Photo: Ludovic Marin Agence France-Presse
A draft recovery fund of 750 billion euros was announced Wednesday by the european Commission, in support of the economy of the Old Continent undermined by the pandemic.
Of arduous negotiations await the 27 member States of the european Union on the proposed stimulus funds to 750 billion euros, which was unveiled Wednesday by the european Commission, in support of the economy of the Old Continent undermined by the pandemic.
This new fund comes to lean against the draft budget multi-year european of about 1100 billion euros for the period 2021-2027, refurbished by the Commission, which expects a recession “history” (7.4% in 2020, followed by a rebound of 6.1% in 2021).
If it is accepted, this proposal presented by the chair of the Commission, Ursula von der Leyen, will be the largest stimulus plan ever launched by the EU. The fund will be fed by loans to large-scale the Commission on behalf of the EU, in an operation unprecedented for the Union.
We need to make investments on an unprecedented scale. But we’re going to do it so that the next generation in Europe collects tomorrow’s profits.
— Ursula von der Leyen
On the 750 billion, 500 billion would be redistributed in the form of grants, which need not be repaid, a sum equivalent to the one advanced last week in the franco-German proposal. The rest will be made up of loans to member States, of the amounts made available under terms and conditions after submission of a national plan.
Part of the countries most affected by the health crisis, Italy and Spain are likely to receive , in fine, more of 172 and 140 billion euros (grants and loans), respectively, by means of this instrument. France is the fourth principal recipient (after Poland) with $ 38.7 billion in grants alone, according to figures from the Commission.
“We need to make investments on an unprecedented scale. But we’re going to do it so that the next generation in Europe collects tomorrow’s profits “, has promised Ursula von der Leyen in a speech before the european Parliament.
The repayment of joint debt by the Commission, which enjoys very low rates on the markets would be on the 30-year maximum. To assist in the refund, the Commission proposes to endow the EU with new sources of income : sale of quotas on the european union’s carbon market, “sales tax” on the products manufactured by companies polluting the foreigner ” tax ” on plastic, not recycled, and even a tax on digital companies.
“This would allow member States to contribute to the [multi-annual budget] at the same level as they currently do,” noted Ms. von der Leyen. One way to encourage countries who are reluctant to put hand to the portfolio. “This could unblock the negotiation with the four frugal, and we could get more money over a longer period” for recovery, said the mep (S & D) Pierre Larrouturou.
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No agreement by June
Last week, Germany had been surprised by announcing, alongside France, a radical change of doctrine. It accepted the idea of a mutualisation of european debt, an option to which Berlin had until now been hostile.
But to obtain the unanimity of the member States, required on the budget, it will be a difficult exercise. The economic storm has not closed ranks between countries of the North and those to the South, worst hit by the health crisis. The most rigorously — the netherlands, Austria, Denmark and Sweden — advocate support increased only by loans. The chancellor of austria, Sebastian Kurz, has immediately declared that “the proportion between grants and loans” will have to be discussed.
France called on all States to support the plan of the Commission in which Italy has seen ” a excellent signal of the part of Brussels “. But the German chancellor, whose country takes over the rotating presidency of the EU starting in July, has warned that the negotiations “will not be concluded” at the next european summit, on June 19.
Paris has expressed the hope of a deal by July. “It is difficult to imagine that this proposal is the ultimate outcome of these negotiations “, however, has warned a diplomat Dutch, under the guise of anonymity.
“The negotiations will take time “, he predicted. And the european Parliament must also give its green light. Its president, the Italian David Sassoli, praised the plan as ” a major effort “.
The instrument of the stimulus and the budget would be in addition to 540 billion euros in emergency aid already decided. The Commission has also validated 2130 billion of State aid since the beginning of the crisis, including about half released by the German government to support its businesses.
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