After days, in what has been called the longest-ever summit, EU leaders have been able to conclude an impressive and “historical” deal concerning the economic recovery of the bloc. Despite stalemates and initial conflicts, the talks ended with a €750 billion deal.
-France and Germany had proposed a €500 billion debt-for-grants program in May, which the European Commission adopted
-Threats of a French walkout
-Close Hungarian veto
-Strong dissent from the Netherlands and Austria on details
How will the stimulus be funded and spent?
The capital will be collected from the international markets and then redistributed on 4 main areas:
1. Cohesion policy, recovery and resilience (672.5 bn)
2. React EU (47.5 bn)
3. Agricultural policy, Just Transition fund (17.5 bn)
4. Horizon EU, InvestEU fund, RescEU (12.5 bn)
In other words, the investment will be primarily used to restore the countries that have been hit the hardest from COVID-19.
Most leaders expressed confidence and positivity regarding the results, while others including Mark Rutte, the leader of the Netherlands, were more satisfied and focused on the clauses and the governance model.
Angela Merkel indicated great sentiment towards the agreement by describing it as a good indication of the European solidarity.
The approval from the European Parliament (EP) is the last step needed for the initiation of such plan. Regarding the text, which serves as a mandate for the upcoming negotiations on the future EU financing and recovery, Parliament welcomes EU leaders’ acceptance of the recovery fund as proposed by Parliament in May. However, members of the EP have already indicated disaccord on various components.
It can be said that the direction has been set, albeit details must be further discussed. In these uncertain times, do you need assistance in planning for the future? Contact us at: https://www.yanincorporation.com/businessplanning