The European Parliament has approved by a large majority the EU recovery fund, endowed with 750,000 million euros, which will add to the Union’s multi-annual budget of € 1.7 trillion. With 582 votes in favor, 40 against and 69 abstentions, the money will not reach the countries until all the states have ratified the legislation. Brussels urges speed.
“It means that we approve and adopt a European response. But the money has not yet reached citizens, families, companies, and states. Now national parliaments must ratify the decision to increase the budget to finalize the funds.” , says Margarida Marques, Socialist MEP, member of the Budget Commission.
How will the money be distributed?
Of the 750,000 million euros, 672.5 billion will be delivered between countries. 312.5 billion will go to governments in the form of bonds that there will be no return and 360,000 million in the form of repayable loans. Countries are assigned a specific amount of money based on their population, their unemployment, and the drop in GDP due to the pandemic.
Union governments that have not yet done so have until April 30 to present their plan on how exactly they will spend the money. MEPs warn that the European Commission must be firm when evaluating them.
“They must contain plans that enhance reforms and lead to productive public investment, those are the two main criteria. And then, of course, the European Commission will have to exercise sufficient control so that the money is really spent as planned.”, Johan van Overtfeldt, Belgian MEP, group of European Conservatives and Reformists, and Chairman of the Budget Commission.
Green economy and digital transition
Governments must allocate 37% of funds to ecological recovery measures and 20% to digital transition. It is the first time that the European Commission has issued debt to international markets, but could it be repeated?
“The most conservative wing has expressed that we are facing an exceptional situation in which we need a recovery fund, but that once the pandemic has disappeared, we have to make sure that the EU will not need a similar mechanism again. We believe that during other crises, perhaps we could go back to using instruments like this recovery fund “, says Rasmus Andresen, German MEP from The Greens / European Free Alliance, and also a member of the budget committee.
For now, only 19 of the 27 Member States have sent the draft of their national recovery plan to the European Commission.