Von der Leyen Plan: 750 billion Recovery Fund, 500 of which are non-refundable. 82 billion of aid and 91 of credits are foreseen for Italy

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THE EUROPEAN RELAUNCH PLAN

The President of the European Commission presented before the European Parliament in plenary session the proposal of the European Commission to strengthen the EU budget also through the new Recovery Fund

by Beda Romano

Ursula vond der Leyen, President of the European Commission (Reuters)

The President of the European Commission presented before the European Parliament in plenary session the proposal of the European Commission to strengthen the EU budget also through the new Recovery Fund

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FROM OUR CORRESPONDENT
BRUSSELS – The recovery fund is 750 billion euros, as proposed by the European Commission on Wednesday 27 May after long weeks of prevarications. The Community executive also proposes that the new instrument, which will be associated with the 2021-2027 Community budget, distributes 500 billion in the form of grants and another 250 billion in the form of loans. It is a historic step in European integration.

91 billion in subsidies to Italy
It is “a European turning point to face an unprecedented crisis,” Commissioner for Economic Affairs Paolo Gentiloni wrote on Twitter. According to information collected by Reuters, Italy could go 82 billion in grants and 91 billion in loans. By way of comparison, another country particularly affected by the flu pandemic, Spain, would receive 77 billion in grants and 63 billion in loans. The final amounts will depend on the application.

Funded with long-term bonds
The new Fund for Recovery, and it is the historical novelty, will be financed by bonds of the European Commission. The bonds will have different maturities, but the commitment is to repay them by 2058, and not before 2028. “The goal – explains a community representative – is to benefit from the entire yield curve, with a maximum maturity of 30 years ยป.

Historical turning point
Brussels proposes to the Twenty-Seven to repay the debt with an increase in own resources (digital tax and carbon dioxide tax, among the hypotheses).
So far, the European Commission has issued debt for specific objectives and very limited amounts (tending to help the balance of payments of countries outside the euro area). With this proposal, the prospects of the European Union change. Significant funding powers are entrusted to the EU executive, powers so far limited to two financial institutions with particular objectives: the European Investment Bank and the European Stability Mechanism.

The three pillars of the Fund
Confirming the information circulated in recent weeks, the new Recovery Fund will be based on three pillars, respectively dedicated to supporting member countries, reviving the economy, and strengthening existing programs. The Community proposal is more generous than the Franco-German hypothesis of a few days ago. Together Berlin and Paris had suggested a 500 billion euro fund, all of subsidies.
The Recovery Fund, entirely dedicated to the economic crisis caused by the flu pandemic, will be associated with the Community budget for the next seven years. According to the proposal presented before the European Parliament by the President of the European Commission Ursula von der Leyen, the new European financial for the period 2021-2027 should have a value of 1,100 billion euros, almost unchanged compared to the pre-pandemic influenza proposal.



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