The EU has nailed down the historic recovery package worth €750 billion aimed to revive the European economy crippled by the COVID-19 crisis. The EU announced this idea back in May. The painstaking talks eventually ended with the consensus of all 27 EU leaders reached on July 21.
The original proposal of a smaller fund which was brought up by Germany’s Chancellor and France’ President was bitterly objected by several Northern countries which teamed up as the so-called Frugal Four. They disagreed that the EU countries would have to pool up money disproportionately to shore up the ailing economies which suffered the most from the pandemic-driven crisis. They also targeted the idea of grants. At the same time, the countries with a more resilient economy would receive modest financial aid or even nothing. In other words, the EU-backed fund will benefit the countries with the worst COVID-19 mortality rate and weak economies. President of the European Council Charles Michel put forward a series of compromise proposals at the EU summit which were approved by the EU leaders. Having agreed some amendments, the policymakers came to the common denominator. Apart from the recovery fund, the long-term EU budget was also on the agenda. Charles Michel came up with the revised budget of €1.074 trillion for 2021-2027 instead of €1.1 trillion in the first edition. The budget will consist of borrowed funds which the EU intends to pay back within 30 years at the expense of newly-imposed taxes and fees from the EU counties to the common budget.
The lion’s share of the rescue package will be allocated as grants to the following countries: Italy - €81.8 billion, Spain - €77.3 billion, France - €39 billion, and Greece - €22.5 billion.
