We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.

The European Commission President has discussed her blueprint for the bloc’s recovery with other EU presidents and prime ministers. In discussions with more than 20 leaders over the weekend, the German set out a proposed “landing zone” for the size of a recovery fund that could amount to as much as €2 trillion. Early drafts of the recovery fund suggested the Commission would borrow around €320 billion to fund the rebuild.

But officials now claim the figure is “considerably larger” than previous versions of the blueprint.

The majority of the funding is expected to be distributed to the worst-hit member states in the form of grants rather than loans.

“This is a completely new construction that we are setting up – it is of enormous importance,” Mrs von der Leyen told the Financial Times.

“Before the last European Council meeting in April, when we were tasked with this, there was nothing out there that provided an answer, taking into account all the opposing views.”

Southern capitals have pushed for the EU to collect vast sums of cash so that the eurocrats can redistribute it to pandemic-stricken economies.

But northern capitals have expressed concerns over the size of the package and the conditions attached to the distribution of funds.

Europe is facing its worst recession in 90 years.

Under Mrs von der Leyen’s plans, the Commission would be allowed to issue hundreds of billions of euros of debt to feed the recovery fund.

The German is planning on using the bloc’s seven-year budget as the vehicle for distributing cash to rebuild European economies.

She said: “We realised we need a united principle – and the only instrument that is out there that is trusted, established and proven is the MFF.

“The recovery fund discussed at the time was contested – some wanted it and another part did not want it at all. And for me the main worry was we had no MFF yet.”

MUST READ: Italians’ bid to leave the EU surges as voters ‘change mind on Europe’

Member states will be made to provide the Commission with guarantees to allow hundreds of billions of euros on the open market.

Cash will then be sent out to capitals in the form of loans and grants to encourage investment in projects and businesses.

But before the plan can be rolled out, Mrs von der Leyen will first have to secure the permission of European leaders.

DON’T MISS
EU crisis intensifies as Italian MEP exposes Brussels plot [VIDEO]
EU crisis: Brussels risks economic future as ‘every country for itself [FORECAST]
Brussel’s masterplan to ‘complete monetary union’ revealed [INSIGHT]

They will have to decide on the exact terms and rules governing how the money is distributed, including potential conditions that could be attached to the new EU grants.

The European Parliament must also grant permission for the Commission’s plans before they can be implemented.

German Chancellor Angela Merkel and French President Emmanuel Macron are understood to be supportive of the Commission’s blueprint.

Mrs Merkel has signalled she is prepared to increase Berlin’s contributions to the EU’s joint coronavirus response.

Source: Read Full Article