Reaching an agreement on a far-reaching Covid-19 recovery plan budgeted at 750 billion euros topped the agenda of an EU leaders meeting on Friday as the Union prepares to face the worst recession in its history.
The virtual summit examined the Commission’s proposed coronavirus rescue fund dubbed “Next Generation EU” aimed at supporting member states’ Covid-19-impacted economies and whether costs should be taken on by the EU or by individual member states.
Austria, the Netherlands, Sweden, and Denmark have repeatedly opposed the idea of issuing common debt that would be covered by the Union, instead requesting that funds be allocated as loans to individual members rather than grants to be paid for by the Union.
At the top of the agenda was reaching a compromise by mid-summer on how to manage the said rescue package.
Addressing the forum, Commission President Ursula von der Leyen urged leaders to support the plan without delay so as to help the EU recover its economy after Covid-19.
“Today we take a crucial step on the road out of the crisis. I’m happy to present #NextGenerationEU to European leaders at today’s EUCO. Our recovery package will help Europe’s recovery be resilient, sustainable & digital. We now must all pull together. We cannot afford any delay,” she said via her twitter account.
Backing von der Leyen, European Central Bank President Christine Lagarde and German Chancellor Angela Merkel also warned leaders that if they fail to agree on a rescue package, the consequences could be dire.
The proposed 750-billion-euro instrument to be part of the revamped long-term EU budget, will prioritise actions needed to propel Europe’s recovery and resilience in an inclusive for all member states and fair manner – which in effect would be through a combination of debt mutualization, grants and loans.
Other issues include revising the EU’s next long-term budget plan for a predicted 1.1 trillion euros in spending in the 2021-27 period and criteria for the allocation of funds.
Diplomats don’t have high hopes but are expecting a common declaration of goodwill towards reaching a comprise by mid-July.