The European Commission proposed a €750 billion recovery plan on Wednesday in the aftermath of the new coronavirus.
"To ensure the recovery is sustainable, even, inclusive and fair for all Member States, the European Commission is proposing to create a new recovery instrument, Next Generation EU," the Commission announced.
The instrument, along with "targeted reinforcements to the long-term EU budget for 2021-2027 will bring the total financial firepower of the EU budget to €1.85 trillion," they said.
The EU will lift the ceiling of its own resources to 2% of the EU's Gross National Income (GNI), "allowing the Commission to use its strong credit rating to borrow €750 billion on the financial markets," the Commission explained.
"This additional funding will be channelled through EU programmes and repaid over a long period of time throughout future EU budgets – not before 2028 and not after 2058," they communicated.
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€560 billion of Next Generation EU money will offer financial support for investments and reforms linked to the EU's priorities, including the green and digital transitions and the resilience of national economies. The instrument will also be aimed at incentivising private investments and, as the EU puts it, "addressing the lessons of the crisis."
“The recovery plan turns the immense challenge we face into an opportunity, not only by supporting the recovery but also by investing in our future," said Commission President Ursula von der Leyen.
"Our common budget is at the heart of Europe's recovery plan," said Commissioner Johannes Hahn, in charge of the EU budget. "Together, Europe will arise more competitive, resilient and sovereign," Hahn added.
The EU hopes that there will be political agreement at the level of the European Council by July "on Next Generation EU and the overall EU budget for 2021-2027."
Such a rapid agreement "is necessary to give new dynamism to the recovery and equip the EU with a powerful tool to get the economy back on its feet and build for the future," the Commission said.
The Brussels Times