European Union Plans $825 Billion Coronavirus Recovery Fund

Marco Green
May 29, 2020

France and Poland would each have access to around 38 billion euros, while Germany could get 28 billion.

European Commission President Ursula von der Leyen (pictured) said: "The recovery plan turns the enormous challenge we face into an opportunity, not only by supporting the recovery but also by investing in our future: the European Green Deal and digitalisation will boost jobs and growth, the resilience of our societies and the health of our environment".

European Parliament President David Sassoli is seen before a plenary session to listen a new proposal for the EU's joint 2021-27 budget and an accompanying Recovery Instrument to kickstart economic activity in the bloc ravaged by the CCP virus outbreak, in Brussels on May 27, 2020.

Furthermore, according to estimates, with the leverage effect of the proposed 1.1 trillion multi-annual EU budget and the 750 billion of the Next Generation EU, the total investment that could be generated is over three billion, the EC sources said.

Von der Leyen said: "the crisis has had a contagion effect in all countries and no one can shelter on their own. A struggling economy in one part of Europe weakens another part of Europe", she said. For me, the choice is simple, I want to take a new bold step together.

She added that the overall European Union effort for recovery would amount to 2.4 billion euros. Premier Conte said "an excellent signal from Brussels, it goes right in the direction indicated by Italy".

The €750 billion includes €500 billion in grants and €250 billion in loans to member states. "Now let's speed up the negotiation and free up resources soon", he wrote.

EU-BUDGET-RECOVERY
EU proposes €750B coronavirus recovery fund, but more heated debate is expected

The Commission said it wanted to offer incentives to pharmaceutical companies to develop and produce vaccines in Europe, and relocate manufacturing capacity of medicines and their chemical ingredients which are now mostly imported from India and China. "It's hard to imagine this proposal will be the end-state of those negotiations". "This investment is particularly crucial to the success of Europe's green and digital transitions", it writes in a factsheet on its budget proposal set out today - which is being slated as a wider "recovery plan" for Europe.

On Tuesday, Swedish Finance Minister Magdalena Andersson said: "If it will be grants, who is going to pay the grants?"

"Let's use the money to cut taxes".

Under the proposal, which could still be blocked by more frugal northern nations, the European Commission would borrow the funds from the market and then disburse two-thirds in grants and the rest in loans to cushion the unprecedented slump expected this year due to lockdowns.

European Union leaders agree that, if they fail to rescue economies now in freefall, they risk something worse than their debt crisis of a decade ago, which threatened to pull the eurozone apart. Reports suggest some EU-wide taxes may be imposed on the turnover of multinationals, as well as on plastics and Carbon dioxide emissions.

"To protect lives and livelihoods, fix the single market, as well as to build a lasting and prosperous recovery, the European Commission is proposing to harness the full potential of the EU budget", the commission said.

The Commission says it aims to use the publicly-funded policy levers to drive private investment in the decarbonisation of the EU's building stock, which it hopes will take the annual spend on this sector alone to a potential €350 billion annually.

Other reports by Click Lancashire

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