Europe has €1.82tn strong common seven-year budget and recovery fund

The financial stimulus for mitigating the coronavirus consequences will be €390bn in grants and €360bn in loans

Photo: EU Ursula von der Leyen and Charles Michel after the press conference on Tuesday morning.

At their first physical European summit since the coronavirus outbreak, after four full days and two full nights of challenging talks, the leaders of EU27 succeeded to strike a deal on the bloc’s long term budget for 2021-2027 and coronavirus recovery fund. The overall amount of the package is €1.824 tn. 

The special new one-off instrument for mitigating the consequences of the novel coronavirus, that will support the countress hardest hit from the crisis  - the Next Generation EU recovery fund, will provide €390bn in grants and €360bn - loans for a total envelope or €750bn, they decided.

The amounts under Next Generation EU for Recovery and Resilience Facility will be €672.5 bn of which loans - €360bn, grants - €312.5bn. From the other programmes, the ReactEU will receive €47.5bn, the InvestEU - €2.1bn, the Rural Development - €7.5bn, the Just Transition Fund - €10bn, and the RescEU - €1.9bn.

The volume of the MFF remains the same, as he proposed it on 10 July - €1.0743tn and small shifts inside it.

Given that the New Generation EU is an exceptional response to those temporary but extreme circumstances, the powers granted to the Commission to borrow are clearly limited in size, duration and scope, read the conclusions of the longest in the last 20 years meeting of the EU heads of state and government.

The sitting was launched on 17 July in the morning and was concluded on 5:30 on Tuesday, 21 July, the national holiday of Belgium. The summit was initially planned for two days.

“We did it! Europe is strong, Europe is united”! With these words started the early morning news conference Charles Michel, President of the European Council gave together with EC President Ursula von der Leyen.

Saying that these were difficult negotiations in very difficult times for all Europeans, he opined that this is “the right deal for Europe”.

He specified that it is the first time in European history that the EU budget will be clearly linked to the climate objectives and “the first time that the respect for rule of law is a decisive criteria for budget spending, jointly re-enforcing our economies against a crisis”.

This is a signal that Europe is able to act, said EC President von der Leyen. She added that people often accused Europe as being ‘too was too little, too late’, and here we demonstrated that the opposite is the case. The EC President also pointed out that two months after the Commission received a mandate from the European Council for designing a recovery package, the Next Generation EU is up and running.

 

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