EU proposes coronavirus recovery fund0.89
THE EUROPEAN Union proposed on Wednesday a €750 billion (US$825 billion) recovery fund to help countries weather a painful recession triggered by the coronavirus and bridge divisions over the conditions that should be attached for access to the money.
The fund, to be mostly made up of grants and tied to the 27 member nations’ common budget, comes as the world’s biggest trading bloc enters its deepestever recession, weighed down by the impact of the coronavirus. Virtually every country has broken the EU’s deficit limit as they’ve spent to keep healthcare systems, businesses and jobs alive.
“Our unique model built over 70 years is being challenged like never before in our history,” European Commission President Ursula von der Leyen told EU lawmakers as she unveiled the plan. “This is Europe’s moment. Our willingness to act must live up to the challenges we are all facing.”
Von der Leyen said that the fund – which is dubbed Next Generation EU and must be endorsed by every country – is “providing an ambitious answer”, and she urged European nations to set aside their divisions about the budget and the way ahead.
“We either all go alone, leaving countries, regions and people behind, and accepting a Union of haves and have-nots. Or we take that road together, we take that leap forward. For me, the choice is simple, I want us to take a new bold step together,” von der Leyen said.
To fund the move, the commission is proposing to borrow money from financial markets. The EU’s executive arm has a triple A credit rating, which it says will give it access to very favourable loan terms and moderate interest rates. Repayments would not begin before 2028, with the full amount due after 30 years.
The money raised will go into the EU’s next long-term budget, which starts on January 1 and runs until December 31, 2027. It will then be channelled into a series of programs beneficial to the member states’ economies.
Two thirds of the fund – €500 billion (US$543 billion) – would take the form of grants, while tGhweestrCeosrptorawtioon uld be m0a.0d0 e up of mHooneryeBunconditions-ba0s.e00d lo32a1,n05s8 that countries could apply for. IItnadileys Spain woul0d.00each101b,55e2 eIrloingroicbklIensufroanrceaCround €800.00billio6n4,5i7n2 gISrPaFnintasn.ceFSrearvniccees and Pol0a.0n0d would eJaamc.hPubhliac vSeerviacecsc5e%sDs to a0r.o03und €38 bJaimll.ioPunbl,icwSehrviilcesG5%eCrmany0.0c3ould get
no0.t04 just be hJaamn. would have to apply, setting out their aims for the money and what reforms they plan to undertake to ensure their economies are more resilient in the future. The applications would have to be endorsed by the EU partners.
Italy, Spain and Poland would a0l.s87o be for0.80tens0.8o7 f b5i.l0l8ions of5.0e8uros -i0n.03loan5.s0,7 but5t.0h8e c0o.5n5 dition0s.5a5 re mo0.r0e2 on0e.5r2ous.0.55
pro2p.29osal ap0.0p7ears2.2la5 rgel2y.29in line with a plan unveiled earlier this m14o.00nth, b1y5.h24e lead0.e00rs of Germ15a.9n8y a0n.3d8 Franc0e.38– hist0o.0r0icall0y.4,5the two main drivers of EU integration. T0h.4e4 y agre0e.4d4 on a0.0o0ne-0t.i5m1 e €500 b0i.l4l8ion fun0d.4,8 a prop0.0o0sal t0h.5a5 t would
furt1h30e2.0r0 cash0.00to o26f.5f0inanc2i6a.1l4 mea-0s.3u3 res26.t1h0 e b26l.o50c is deploying to cope with the economic fallout.