To contribute to repairing the economic and social damage caused by the Coronavirus pandemic, the European Commission proposed on May 26, 2020, an ambitious recovery plan for all member countries of Europe based on the use of the European Union's budget. This European Recovery Plan was approved on July 21, 2020, when an agreement was reached on an aid package of 1,824.3 billion euros. This package is expected to contribute to the reconstruction of the European Union after the COVID-19 pandemic and, at the same time, to support investment in the ecological and digital transition, towards a Europe neutral in pollution and carbon emissions.
But exactly what does Europe's Recovery Plan consist of?
To mobilize the investments necessary for economic and social recovery, the Commission presents a twofold response:
Next Generation EU, will be the recovery instrument equipped with 750 billion euros to grant aid between the period of 2021 and 2023. Reinforced long-term European budget for the period 2021-2027, endowed with 1.1 trillion euros.
How will the recovery fund or Next Generation EU work?
Of the total amount of Next Generation EU instrument or European recovery fund, 750 billion euros, 390 billion will be distributed in non-refundable grants and 360 billion in loans. Most of the money will be disbursed through the Instrument for Recovery and Resilience, specifically 672.5 billion euros, 312,500 of them as direct transfers and 360,000 as credits. These grants will be used to finance reform and investment programs in the countries most affected by the outbreak of the pandemic.
Endowment for Spain
As a country seriously affected by this crisis, Spain is one of the major beneficiaries along with Italy and Poland. In the case of Spain, the country will receive an endowment of 140 billion euros.
How can aid be accessed?
Countries will have to submit reform and investment plans to the European Commission (EC). Once presented, it will be the EC itself, who will evaluate if they comply with its annual economic recommendations, reinforce growth potential or job creation, or favor the ecological and digital transition. These plans will have to be approved by a qualified majority in the Council (at least fifteen Member States representing 65% of the entire EU population).
When will the plan take effect?
The plan will start working in January 2021.
