750 billion recovery plan. For Italy 80 of subsidies and 90 of loans

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About two hours after the official announcement by Ursula von der Leyen, the figures for the expected Recovery Fund are released, a new instrument included in the European budget and also financed with Commission bonds to face the economic crisis triggered by Covid-19. Let’s start with the name: it will be called ‘Next generation Eu’, because in the Commission’s intentions it is a “new generational pact”. The coronavirus crisis hit things that were taken for granted first, argues the president of the European Commission to the European Parliament, fuchsia jacket just like the day she was elected with the Palazzo Berlaymont team last November: after all, that of today is a historic day for the EU. “Nobody can do it alone,” says von der Leyen, the economies of the Member States “depend on each other”, “do not invest today, it means paying the costs tomorrow”. The fund serves to rebalance a situation in which “some states have more opportunities than others to raise funds on the market”. For this, the Commission will do it, through common bonds.

According to what is read in the final text of which Huffpost has an early vision, the new fund amounts to a total of 750 billion euros: 500 billion in grants and 250 billion in loans. According to government sources, the package for Italy amounts to 172.7 billion euros: 81.807 billion would be paid as non-refundable aid and 90.938 billion as loans.

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“The funds for Next Generation EU – reads the proposal of the European Commission – will be raised by temporarily increasing the ceiling of the EU’s own resources to 2% of the EU’s gross national income. This will allow the Commission to use its very strong credit rating to borrow € 750 billion on the financial markets for Next Generation EU. The funds raised must be repaid through future EU budgets, not before 2028 and not after 2058 “.

“To help to do it fairly and in a shared way, the Commission will propose some new own resources”, such as “a new own resource based on the ETS (Emissions trading scheme, ed.), The ‘carbon border tax'”, on polluting products from non-EU countries, or a tax on digital mutlinationals, based on the work done by the Organization for Economic Cooperation and Development (OECD). The Commission actively supports the discussions conducted by the OECD and G20 and is ready to act if no global agreement is reached. ” Furthermore, the Commission text speculates “simplified VAT” and taxes on “non-recycled plastic”.

In addition to ‘Next Generation Eu’, the Commission proposes a new European multiannual budget “equal to approximately 1.100 billion euros between 2021-2027”, equal to 1.1% of European gross national income, which is still lower than the proposal originally from the European Parliament (1.3%).

And let’s get to the ‘conditions’. The money from the new fund is based on three pillars, the first is “to support member countries to make investments and reforms to face the crisis”. Here is the passage: “Member States will develop their own personalized national recovery plans, with priority to the investments and reforms identified as part of the European semester, in line with the national plans for climate and energy, the plans related to the Green deal (‘Just transition plans’) and partnership agreements and operational programs in the context of EU funds “.

The second pillar is dedicated to “private investments”. The third looks at health and prevention in view of possible future crises.

However, the proposal does not contemplate the immediate elimination of the so-called ‘rebates’, the discounts on contributions to the EU’s multi-year budget benefiting countries such as Germany and Holland. Here is what the text provides: “The Commission continues to believe that phasing out all discounts will result in a more balanced multi-annual financial framework. However, in the current situation, given the economic impact of the Covid-19 pandemic, the phasing out of discounts would lead to disproportionate increases in contributions for certain Member States over the 2021-2027 period. To avoid an increase in contributions, the current discounts could be phased out over a much longer period of time than the Commission anticipated in its 2018 proposal. ”

As anticipated by Huffpost two days ago, Ursula von der Leyen’s proposal follows the one presented last week by Angela Merkel and Emmanuel Macron in a re-edition of the historic Franco-German axis which in fact unlocked the impasse of the negotiation on community responses to the crisis, blocked by vetoes between north and south.

The plan of the European Commission therefore accepts the requests of the southern states, France and Italy in the lead, that is mainly that of dedicating the largest part of the fund to grants rather than loans, so as not to burden the debt of the states. The European Commissioner for Economy Paolo Gentiloni comments positively: “The Commission is proposing a 750 billion Recovery Fund which is added to the common instruments already launched. A European turning point to face an unprecedented crisis “.

As for the so-called ‘frugal’ countries, which have opposed the Commission’s proposal from the outset, Holland says no. “It is difficult to imagine that this proposal will be the end result of the negotiations,” says a source from the Dutch government. “The positions are far apart and this is an area where unanimity applies. Negotiations will take time. ”

In a letter to the co-chairs of the ecological group in the European Parliament, Philippe Lamberts and Ska Keller, Green Werner Kogler writes: to overcome the crisis caused by the Covid-19 pandemic, which constitutes a “vital challenge” for the EU, it serves ” a recovery and resilience plan “whose main component must be” public investment “. The plan “must be financed and repaid jointly, avoiding to worsen the public debt of individual Member States”. In the Austrian coalition government with the EPP, the Greens tried to curb the ‘fury’ of Chancellor Sebastian Kurz, leader of the rigorist countries opposed to the Franco-German proposal.

The President of the People in the European Parliament, German Manfred Weber, is forced to accept the Commission’s ‘challenge’: “Schuman’s spirit is back,” he says. Of course Weber emphasizes how money is spent and the reforms that Member States will have to carry out as a condition for having the resources: “I don’t want to see an indebted Union but for this we have to invest now, the point for us is how invest. ”

It should be emphasized that the debate on the recovery fund is staged very strongly in the plenary of the European Parliament, with a blow and response between Popular Weber and the president of the Greens group, the German Ska Keller. He ‘pinches’ the Greens on the fact that in Austria they govern together with the Popular. She replies: “It is easy to hide behind the Greens, but we have brought Kurz to a position compatible with the Commission’s plan …”.

“With the plan presented by President Ursula Von der Leyen, we can consider today’s day as the true beginning of the legislature of change,” says Sandro Gozi, Renew Europe MEP. “The 172.7 billion of the fund destined for Italy, compared to 38.7 in France and 28.8 in Germany, are also the best answer to those Italian sovereigns and neo-nationalists who never miss an opportunity to attack the EU, which they hope for the exit of our country and that they speak of Europe with Franco-German traction ”.





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