The EU Has Not Agreed To Create A Recovery Fund
The leaders of the EU Member States failed to show sufficient solidarity when discussing the creation of a recovery Fund in the amount of 1.6 to 2 trillion euros to address the consequences of the coronavirus pandemic over a teleconference. The parties did not agree on the amount of aid and sources of funding, ORF TV channel reports.
This is the fourth video summit of the EU. It is intended to outline a reconstruction program. However, the debate on Eurobonds has come to an end. It was assumed that all EU countries would be jointly responsible for them. However, the issue of common securities was opposed by Austria, Finland, Germany, the Netherlands, and Sweden. They believe that poor countries should have accumulated more funds in good times to create a safety cushion.
Before the consultations, Chancellor Angela Merkel promised to increase Germany's payments to the EU budget to help overcome the economic consequences of the pandemic in Europe. "For a limited period, we must make significantly higher contributions to the European budget," the politician announced the government's decision in the Bundestag.
The participants of the video summit instructed the European Commission to develop proposals for the creation of a recovery Fund of 1.6 - 2 trillion euros. While the question remains open, on what principles it will work. Whether we are talking about providing direct assistance to the countries most affected by coronavirus or providing them with loans.
According to the President of the European Council, Charles Michel, all member States are in favor of mutual solidarity. We just need to find the right solutions. For these purposes, especially in the first two years, the EU budget for 2021-2027 will be suitable. It can be used as a basis for developing new financing tools and attracting investment.
According to Reuters, citing an EU source, it may take additional time to make a final decision. Some EU countries, including Greece, are in favor of providing grant loans from the reconstruction Fund, while others are referring to loans. "There are still big differences. Progress may come by June or July, while the issue remains open," the source claims. Brussels believes that an agreement will be reached only if the heads of state and government meet in person. However, no one can say exactly when this will happen.
Earlier, the EU countries agreed on a package of assistance in the amount of 540 billion euros, which consists of credit obligations of the European Stabilization Mechanism (ESM), loans from the European Investment Bank, as well as programs to help businesses, agriculture and people whose working week has been reduced due to the crisis.