After several days of negotiations, European Union leaders have finally reached an agreement on the €750 billion recovery fund designed to help member states recover from the economic impact of the COVID-19 pandemic. The plan is historic as it marks the first time the EU will borrow money collectively and distribute it as grants to member states.
The agreement was reached after four days of intense negotiations and involved discussions on the distribution of the funds, the level of grants versus loans, and the conditions attached to the funding.
Under the agreement, the €750 billion will be split, with €390 billion in grants and €360 billion in loans. The grant portion is designed to provide much-needed funds to member states hit hardest by the pandemic, while the loan portion will assist other member states in their recovery efforts.
The agreement also includes several clauses aimed at ensuring that the money is used effectively and in line with EU values. These include the requirement that member states submit detailed plans on how they intend to use the money and regular reporting on their progress. Additionally, the agreement stipulates that the funds can only be used for investments that will contribute to the green and digital transition of the EU.
The agreement has been welcomed by many, with European Commission President Ursula von der Leyen calling it a „historic moment for Europe.” The agreement is seen as a crucial step in preventing a further widening of the economic gap between the EU member states and strengthening the union`s resilience to future crises.
However, others have criticized the agreement for not going far enough and for being too reliant on loans rather than grants. They argue that many member states, particularly those hit hardest by the pandemic, will struggle to repay the loans and may end up in a worse financial position.
Overall, the agreement on the EU recovery plan is a significant milestone for the EU and a positive step towards economic recovery. However, it remains to be seen how effective the implementation of the plan will be and whether it will be enough to prevent further economic hardships in the future.