In order to arrive at this amount of financial resources, the European Commission proposed to temporarily lift the EU’s financial resources from about 1% to up to 2% of the EU gross national income (GNI) by borrowing, on behalf of all Member States, a total of €750 billion on the financial markets, taking advantage of its strong credit rating. 

The European Commission would thus issue bonds on behalf of the EU and the €750 billion be deployed under the MFF into a new flagship ‘Next Generation EU’ programme, designed specifically to help citizens and Member States alleviate the socio-economic COVID-19-fallout that they face.  

Resources under the ‘Next Generation EU’ programme would be accessible to the Member States in part in the form of grants and in part in loans. It would consist of three pillars, focussing on: 

• “support to Member States with investments and reforms
• kick-starting the EU economy by incentivising private investments
• addressing the lessons of the crisis, by strengthening our health systems and improving crisis management and preparedness” 

In addition (in order to make funds available as soon as possible to respond to the most pressing needs), the European Commission proposed to amend the current MFF 2014-2020 to make an additional €11.5 billion in funding available already in 2020. 

In a first reaction, CESI Secretary General Klaus Heeger commented: “The package proposed today by the European Commission is a strong and determined signal of solidarity – between those who have and those who do not, between the strong and the vulnerable. Even if it may still not be enough, this proposal, if adopted, would be a major contribution by the EU help Member States alleviate the far-reaching socio-economic impacts and to pave the way for more that is social, digital and green policies. Altogether, a real vision for the EU is presented, embedded in solidarity.””

CESI Vice-President Roberto di Maulo from the Italian Confsal added: “The Next Generation EU is an instrument drafted for the future, for the young generation. The EU taking bonds on behalf of the community is a first. Only by staying united can we build social, digital, resilient and innovative societies and economies and re-emerge stronger together.  Solidarity and, where needed, smart and sustainable structural reforms will get us through this crisis. The Italian system will now have to be able to launch those structural reforms that have been on hold for far too long making our country fall back and not very competitive.”

CESI Vice-President Javier Jordán de Urries Sagarna from the Spanish CSIF stressed: “I welcome the the European Commission’s proposal and stress the need for a social dimension at its centre. Workers, many of those in the public sector, have kept public services running and functioning and those in the front line have been the true heroes in fighting COVID-19, but they have also paid high prices. Help and alleviation for them must have priority, and significant investments must be channelled into the public services to make the more performing and prepared for crises.”

CESI President Romain Wolff concluded: “What the European Commission put on the table today is a compromise between the Merkel-Macron call for a €500 billion programme in the form of grants and a proposal of the Frugal Four Group of Austria, the Netherlands, Denmark and Sweden, which had pressured for loans only – to be paid back. Importantly, the European Commission also increased the sum to €750 billion – significantly more than Merkel and Macron had had in mind. In sum, I hope that the European Commission’s proposal has a real prospect to find the backing of all Member States. All have to be aware that Europe has always been about compromise, that nobody can get it all. And in the end, it is about the future of the EU, it is about the future of the next generation, it is about the future of us all!””

More information on the Recovery Plan and new MFF