THE European Commission has announced that it proposes to create a fund worth €750 billion to assist various member states in their economic recovery following the coronavirus, Covid-19 pandemic.
The main beneficiary if all is approved, will be Italy who will be offered €172.44 billion by way of grants and loans followed closely by Spain with a grant of €77.32 billion and loan of €63.12 billion, with other member states including France and Germany benefitting from the fund.
In order to receive these funds, each country will have to prepare and present recovery plans that show they will use them in accordance with the Commission’s economic recommendations with particular attention to ecological and digital improvements.
The European Union will also make some funds available to assist investment in commercial operations as well as the building up of common stocks such as sanitary equipment for use by members should a similar event occur in the future.
To finance this, the EU is looking for members approval to issue interest bearing bonds using the Union’s budget income to back the bonds which should allow for low interest rates to be paid and would mean that there would be no need to increase the amounts that member states contribute to the EU.
Repayment of the principal and interest on this debt would start from 2028 and to pay for it, the Commission proposes to introduce new sources of income for budgets, to possibly include a border carbon tax , an expansion of the European emissions trading system, a digital tax as well as the much debated ‘Google tax’.
This is not by any means cut and dried but the proposal has been presented to the European Parliament by the Italian Commissioner for the Economy, Paolo Gentiloni.
Britain will not automatically benefit from any grant or loan.