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EU Commission proposes €750 billion coronavirus recovery fund

The European Commission has proposed a recovery fund of €750 billion, which it says is designed to repair the economic damage caused by the coronavirus pandemic.

According to European Commission President Ursula von der Leyen, the money would be disbursed via grants and loans, with the commission using the EU budget as leverage to raise funds on the financial markets.

After the pandemic hit Europe, there were weeks of division and rancour over the EU’s response, with the worst hit countries accusing richer northern member states of lacking a spirit of solidarity.

The EU has already approved €540 billion in soft loans and supports in its immediate response, but today’s proposal is for the big recovery effort that Europe will need once the pandemic passes.

The plan is that the commission would raise new forms of revenue for its seven-year budget, and then use that money to raise the €750 billion on the markets.

That money would go to the member states, regions and economic sectors worst hit.

The digital economy and the new European Green Deal, designed to make the continent carbon neutral by 2050, would be prioritised.

The idea is that lessons will be learned and extra resources channeled to research and development, and to stockpiling vital medical and personal protective equipment.

But the plans will face formidable opposition from member states such as Austria, the Netherlands, Sweden and Denmark.

They are the so-called “frugal four”, who only want the recovery fund to come by way of loans, which will have to be paid back by member states.

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