The FINANCIAL — From the early days of the pandemic, as the EU took immediate measures to tackle the crisis, it was clear that the recovery would require a joint effort at EU level. EU leaders decided to work towards establishing a recovery fund. Yesterday they agreed on the €750 billion recovery package to help the EU tackle the crisis caused by the pandemic. President of Georgia welcomed recovery package and called this agreement historic decision.
EU leaders have struck a deal on a huge post-coronavirus recovery package following a fourth night of talks. The talks saw a split between nations hardest hit by the virus and so-called “frugal” members concerned about costs. It is the biggest joint borrowing ever agreed by the EU. Summit chairman Charles Michel said it was a “pivotal moment” for Europe, BBC reported.
Georgian President Salome Zurabishvili has welcomed EU leaders’ agreement on a post-coronavirus recovery package, involving €750bn (£677bn; $859bn) in grants and loans to counter the impact of the pandemic in the 27-member bloc. Zurabishvili says that the agreement, which came on the fourth night of talks yesterday, has once again demonstrated the EU’s unanimity and ‘is a signal of hope’ for countries like Georgia who aspire to EU membership, local media agenda.ge wrote.
“A historic day for Europe! Through the EU Stimulus, the European Union has shown once again that through discussions, compromise and togetherness, it can make bold steps to help the lives of hundreds of millions of people. My sincere congratulations to EU leaders on this act of solidarity,” President of Georgia wrote on Twitter.
Also, the President of Georgia Salome Zurabishvili sent a letter to the President of the European Commission, Ursula von der Leyen, calling the unanimous agreement on the stimulus package to help the EU tackle the crisis caused by the pandemic a historic decision.
Alongside the recovery fund, EU leaders have agreed on the long-term EU budget for 2021-2027, which will be worth €1074 billion. Among others, the budget will support investment in digital and green transitions.
The plan ensures the money goes to the countries and sectors most affected by the crisis: 70% under the grants of the Recovery and Resilience Facility will be committed in 2021 and 2022 and 30% will be committed in 2023. Allocations from the RRF in 2021-2022 will be established according to the Commission’s allocation criteria taking into account member states’ respective living standards, size and unemployment levels. For 2023 allocations, the unemployment criterion will be replaced by the drop in GDP in 2020 and 2021
The COVID-19 crisis presents Europe with a challenge of historic proportions. The EU and its Member States have had to adopt emergency measures to preserve the health of the citizens and prevent a collapse of the economy. We are slowly exiting the acute health crisis. While utmost vigilance is still required on the sanitary situation, the emphasis is now shifting to mitigating the socio-economic damage.
The socio-economic fallout from the COVID-19 crisis requires a joint and innovative effort at EU level in order to support the recovery and resilience of the member states’ economies. To achieve the desired result and be sustainable, the recovery effort should be linked to the traditional MFF, which has shaped EU budgetary policies since 1988 and offers a long-term perspective.
In line with the principles of good governance, member states will prepare national recovery and resilience plans for 2021-2023. These will need to be consistent with the country-specific recommendations and contribute to green and digital transitions. More specifically, the plans are required to boost growth and jobs and reinforce the “economic and social resilience” of EU countries. The plans will be reviewed in 2022. The assessment of these plans will be approved by the Council by a qualified majority vote on a proposal by the Commission.
The disbursement of grants will take place only if the agreed milestones and targets set out in the recovery and resilience plans are fulfilled. If, exceptionally, one or more member states consider that there are serious deviations from the satisfactory fulfillment of the relevant milestones and targets, they may request that the President of the European Council refer the matter to the next European Council.
To tackle the economic fallout of the coronavirus pandemic, the EU put in place immediate measures to mobilise the EU budget and enable maximum flexibility in the application of budget and state aid rules. On 9 April 2020, the Eurogroup put forward a €540 billion emergency support package for jobs and workers, businesses and member states.
On 23 April 2020, EU leaders, members of the European Council, decided to work towards establishing a recovery fund. They tasked the European Commission to urgently come up with a proposal, which would also clarify the link between the fund and the EU’s long term budget.