Tim King writes POLITICO‘s Brussels Sketch.

The genius of the European Commission’s potentially revolutionary recovery fund is that it is so conservative.

What makes the proposals put forward by Commission President Ursula von der Leyen potentially transformative is their scale and speed. But in their form and structure, most of its elements are — for those who know the European Union — reassuringly familiar, if also characteristically complicated.

As she set out her proposals to the European Parliament, von der Leyen spoke of a defining moment for the EU. She was right in the sense that how the bloc’s countries respond to her proposal will shape the Union for years to come. But she downplayed the extent to which the EU is already defined: Her proposals are shaped and constrained by what has gone before.

The driving mechanism of the €750 billion Recovery Instrument is that the legally agreed limit on the size of the EU budget is to be raised. The gap between the actual size of the EU’s budgeted spending and this legal limit sets the EU’s borrowing power, because the EU must always be in a position to honor its obligations in the unlikely event that all beneficiaries of its loans were to default at once. Increasing the margin between the actual budget and its theoretical limit gives the EU more room to borrow money, which the Commission now proposes should be distributed to member countries as a combination of grants and loans.

The Commission and Parliament are frustrated that the arguments over gross national income make expansion of the EU budget impossible.

This increase in EU borrowing is perceived by some as a mutualization of debt and has prompted a rash of comparisons with the creation of the First Bank of the United States — from some who would like it to be so, and from others who consider the idea anathema.

The Commission, on the other hand, is at pains to point out that each member country will be held individually liable for a delineated share of the total debt — and that this does not constitute debt mutualization.

Whatever the label might be, the mechanism is not new. The European Financial Stability Mechanism, which came into effect in 2010, saw the Commission using the EU budget as a guarantee to raise money on the financial markets — up to €60 billion. Under the European Financial Stability Facility, also set up in 2010 in response to the banking and sovereign debt crises, bonds can be issued using guarantees from the eurozone member countries with liability apportioned according to their paid-up share in the European Central Bank. At its launch, the total guarantee was €440 billion, which has since been raised to €780 billion.

Of much longer standing — dating back to 1969 — is the possibility for the EU to provide financial assistance to a member country facing difficulty with its balance of payments. The explanation given in the 2002 revision of that 1969 law was: “In order to finance assistance that has been granted, the Community needs to be able to use its creditworthiness to borrow resources that will be placed at the disposal of the member states concerned in the form of loans.”

More recently, when Jean-Claude Juncker was president of the Commission (2014-2019) a flagship policy was the Investment Plan for Europe, which used an EU guarantee to mobilize private investment in infrastructure and innovation.

Own resources

Likewise, the proposals made by the Commission to raise revenue to repay the loans are not in their structure radical. For many years, the Commission — backed up by the European Parliament — has been urging member countries to give it new sources of revenue that go directly to the EU, unmediated by further decisions from national governments.

The earliest form of these so-called own resources — customs duties, agricultural duties, sugar levies — long ago became inadequate to the task of funding the EU’s activities. In 1970, another source of revenue — based on each member country’s VAT receipts — was approved. When that too proved inadequate and its equity questioned, another source was added: a call upon a proportion of each country’s gross national income so as to make up the revenue required to balance the projected spending (the EU is not allowed to run a deficit).

The proportion of gross national income that is to be drawn down has historically been a little over 1 percent —and the precise rate has been the subject of interminable squabbling between member countries at each budgetary cycle and has been successively reduced.

The Commission and Parliament are frustrated that the arguments over gross national income make expansion of the EU budget impossible, but the Commission’s response is hardly revolutionary: It is simply seeking the modern equivalents of those sugar levies and agricultural duties.

This idea has been kicking around for more than a decade. Ahead of the negotiations for the EU’s 2014-2020 budget, the Commission proposed reducing the reliance on gross national income, by introducing a financial transaction tax and modernizing the way the VAT revenue was calculated.

The member countries quashed the proposal, and the 2014-2020 budget was agreed without any reform of the revenue streams. But the final deal did include an agreement that there should be a review, headed by Mario Monti, a former prime minister of Italy and former European commissioner, of possible reform of EU revenue.

What von der Leyen and the Commissioner for Budget Johannes Hahn have floated as possible sources of revenue — including more revenue from the Emissions Trading System, a digital tax, a duty to guard against carbon leakage — are consistent with the ideas in the Monti review.

Incentives for ambition

Wherever you look in the Commission’s proposals, you recognize features from elsewhere in the EU’s constellation. The conditionality that is to be attached to the grants and loans, while it could be highly controversial — because some countries fear it will be used to deny them money — is not new. Conditionality has long been a feature of regional aid and other reform programs, albeit sometimes badly policed.

Yet for all the familiarity of individual elements, when they are put together, the Recovery Instrument, Next Generation EU and the 2021-2027 budget of €1.1 trillion do amount to something new and potentially revolutionary. If the Commission were to win the unconditional consent of the member countries, then in just a few years the EU would be transformed.

How? Because the EU would be pushing out a large amount of money in a short space of time. The emphasis on particular policy objectives — notably digital infrastructure and combating climate change — would represent a swift shift of emphasis unthinkable a few months ago.

Although the recovery fund is supposed to be just temporary, if it were to achieve its aims, it would change people’s perceptions of what the EU could do. If new forms of revenue were introduced, and administered without controversy, and the trend to contract the EU budget were reversed, then some of the poison would drain from the EU’s budget negotiations.

