- European Union leaders has proposed an $825 billion (€750 billion) coronavirus rescue plan to bankroll recovery efforts after the coronavirus crisis.
About: European Union
- The EU is an economic and political union involving 27 European countries.
- It allows free trade, which means goods can move between member countries without any checks or extra charges.
- It also allows free movement of people, to live and work in whichever country they choose.
- The global coronavirus outbreak has already pushed the EU into its deepest ever recession.
- The plan comes following big pressure from Italy and Spain, which are Europe’s first victims of the outbreak and too burdened with heavy debts to alone rebuild their economies.
- The European Union (EU)’s executive has unveiled a €750 billion plan to prop up economies in the blow seriously hurt the coronavirus (COVID-19) crisis.
- Under the proposal, the European Commission would borrow the funds from the market and then disburse two-thirds (€500 billion) in grants and the rest (€250 billion) in loans to help deal with the unprecedented slump expected this year due to the coronavirus lockdowns.
- Much of the money will go to Italy and Spain, the EU nations worst affected by the pandemic.
- Germany and France have jointly endorsed the plan.
- The proposal was unveiled as the EU leaders agreed that if they fail to rescue economies now, they will see a situation worse than that of the 2008 financial crisis that threatened to break up the eurozone.
- The recovery fund package comes in addition to the EU’s long-term budget for 2021-27, which the Commission proposed should be set at €1.100 trillion ($1.21 trillion).
- However, the proposal could still be blocked by more frugal northern nations like Netherlands, which wants to see the recovery package comprise only loans, and not grants.
- The newly unveiled fund will be linked to the EU’s long term 2021-2027 budget and both must be adopted unanimously by the 27 member states and ratified by MEPs (Members of European Parliament).
Aspects of the plan:
- If member states accept the deal as drafted, Italy would receive €81.8 billion in direct aid over the next three years, and €77.3 billion would go to Spain.
- In all, the EU would offer grants of €405 billion, with €28.8 billion going to Germany and 38.7 billion to France.
- In addition, the countries would get loans, with Italy receiving credits for €90 billion and Spain 31 billion.
- If passed, the proposal would be the biggest EU stimulus package in history and could see Europe-wide taxes on plastics, carbon emissions and big tech.
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