European Commission unveils €750 billion recovery plan for member states

The European Commission proposed a €750 billion recovery fund on May 27 to ensure “sustainable, even, inclusive and fair” recovery for all member states. Announcing the plan, European Commission President Ursula von der Leyen said that the recovery plan will turn the immense challenge into an opportunity by investing in future, apart from supporting the recovery.

The recovery fund of €750 billion along with targeted reinforcements to the long-term EU budget for 2021-2027 will bring the total financial budget to €1.85 trillion. Von der Leyen said that the plan will invest in the European Green Deal and digitalisation which will boost jobs and growth, the resilience of societies and the health of the environment. 

“This is Europe's moment. Our willingness to act must live up to the challenges we are all facing. With Next-Generation EU we are providing an ambitious answer,” touted the Commission President.

The money will be raised by temporarily lifting the own resources ceiling to 2 per cent of EU Gross National Income, allowing the Commission to use its strong credit rating to borrow €750 billion on the financial markets. The recovery fund will be invested to support the member states with investments and reforms, kick-start the EU economy by incentivising private investment,  and address the lessons of the crisis. 

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'Europe will arise more competitive'

From the Next Generation EU budget, the new Recovery and Resilience Facility of €560 billion will be used to offer financial support for investments and reforms. Commissioner Johannes Hahn, in charge of the EU budget, said that the common budget is at the heart of Europe's recovery plan. 

“The additional firepower of Next Generation EU and the reinforced multiannual financial framework will give us the power of solidarity to support member states and the economy. Together, Europe will arise more competitive, resilient and sovereign,” said Hahn in a statement.

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