Brussels, May 27 (efe-epa).- The European Commission on Wednesday unveiled a coronavirus recovery package worth 750 billion euros, the majority of which is earmarked for two of the bloc’s worst-stricken members, Italy and Spain.
In a rousing speech to the European Parliament in Brussels, EC president Ursula Von der Leyen said the “Next Generation EU” recovery plan was an “urgent and exceptional necessity for an urgent and exceptional crisis.”
“The effects of this crisis mean that we need to make investments on an unprecedented scale today, but we will do it in a way that Europe’s next generation will reap (…) the benefits of tomorrow,” she said.
Of the 750 billion euros outlined in the proposal, which must still be approved by the EU’s heads of state at the next European Council meeting, 500 billion will be distributed in grants, with the remaining 250 billion take the form of loans passed onto the member states.
The grants proposal matches the figure tabled by German chancellor Angela Merkel and French president Emmanuel Macron earlier this month.
The funds will be added to the “revamped” long-term EU budget of 1.1 trillion, bringing the total of the Commission’s proposal to 1.85 trillion euros, and will sit alongside the three safety nets worth 540 billion euros that have already been approved by both the European Parliament and Council.
Von der Leyen said the money would be raised by the Commission using its strong credit rating to borrow money on financial markets.
The unprecedented size of the rescue package will come as welcome news in the bloc’s worst affected nations, namely Italy and Spain.
Already on shaky ground before the pandemic, the Italian and Spanish economies were left all but paralyzed for weeks as Rome and Madrid scrambled to contain the spread of Covid-19 with draconian lockdowns.
According to the proposal, Italy is set to receive 173 billion euros — 82 billion in grants and 91 in loans — while around 77 billion euros worth of grants is to be allocated to Spain, and 63 billion in the form of loans.
The leaders of those two countries had led calls for a coordinated response at the EU level to offset the hugely damaging economic effects of the shutdowns, but some northern European nations have refused such moves over concerns of how the debts would be shared across member states.
The proposal comes as the head of the European Central Bank, Christine Lagarde, warned that the eurozone economy could contract between 8 and 12 percent this year due to the pandemic.
Von der Leyen insisted that due to the “huge externalities” associated with the crisis, none of the issues “can be fixed by a single country alone.”
“A struggling economy in one part of Europe weakens a strong economy in another part. This is about all of us, and it is way bigger than any one of us. This is Europe’s moment.” EFE-EPA