The European commission puts the cards on the table and after weeks of waiting and controversy launches a 750 billion euro recovery fund, made up of 500 billion in non-repayable grants and 250 billion in loans. In Italy, the country most affected by the coronavirus pandemic that has swept Europe and the world, 82 billion in grants and 91 billion in loans are expected to end, the highest figure ever.
The plan that von der Leyen presented to the European Parliament, called "Next Generation Eu", exceeds the figures contained in theFranco-German agreement and seems to ignore the recriminations of the rigorist States of the North who a few days ago reaffirmed their opposition to any type of non-repayable loan. However, according to many observers, the survival of the European Union itself is at stake and the president of the Commission, Ursula von der Leyen, sends a clear message to everyone: the coronavirus will not cause the decline of the EU, but on the contrary, it must become an opportunity to strengthen European integration and fight nationalism and populism. “The crisis has contagious effects in all countries and no one can recover by itself. – said von der Leyen – A troubled economy on the one hand weakens a strong one on the other. Divergences and disparities are increasing and we have only two choices: either we go alone, leaving countries and regions behind, or we take the road together. For me the choice is simple, I want us to take a strong path together”:
RECOVERY FUND: ALL FIGURES
As mentioned, the recovery fund put on the plate by the European Commission to help Member States grappling with the economic crisis triggered by the Coronavirus amounts to 750 billion euros. The figure had already been anticipated by the Commissioner for Economic Affairs, Paolo Gentiloni, who spoke on Twitter of a "European breakthrough to face an unprecedented crisis".
The new instrument, which will be associated with the 2021-2027 EU budget, will distribute 500 billion in funds that will not need any repayment, while a further 250 million euros will reach the various states in the form of loans to be repaid over the long term, probably starting from 2027, and at low rates.
Overall European aid for recovery will reach "2.400 billion" explained von der Leyen, underlining that "the most courageous proposals are the safest ones". According to what was indicated by the president of the EU executive, the 750 billion EU multi-year budget, the MFF, "revised to 1.100 billion, for a total of 1.100 billion" euros, will be added to the 1.850 billion of the recovery fund. Finally, the 540 billion from the measures already approved will be added to these figures: Mes light, Sure for unemployment and Bei funds.
RECOVERY FUND: HOW IT WILL WORK
A fundamental element of the EU Executive's proposal concerns the financing mechanism of the recovery fund. The money will come from bond issues managed by the Commission itself. The bonds will have different maturities, and will be repaid by 2058 and not before 2028.
The holders of the securities will be reimbursed through new resources that the EU will raise through the plastic tax, new taxes on digital and on the environment.
RECOVERY FUND: AROUND 173 BILLION TO ITALY
According to initial forecasts, Italy could receive around 20% of the total allocation, as the "most affected country" by the coronavirus pandemic and the resulting recession.
In figures we are talking about 81,807 billion euros of non-repayable grants and 90,938 billion of long-term loans. In total, therefore, we arrive at 172,7 billion euros. Among the nations that will receive substantial aid is then Spain, which according to calculations could reach 77 billion in grants and 63 in loans. In any case, the final amounts will depend on the demand.
RECOVERY FUND: HOW THE MONEY CAN BE USED
The money that will arrive from Brussels can be used to strengthen the health system, relaunch and modernize the economy of individual states, looking above all at the environment and digital in line with the EU Green New Deal. Each country, as anticipated by the vice president of the EU executive, Valdis Dombrovskis, will have to present a national plan which will be evaluated by the Commission.
THE BATTLE BEGINS
That of the EU commission is a proposal. From tomorrow, the plan will have to be negotiated by the Member States and then passed to the scrutiny of the EU Parliament. The crucial appointment will be the European Council scheduled for 18-19 June, even if many observers are already predicting a second summit in July. The negotiation will not be easy. In fact, a ferocious battle is envisaged to overcome the reluctance of the rigorous Northern states on non-repayable loans, debt mutualisation and the mechanism for allocating funds.
Not surprisingly, it has already arrived a first negative reaction from the Netherlands: “The positions are distant and this is a dossier that requires unanimity, so negotiations will take time. It is difficult to think that this proposal will be the final result of those negotiations,” Dutch diplomatic sources said.
