis will be more or less over. But the
response might well turn out to be just in
time for the next one.
Take the eu’s covid19 fund, the Next
Generation eu or ngeu for short. It was set
up in the second half of 2020 to help weak
er countries in eastern and southern Eu
rope make a full recovery from the pan
demic. There are several novel elements.
For starters, it is big, at €807bn ($958bn) in
2021 prices, almost half of which is paid out
as grants (the rest as cheap loans).It is
debtfunded rather than coming out of
member states’ existing budgets, adding a
considerable stimulus (see chart on next
page). And most of its money is to be paid
out only once countries have taken agreed
reform steps and met investment targets,
rather than as a simple transfer from richer
to poorer regions.
This makes it a test of how the eu could
operate in the future. So far, even generally
hawkish members, such as the Dutch or
the Germans, are uncharacteristically up
beat. The reform and investment plans are
substantive, according to European Com
mission officials. Even in Poland the power
of money seems to work: difficult reforms
to the judicial system are expected to be
built into the Polish programme, due to be
finalised shortly. Some reforms, such as
the labour market ones enacted by Spain at
the end of last year, are already showing
signs of success in generating more per
manent jobs and fewer precarious ones.
But many of the early milestones in the
plans are comparatively easy to pass; they
typically include such things as opening
tenders or starting legislative processes.
Some of them are even retrospective: rele
vant projects that were started as far back
as February 2020 can be included, even if
already completed. It is only when the im
plementation gets harder, costs overrun or
governments with different priorities
come into office that the recovery fund’s
governance will really be challenged.
Italy may well become a test. Voters will
have to go to the polls some time in the
spring of 2023, bringing to an end the gov
ernment of national unity currently led by
Mario Draghi, whose core policy is the im
plementation of the programme. The next
government may be less enthusiastic
about the plans. The disbursement sched
ule for Italy seems to expect trouble: the
three biggest chunks, of €11.5bn each, are
scheduled to be paid out before the elec
tion. The current impasse over a competi
tion reform, held up on—of all things—the
liberalisation of bathing establishments,
foreshadows how easily reforms can get
stuck, in Italy and elsewhere. The commis
sion has the task of judging compliance.
Like the southern European countries that
are getting most of the cash (see chart), the
commission has an interest in making the
recovery fund work, so as to act as a model
for future plans like it. Bend the rules too
much, though, and the support of the flin
ty northerners will vanish.
Implementing the current plan is only
part of it. Another issue is whether the
fund can be adjusted to tackle today’s most
pressing issues: the war in Ukraine; the re
sulting dash for alternative sources of en
ergy to Russia; and inflation.
Start with the last of those. The num
bercrunchers in Brussels had assumed 2%
inflation when drawing up the fund. With
annual price increases for many raw mate
B RUSSELS
The fund has changed the way Europe spends money
Ursula von der Leyen’s huge plan