EU proposes EUR750 billion coronavirus recovery fund

BRUSSELS (AP) – The European Union (EU) proposed yesterday EUR750 billion (USD825 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.

Unveiling the package to EU lawmakers, European Commission President Ursula von der Leyen said, “This is Europe’s moment. Our willingness to act must live up to the challenges we are all facing.” She said that the fund, dubbed Next Generation EU, is “providing an ambitious answer.”

Two thirds of the money would take the form of grants, while the rest would be made up of more conditions-based loans that countries could apply for.

Italy and Spain would each be eligible for around EUR80 billion in grants. France and Poland would have access to around EUR38 billion, while Germany could get
28 billion.

The grants will not just be handed over. Countries 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.

Italy, Spain and Poland would also be eligible for tens of billions of euros in loans, but the conditions are more onerous.

The 27-nation EU remains deeply divided over what conditions should be attached to the funds, and the commission proposal is likely to set off weeks of wrangling.

The move comes as the world’s biggest trading bloc enters its deepest-ever 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 health care systems, businesses and jobs alive.

European Council President Charles Michel and European Commission President Ursula von der Leyen participate in a media conference after a video conference with EU leaders in EU summit format at the European Council building in Brussels. PHOTO: AP