After a negotiating marathon that lasted four days and four nights, at 5.30 in the morning the EU heads of state and government signed the agreement on the Recovery Fund. The latest draft proposed by the President of the European Council, Charles Michel, was the decisive one, capable of overcoming the resistance of the Frugals (Holland, Austria, Denmark, Sweden and Finland).
Here's what it contains.
RECOVERY FUND: FINANCIAL ENDOWMENT
The Mediterranean countries have obtained that the financial endowment of the Recovery Fund remains unchanged compared to the Commission's first proposal: 750 billion euros. What changes is the composition:
- non-refundable transfers go down from 500 to 390 billion (under pressure from the Frugals);
- loans rise from 250 to 360 billion.
Funding will begin flowing in from the second quarter of 2021, but countries will also be able to retroactively fund expenses incurred as of February.
HOW MUCH MONEY WILL ITALY RECEIVE?
The share of aid destined for Italy has even increased compared to the original plan, going from 172,7 to 208,8 billion. Also in this case, the changes concern the distribution:
- 81,4 billion in non-repayable loans (down slightly from 81,807 of the original plan);
- 127,4 billion loans (many more than the 90,938 initially foreseen by the Commission).
WHAT DO FRUGALS EARN?
In addition to having reduced the share of non-repayable loans by 110 billion, the Frugals obtained an increase in rebates, i.e. the discounts granted to the Netherlands, Austria, Denmark and Sweden – plus Germany – on the contribution to the 2021-2027 EU budget, which will be 1.074 billion euros.
In particular, 322 million annual repayments go to Denmark (compared to 222 million in Saturday's proposal), 1,921 billion to the Netherlands (from 1,576 billion), 565 million to Austria (from 287) and Sweden 1,069 billion (from 823 millions). On the other hand, the 3,67 billion for Germany remained unchanged.
RECOVERY FUNDS: GOVERNANCE
The latest clash between Italy and the Netherlands took place overnight and concerned the governance of the Recovery Fund, i.e. the rules according to which Europe will give the green light first to national reform plans, then to the disbursement of individual tranche of aid.
As requested by Italy, the PNRs will be approved by the Commission, but under pressure from the Netherlands it was decided that the green light from Ecofin, with a qualified majority, will also be needed.
Then there is the "emergency brake”, another victory for Rutte: the disbursement of the individual tranches can be blocked if one or more states deem that a country is deviating from the objectives that have been indicated to it (ie it is not complying with the national reform plan). The situation will then be discussed in the Council, but the veto power much invoked by the Dutch premier will not exist: the last word on the funds will in any case rest with the Commission. And the whole process can't last more than three months.
COUNT'S COMMENT
"It is a historic moment for Europe and for Italy - commented the Prime Minister, Giuseppe Conte - Our request, the conviction we have nurtured in recent months, the vision, the determination with which we have pursued this objective are be rewarded".
And again: “We have rejected insidious attempts to alter the genuine vocation of this European project. I would never have granted any country the right to veto or interfere in the implementation of the national recovery plan. The Italian government is strong: the truth is that the approval of this plan strengthens the action of the Italian government. Now we will have a great responsibility: with 209 billion we have the possibility to restart Italy with strength and change the face of the country. Now we have to run."
VON DER LEYEN'S SPECIFICATION
The agreement approved by the Council is "an unprecedented package - underlines the President of the European Commission, Ursula von der Leyen - The Recovery and Resilience Facility is structured in a very clear way: it is voluntary, but those who access it must align themselves with the Semester European Union and recommendations to countries. Until now it depended only on the countries to respect them or not, but now the recommendations are linked to subsidies and potential loans".
