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Will a Green Economy Emerge in Europe Post-Coronavirus?

By Lisa Bryant May 15, 2020

France emerged from lockdown this week pretty much the way it entered – with blue skies and chilly winds in the capital, where Parisians savored newly found freedoms.

That is where the similarities end. While its curve is flattening, France's coronavirus caseload has climbed to nearly 180,000, and masks are now part of everyday life. The Metro and roads remain half empty. And the government faces a monumental task of rebooting an economy crippled by two months of confinement.

What recovery path French and other European Union governments take will be key to meeting their climate and other environmental pledges, analysts say.

"This really could be an unprecedented opportunity toward accelerating to a sustainable and competitive economy," said sustainable development expert Annika Ahtonen of the Brussels-based European Policy Center, noting the massive rescue packages countries are readying.

But she added, "we also know that member states are under enormous pressure to rescue businesses with no conditions attached."

The pressure is on in France, where the economy shrank 5.8% in the first quarter of this year, its biggest contraction since World War II. The EU's overall projection is even grimmer, with estimates its economy will shrink a record 7.4% this year.

Still, officials vow a green reboot.

"Abandoning policies that fight against climate change will be among the top temptations in the coming months," Economy Minister Bruno Le Maire wrote in a book published this month, adding, "we must do the exact opposite."

More bikes, fewer flights

Already, local and national authorities have taken a few immediate steps. In Paris, bikers now rule the iconic Rue de Rivoli, a main artery closed for now to most vehicle traffic. The city has announced kilometers of additional bike routes and pedestrian-only streets. The state is also subsidizing bike repairs to encourage green commuting and reduce risks of contracting the coronavirus in crowded public transport.

Also headline-grabbing has been the government's conditioning of bailout funds to companies adopting more environmentally friendly policies. They include ailing flagship carrier Air France, which must cut some domestic flights to receive nearly $7.6 billion in loans and become "the most environmentally respectful airline company on the planet," Le Maire said.

Public pressure for green action is also high. French climate scientists, movie stars and business leaders have signed onto various petitions for a change in business-as-usual.

But environmentalists are wary that France's business-friendly government will match rhetoric with tangible change, pointing to its failure to meet its own emissions-cutting targets, among other promises.

"We need to address climate change in a much more ambitious manner," said Greenpeace France spokesman Clement Senechal. "The government is reluctant to do so, because it prefers to protect the vested interests of the industries and financial markets."

An opportunity?

Such concerns are mirrored elsewhere in Europe, as states plan post-COVID-19 recovery strategies.

In Brussels, the EU's executive branch wants its Green Deal to achieve zero net emissions to be the framework for regional recovery.

"We can turn the crisis of this pandemic into an opportunity to rebuild our economies differently and make them more resilient," said European Commissioner Ursula Von der Leyen.

"The commitment is there," said analyst Ahtonen, singling out what she called "strong messages" from the EU's most powerful members – France and Germany. "My worries come down to what happens when it comes to action."

A first and immediate test, she and others say, will be the EU's next long-term budget, which is to start next year, and which is to include a response to the pandemic.

"My worry is that, as always, it will become an enormous tug of war" among member states eyeing national interests instead of the collective good, Ahtonen said. "The budget, alone, won't solve the EU's problems, it's minor. But it sends out a signal about what matters to the EU."

Energy and climate analyst Milan Elkerbout of the Brussels-based Center for European Policy Studies worries that some countries might opt for the easiest and cheapest recovery roads.

"There are a lot of member states willing to spend big at the moment, just to break the deflationary spiral," he said. "So, there is a real attraction for any type of investment project that is ready to go, but which may not necessarily be climate-compatible."

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