Nearly €1 billion in EU COVID-19 recovery funds proposed for Malta

At least 500 billion euros will be new cash intended to help Europe's nations

In May 2020, the Commission has proposed a powerful, modern and revamped long-term EU budget boosted by Next Generation EU, an emergency temporary recovery instrument, to help fix the immediate economic and social damage brought by the coronavirus pandemic, kickstart the recovery and prepare for a better future for the next generation.

The new budget period begins on January 1, 2021.

This unprecedented money raising effort is about a collective responsibility as President Ursula von der Leyen sees it.

The commission proposed that €500bn from the package be distributed in the form of grants to member states and €250bn in loans.

Simson, the Estonian member of the European Commission, said in a press release that the recovery plan is extensive enough to provide a real impetus for the economy and specific enough to move towards a greener, more digital and more resilient economy.

The EU governing body aims to tie the proposed aid package to the next seven-year EU budget.

It also involves 94.4 billion euro for Horizon Europe, which will be reinforced to fund vital research in health, resilience and the green and digital transitions.

Tellingly, the plan is presented as being targeted not only at propping up EU states, but also EU "sectors", implying that grants may be used to subsidise European industrial sectors, something which could unleash trade tensions between countries.

Southern Mediterranean countries such as Portugal, Spain, Greece and Italy have all indicated initial support.

But for countries like Netherlands, Sweden, Austria or Denmark, such grants are a concern as these loans will be financed by joint borrowing.

Financial burden-sharing has already been a toxic issue during the euro crisis a decade ago and threatened the cohesion of the bloc.

Von der Leyen will then devote the next weeks and months to tough negotiations along with the EU Council head Charles Michel, who chairs EU summits.

A key moment was German chancellor Angela Merkel's support for an initiative with French president Emmanuel Macron to back a recovery fund to the tunes of €500bn, and large borrowing by the commission.

The European Parliament will also be fully involved as co-legislator on the EU budget and "will, therefore, have a say on the whole of the expenditure", another official added.

"The "do no harm" principle is very much also applying to this recovery instrument", said a senior European Union official who briefed journalists on Tuesday, ahead of the plan's publication.

"No member state should have to choose between responding to the crisis or investing in our people", the German commission president added. "It's hard to imagine this proposal will be the end state of those negotiations", they added.

Dutch prime minster Mark Rutte on Wednesday said he talked to Italian PM Giuseppe Conte about Italian reform plans. In no way will the intention to return to our usual Schengen, removing the current restrictions on our internal borders, be replaced by a kind of regional mini Schengens that fragment our single market and discriminate against non-participating member states.

Commenting on the proposals Iberdrola chief executive Ignacio Galan said: "Iberdrola supports the strategy for a rapid and sustainable recovery based on the European Green Deal". "Now let's speed up the negotiation and free up resources soon", he wrote.



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