EU recovery plan to be presented in a month

BRUSSELS

In a month the European Commission is expected to present a long-term economic recovery plan from the coronavirus pandemic, commission President Ursula von der Leyen on Thursday told reporters after a videoconference of EU heads of state and government.

EU leaders had tasked the European Commission to make a proposal on a recovery fund linked to the bloc's 2021-2027 budget.

The question of the economic bailout has deeply divided EU member states over the past month.

Italy, Spain, and France have been insisting on launching an EU-wide reconstruction program financed by all members, while Germany, the Netherlands, Austria and Finland refused, fearing ending up being permanently responsible for financing the highly indebted southern countries.

The fact that EU leaders could agree on the framework of the recovery plan is already considered a major step forward.

According to the initial plan, the recovery fund will be linked to the EU budget, which enables the European Commission to take a loan from financial markets to be redistributed between member states.

For this purpose, von der Leyen said she thinks the national contributions to the EU budget should be doubled from the current 1% of gross national income.

But she was unable to estimate the size of the credit that the European Commission could take.

It is also unclear if EU member states could benefit from grants or loans under the recovery scheme, but von der Leyen suggested a balanced approach between the two types of financial support.

Besides discussing the long-term recovery plan, EU leaders endorsed an immediate €540 billion ($590 billion) virus financial support package as agreed on by the eurozone finance ministers two weeks ago.

The package is expected to enter into force on June 1 to help workers, businesses and healthcare systems recover from the coronavirus crisis.

The novel coronavirus has spread to 185 countries and regions since emerging in China last December.

More than 2.68 million cases have been reported worldwide, with the death toll over 187,000, according to data compiled by the US’ Johns Hopkins University. Recoveries have surpassed 732,000.