Date Published: 21/07/2020
ARCHIVED - Agreement in European Covid recovery fund talks; 140,000 million euros for Spain
ARCHIVED ARTICLE
The €1.1tn budget for the next seven years was also approved
Following a fourth night of talks EU leaders have struck a deal on a huge post-coronavirus recovery package valued at €750bn in grants and loans to counter the impact of the pandemic in the 27-member bloc.
Spain will receive some 140,000 million euros from the European recovery fund, of which 72,700 million will be given in direct aid, said Prime Minister, Pedro Sánchez, in his presentation to the Spanish media following agreement on the fund and the multiannual financial framework.
"It is a great agreement for Europe and for Spain; there is no doubt that today one of the brightest pages in the history of the European Union has been written," Sánchez said at a press conference in Brussels shortly after consensus was finally reached.
"Today all Europeans win and the European Union comes out much stronger," insisted Sánchez, saying that the negotiation of this agreement has been an "extraordinary challenge" that has required "strenuous work" but whose result "has been worthwhile”.
The agreement comprises a large Recovery Fund of 750,000 million euros, called "Next Generation EU", The objective of the Fund is to mobilize a massive amount of European public resources so that the recovery, after the COVID-19 crisis, is as swift and strong as possible. A recovery that must be sustained on three pillars that allow for strong, balanced and sustainable growth: the digital transition, the ecological transition and the training of students and workers.
Of the 750 billion euros in "Next Generation EU", 360 billion will be dedicated to loans and 390 billion to grants, to be made based on the impact of the pandemic.
In order to mobilize all those resources, which represent the equivalent of 4.6% of the European Gross Domestic Product (GDP) of 2019, the European Commission will borrow for the first time in history to fund the programmes. This is a giant step in the union of the European nations, in keeping with the magnitude of the economic and social crisis caused by COVID-19.
Summit chairman Charles Michel said it was a "pivotal moment" for Europe.
During the negotiation, the Government of Spain secured approximately 140,000 million euros to be paid over the next six years: more than 11% of the GDP of the country. 72,700 million euros will be in the form of grants. The remainder will be made available in the form of low-cost loans.
Italy and Spain were the main recipients of the grants as these two countries have been hardest hit by the effects of the Covid-crisis.
The approval of cohesion funds in the 1990s gave a major boost to European integration and played a major role in the economic development of several countries in the Union. "If the cohesion fund represented for Spain the equivalent of about 7,800 million euros then for a period of six years, what we have approved today means almost 73,000 million euros for our country: almost 10 times the size of those funds of cohesion, which were so important for the progress and prosperity of all Spaniards, "Sánchez said.
The Recovery and Resilience Mechanism will have 672,500 million euros -312,500 in subsidiess-, of which 59,000 million euros correspond to Spain. This programme will fund a national plan of reforms and investments to support the growth and transformation of the Spanish economy, in areas such as ecological transition, digital transformation, education or the improvement of social protection.
The ReactEU program will have 47,500 million, of which 12,400 million correspond to Spain.
The package will now face more technical negotiations by member states, and require ratification by the European Parliament.
-->