Brussels, Jul 21 (efe-epa).- The European Union’s heads of state and government on Tuesday morning approved a recovery plan and seven-year budget worth nearly 2 trillion euros to kickstart Europe’s economies, which are facing an unprecedented crisis due to the coronavirus pandemic.
The deal, described by many of the leaders as “historic,” was reached after four gruelling days of talks at a European Council summit in Brussels.
The 27 member states approved a recovery fund of 750 billion euros to be financed by issuing mutual debt and a seven-year budget worth 1.074 trillion for 2021-27.
“These were, of course, difficult negotiations in very difficult times for all Europeans,” President of the European Council, Charles Michel, told a press conference held at day break on Tuesday morning. “This is a good deal. This is a strong deal. And most importantly, this is the right deal for Europe, right now.”
The package’s magnitude and scope is unprecedented in the history of the bloc.
The president of the European Commission, Ursula von der Leyen, who joined Michel for the briefing, said: “Today we’ve taken a historic step (that) we all can be proud of,” while praising the EU’s collective spirit in facing an unprecedented economic and health crisis.
The 750-billion euro package will be split into 390 billion to be distributed in the form of grants to member states and 360 billion in loans. The European Council had initially proposed 500 billion euros to be granted as direct aid with the remaining 250 billion euros offered as loans.
The concessions were made by the majority of member states to appease the Netherlands, Austria, Denmark, Sweden and Finland.
These so-called frugal nations successfully negotiated to lower the volume of the grants and maintain lump sum rebates on the annual gross national income-based contribution to the EU’s budget.
These issues, along with a proposal to tie the receipt of budget funds to respect for the rule of law, had been the main sticking points in at times heated discussions.
A majority of member states including the bloc’s larger countries France, Germany, Spain and Italy, had wanted to guarantee at least 400 billion euros in grants, while the frugal nations wanted them to total 350 billion. EFE-EPA