According to the proposal of the EU Commission published in June 2020, EU would create a COVID recovery fund of EUR 750 billion. This huge amount of money would be divided up into EUR 500 billion given to EU countries as grants, the remaining EUR 250 billion would be available as loans. The Italian, the Spanish and the French leaders welcomed the proposal and they would like to free up the resources soon. The fund is part of an updated multi-annual financial framework (MFF), the EU’s long-term budget. The MFF will mobilize an additional EUR 1.1 trillion between 2021 and 2027.
The EU executive intends to pay back the debt by spreading the costs over a long period of up to 30 years, and by introducing new EU taxes, including ‘green’ duties on carbon emissions or plastics or digital tax. In order to make the fund available as of 1 January 2021, the agreement on the main features of the package should be reached in the summer.