EU leaders have reached a compromise on the recovery plan
The head of the European Council, Charles Michel after four days of difficult negotiations with the leaders of the 27 countries of the European Union in Brussels, led the European Council to compromise on the creation of an unprecedented Fund of € 750 billion to restore agroekonomika after the crisis COVID-19.
The summit for the first time since February, was part, European leaders used a mask and tried to keep my distance. From the courtroom periodically come information about heated arguments and opposing positions of the parties.
The fourth day of debate culminated early Tuesday morning with a compromise, which takes into account the most fundamental wishes of both countries are net donors and potential recipients of financial assistance.
According to the published results, the total recovery of the economy, called the New Generation EU or NGEU, will remain at the level of the previous offers of € 750 billion. Means its content will be borrowed by the European Commission on capital markets. The balance of grants and loans to Fund NGEU change: subsidies will be reduced from 500 billion to 390 billion euros, the amount of loans will rise from 250 to 360 billion.
Thus, the President of the European Council made concessions to the leaders of the "Thrifty four" (the Netherlands, Austria, Denmark, Sweden), who spoke strongly against the large amount of subsidies in the Fund.
From the Fund recovery of 70% should be used in 2021 or 2022 on the basis of the criteria of the EC. Another 30% may be involved in 2023. The repayment of European debt on this Fund should be completed before 31 December 2058 year.
Each recipient country of the Fund will have to submit to the EU recovery plan of the national economy with the help of European funds, as well as plans for investment. National plans funded by the EU, will have to undergo an expert evaluation, and then approval by a qualified majority of 27 European States.
Compliance with the European rule of law will also become a criterion for allocation of finances. The decision on this issue will be made without the veto by a qualified majority, which can be considered a victory of Hungary and Poland, which has been criticized for the inconsistency of the European standards in domestic politics and that the summit has strongly opposed the linking of the provision of financial assistance in compliance with the rules of the legal state. Initially, the proposal of the European Commission suggested that such decisions should be taken unanimously, and any of the EU member States could block financial support.
This assumes that at least 30% of the Fund's and the multi-year budget will be spent on projects that will contribute to the realization of the stated EU goals on climate and building climate-neutral economy.
Countries also agreed to maintain unchanged the previously announced amount of multi-year financial plan of the Union for the 2021-2027 years in the amount of 1,074 trillion euros. States are net donors (Germany, Netherlands, Denmark, Austria and Sweden) are expected to provide discounts or refund of part of contributions from the European budget.
For the budget, the EU plans to introduce an additional tax on non-recyclable plastic from the beginning of next year. In turn, the European Commission will prepare new proposals to attract additional funds. This can be, for example, "digital tax" that will pay the international companies operating in the EU. Funds will be used to repay debt obligations in the framework of the restoration Fund.
Started last Friday's summit in Brussels was one of the longest in the history of the Union. He yielded only meeting in nice in 2000, which lasted five days.
According to the forecast of the European Commission, the EU expects this year GDP decline by 8.3%. In 2021 it is expected GDP growth of 5.8%.
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