Above all, the Commission would have strengthened its position and recovered much of the legitimacy that it lost during the banking and sovereign debt crises.

The continued commercial belligerence of U.S. President Donald Trump is an incentive for the EU to stand together — and a disincentive to look elsewhere for multilateral solutions.

All of these are reasons why some member countries will hesitate to fall in line with von der Leyen’s proposals and with the Franco-German initiative that preceded them. Whatever the short-term pain of the coronavirus crisis, they may not consider that Europe’s economic recovery necessitates giving the Commission a shot of growth-hormone.

They may prefer to maintain their jealous controls of the EU’s purse-strings rather than set a precedent for new own resources. The habit of the European Council is to scale back ambition — to dilute and delay.

That said, some circumstances are in the Commission’s favor. The fragility of the European economy is an incentive to be ambitious: Governments, industrial sectors and individuals are desperate for help.

The continued commercial belligerence of U.S. President Donald Trump is an incentive for the EU to stand together — and a disincentive to look elsewhere for multilateral solutions. The departure of the United Kingdom is a clear blessing: Much of this would not even have been attempted if a British veto were possible.

If von der Leyen can maintain the support of French President Emmanuel Macron and German Chancellor Angela Merkel, then she has a chance of achieving a revolution by conservative means.

The European Commission doesn’t need Donald Trump. It has Miley Cyrus.

The U.S. president hasn’t joined the EU’s global fundraising drive to fight the coronavirus pandemic, but Cyrus and other American celebrities and big-name philanthropists are now on board as the EU-led push to raise money for tests, therapies and vaccines shifts into its second phase.

So far, the Commission’s Coronavirus Global Response has raised €9.8 billion, and Commission President Ursula von der Leyen announced Thursday that the EU would partner with Global Citizen, the New York-headquartered worldwide anti-poverty movement, to initiate the campaign’s second phase, called “Global Goal: Unite For Our Future.”

The goal now is to raise donations from everyone — not just major countries and philanthropists — to help find diagnostics, therapeutics and vaccines to fight coronavirus. The second big pledging event will be hosted on June 27.

“This is the only way to overcome this pandemic and to avoid another,” von der Leyen said. “Everyone can contribute to life-saving medical innovation, to make coronavirus history and to make history in uniting the world.”

Despite criticism that the first pledging drive mostly re-counted old money, the campaign has been an indicator that the Commission — rather than the U.S. — is stepping up as the leader to rally countries to a global coronavirus response and prevent a brawl over access to badly needed medical innovation.

In her announcement, von der Leyen said the second phase has 15 countries partnering as co-sponsors: Austria; Belgium; Canada; France; Germany; Italy; Mexico; Morocco; New Zealand; Norway; Saudi Arabia; South Africa; Spain; the United Arab Emirates; and the U.K.

Although the list is still missing the U.S., it does have plenty of celebrities. Actor Hugh Jackman, comedian Chris Rock and pop stars Justin Bieber and Shakira are all on the roster with Cyrus, along with billionaires Bill Gates and Michael Bloomberg to “help rally citizens to the cause.”

The Commission also released a more detailed breakdown of the €9.8 billion the coronavirus pledge drive raised. But it’s still unclear how much represents new money as the pledges included money spent by governments dating back to January 30.

Still, much of today’s announcement emphasized the anticipated coronavirus vaccine — there are currently 100 projects in development.

Gates, the Microsoft founder and philanthropist, spoke in a video today — following statements by Jackman and Cyrus — to say that a working vaccine could be ready by January 2021.

“That would make it the fastest vaccine ever created in human history,” Gates said. “But we also have to ask: What good is this vaccine if we can’t get it to all the people in the world?”

Wellcome Trust Director Jeremy Farrar echoed the need for a vaccine, saying it is the “the only exit strategy from this crisis.”

Sarah Wheaton contributed reporting.

PARIS — Freedom is back in France, according to Prime Minister Edouard Philippe.

“Freedom will finally become the rule again, and bans the exception,” Philippe said during a press conference Thursday evening as he announced details of the second phase of deconfinement from the coronavirus lockdown that will start Tuesday.

Cafés, bars and restaurants across the country will be allowed to reopen indoor seating, with the exception of the Paris region where the virus continues to circulate at a slightly higher level. In the capital, premises will only be allowed to open outdoor terraces, as is also the case for the overseas territories Mayotte and French Guiana.

Parks and public gardens will reopen this weekend, and museums, historical monuments and beaches will reopen as of Tuesday, although gatherings of more than 10 people remain prohibited. All schools will also progressively reopen from Tuesday.

People will be able to travel further than 100 kilometers within France, and travel within Europe will be allowed as of June 15 — although a reciprocal quarantine requirement will still apply with certain countries.

A common European position on travel from outside the EU should be reached “by June 15,” according to Philippe.

The easing of most remaining restrictions is possible because the “results are good from a health perspective,” Philippe said, while reminding people of the need to continue social distancing and remain vigilant. Less than 2,000 people are in emergency departments, down from more than 7,000 at the peak of the epidemic.

“We are in slightly better shape than we were hoping to be,” Philippe said. “It’s mainly the fruits of your rigorous civic sense and respect for instructions.”

With the worst of the health crisis seemingly over for now, the first signs of the economic hit are starting to show. More than 800,000 people declared themselves unemployed between March and April, according to Philippe.

A third phase of deconfinement is expected to be announced June 22, when cinemas should reopen. Team sports are banned and nightclubs remain shut until then.