President of the Council of the EU tries to convince the “Four Bursars” on the budget

BRUSSELS (AP) – As pressure mounts to reach agreement on a post-coronavirus economic recovery plan, the President of the European Council on Friday tried to convince the so-called “four frugal members” of new proposals.

Charles Michel’s latest offers keep the size of the stimulus fund, intended to help EU countries overcome the shock of the economic crisis, at 750 billion euros (850 billion dollars).

But to gain broad support for the package, he offered some countries financial incentives on their contributions to the wider EU budget, which pools the funds of the 27 bloc countries to spend on common goals like the development, fight climate change and support key industries such as agriculture.

Speaking at a press conference on Friday – a week before EU leaders physically meet in Brussels in order to reach an agreement on the stimulus fund and the budget – Michel proposed an adjusted budget for the period 2021-2027 amounting to 1,074 trillion euros.

In order to convince the recalcitrant, he said that certain countries which pay more into the budget than they would receive would receive discounts on their contributions. These countries include the “four bursars” who are opposed to the composition of the stimulus fund – the Netherlands, Denmark, Austria and Sweden – as well as Germany.

Michel’s offer reflects the will of many European leaders to get the stimulus fund up and running as soon as possible as economies sink into recession and people lose their jobs.

According to current European Commission proposals, aid from the € 750 billion stimulus fund would include € 500 billion in grants and € 250 billion in loans for EU countries.

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Above all, the subsidies would be supported by a debt common to the EU countries. The European Commission has a triple A credit rating, which would give it favorable loan terms.

But many wealthy countries have long opposed the idea of ​​borrowing money together. Germany supported the decision in this case, arguing that it is an emergency. But the “Frugal Four” continued to oppose the idea the last time they discussed it three weeks ago.

“On June 19, the leaders had a first discussion on this proposal which revealed strong opposition to certain elements of the package,” said Michel.

Michel said it was essential to include grants, not just loans, in the stimulus package “to avoid overloading member states with the higher debt levels.” This is the key to the future of the single market. “

Michel offered to help reimburse the costs of the recovery fund with the revenue from future taxes on plastic waste, carbon imports and a “digital levy” which has not yet been introduced.

His plans also include a € 5 billion “Brexit reserve” which should be used to “counter the unintended consequences” of Brexit for the countries most affected by Britain’s withdrawal from the 27-nation bloc.

Source: AP News

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