Coronavirus: Rocky path ahead for European Commission

Andrew Cummings
May 29, 2020

It's proposing three investment pillars for this fund: One focused on support for EU Member States via direct investment and reforms; a second focused on kick starting the EU economy by incentivizing private investments; and a third aimed at learning lessons from the COVID-19 crisis, with a big focus on health, as well as civil contingencies and foreign aid. But the new plan is unlikely to be welcomed by all.

Divergencies and disparities increase and we only have two choices: either we go it alone, leaving countries and regions behind, or we take the road together.

Addressing a press conference in Government House, Plenkovic said that the document that was presented earlier in the day by European Commissioner President Ursula von der Leyen, and in particular the economic recovery plan for the Union, is important for all members states including Croatia.

EU-BUDGET-RECOVERY

The European Commission said on Thursday (May 28) it wanted to set up a permanent reserve of essential drugs and medical equipment to address shortages that have dogged the EU for years and worsened throughout the Covid-19 pandemic.

There's also more money for the InvestEU investment program which the Commission wants to see hitting €15.3BN over the budget period to spin up more private investment in projects across the EU.

"This is Europe's moment", said European Commission President Ursula von der Leyen in a statement announcing the plan.


Simson, the Estonian member of the European Commission, said in a press release that the recovery plan is extensive enough to provide a real impetus for the economy and specific enough to move towards a greener, more digital and more resilient economy. Some of the cash will go as grants to the European Union budget programs including development aid and farm subsidies and other funds will be given to countries as loans based on recovery plans pitched to Brussels. Repayments would not begin before 2028, with the full amount due after 30 years.

The commission, however, also said that the borrowing costs for the grants will start to be paid under the 2021-2027 budget, with the estimated costs to be up to €17.4bn.

Italy, Spain and Poland would also be eligible for tens of billions of euros in loans, but the conditions are more onerous.


Under the second pillar, a new Solvency Support Instrument is meant to mobilize private resources to support what the Commission bills as "viable" European companies in the sectors, regions and countries most affected.

Asked whether member states would approve the Commission's proposal for the MFF, Plenkovic confirmed that they would as the proposal had previously been "tested".

Mrs von der Leyen will give details both of the recovery "instrument" and how it will be integrated into the EU's wider 2021-27 budget.


He said "now the government will define, as Conte has said, a national Recovery Plan linked to the European measures".

Other reports by iNewsToday

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