In a speech to the European Parliament on Wednesday 13 May, the president of
the European Commission, shared the plans for EU’s next long term budget and
the main features of the recovery plan for Europe with a focus on green,
digital and support to those hardest hits by the crisis.
In addition to the long-term budget, the Commission proposes a specific recovery instrument which will be short term and mainly directed towards those areas in the European Union most affected by the crisis. It is expected to include both grants and investment schemes, with cheap up-front loans for member states. Rather than being funded by EU member states shares, the recovery plan will be funded by borrowing of money on the market, using the member states solvency as guarantee.
The entire amount of the recovery instrument will be channeled through EU programmes as part of the next long-term budget.
Money will be channelled through three already existing instruments:
A top up of cohesion funding (ERDF, ESF, cohesion fund) called ‘recovery and resilience tool’, meant to support the transition towards a climate-neutral and a digitalised and resilient Europe, for those areas most heavily affected by the crisis and its socio-economic impact;
The strengthening of the current InvestEU facility, which will provide loans and solvency for companies and help invest in key value chains, such as the pharmaceutical sector;
The strengthening of funding programmes, such as Horizon Europe and a new Health Programme which proved key during to crisis in quickly mobilise help.
This recovery instrument will complement the support already approved such as SURE, the possibility for loans under the European Stability Mechanism and the support to companies and health sector agreed under the European investment Bank.
The EU budget proposal is expected to be published on 20 May and will include the proposed total size of the EU budget.