The EU Council ended at 5.30 a.m. this morning with a compromise agreement which every country can claim as a victory for itself. Italy, Spain and the other countries succeeded in getting that the total amount of the recovery fund—called Next Generation EU—was not reduced, consisting of EU390 billion grants and EU360 billion loans. However, in the process, the so-called “frugal” countries obtained a more intrusive control mechanism on the use of funds and large rebates in their payments to the EU budget. The condition for grants and loans is that they be used for green and digital investments and “in respect of the state of law.”
The EU recovery fund will borrow money from the markets by issuing EU bonds in the 2021-2026 period. After that date, the repayment of the bonds will go until 2058 and in order to be able to do that, the EU will introduce direct taxation.
A new direct taxation on plastic will be introduced already in 2021, however.
EU Unionists are ecstatic because the kernel of a European federal state, an independent EU budget, was born. The markets are ecstatic because they have earmarked that debt.
