Summary of EU Recovery Fund

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The coronavirus has hit the European Union hard. In mid-July 2020, following four days of intense haggling, EU negotiators hammered out an accord to provide monetary support to member governments. The agreement gives the European Commission an extraordinary authorization to borrow money from the financial markets for a recovery fund to distribute to states in the bloc. In this brief, plain-English overview, journalists Jim Brunsden, Sam Fleming and Mehreen Khan offer a look at the proposed plan’s inner workings.

About the Authors

Jim Brunsden, Sam Fleming and Mehreen Khan are journalists with The Financial Times.

 

Summary

European Union leaders have crafted a deal to rebuild member states’ economies ravaged by the coronavirus.

EU leaders have committed to raising €750 billion [$889 billion)] in the capital markets to support a regional economic recovery package called Next Generation EU. That total attaches to the EU’s forthcoming seven-year budget.

The agreement contains a €390 billion allotment for grants to member states, along with a set-aside of the remaining amount for loans. Distribution of the funds will occur between 2021 and 2023, in accordance with individual members’ “national recovery plans.”

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