The EU plans a record-breaking new stimulus package of $826 billion to soothe Europes economic pain from the coronavirus
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The European Commission proposed a 750 billion euro ($826 billion) stimulus package on Wednesday to help the EU recover from a deeply entrenched recession brought on by the coronavirus.
Paolo Gentiloni, the European Commissioner for the Economy, described the stimulus package as a “European turning point to face an unprecedented crisis.”
The package will be the biggest in European history, far outstripping the post-World War II Marshall Plan.
The European institution aims to fund its recovery plan by raising unprecedented sums on the financial markets, and through a bevy of EU levies and taxes on a range of industries over the coming decades.
The euro gained 0.4% on the EU’s recovery plan and stood at $1.10 in European trading.
The European Commission unveiled a planned deployment of 750 billion euros ($826 billion) on Wednesday as part of its new long-term budget and recovery plan.
The European Union executive arm’s groundbreaking push to aid the economic recovery of Europe against the coronavirus crisis will be funded by raising funds from financial markets.
Out of the total package – called the “Next Generation” fund – 560 billion euros ($617 billion) will be offered in the form of free grants to the bloc’s member states, while 250 billion euros ($275 billion) will be made available as loans to repair the single market from the economic blow of the coronavirus.
The EU’s “Next Generation” recovery fund, which is at the heart of Europe’s recovery plan, is part of the institution’s long-term budget for 2021-27 set at 1.8 trillion euros ($2 trillion).
Paolo Gentiloni, the European Commissioner for Economy, said in a tweet: “Commission proposes a 750 billion Recovery Fund which is added to the common instruments already launched. A European turning point to face an unprecedented crisis.”
Germany’s DAX rose 1.9% in European trading, and the pan-continental Euro Stoxx 50 rose 2.2%.
The euro gained 0.4% on the news and stood at $1.10 as of 11.40 a.m. in London.
The commission said it would wield its strong credit rating to employ “every available euro” in the EU budget to support its healthcare sector, workers and businesses, and save jobs by mobilizing finance from the markets.
“This is Europe’s moment. Our willingness to act must live up to the challenges we are all facing. With Next Generation EU we are providing an ambitious answer,” European Commission President Ursula von der Leyen said in a statement.
The additional funding will be raised by temporarily lifting the ceiling on own resources to 2% of EU Gross National Income. The commission said this would be repaid throughout future EU budgets over a span of 30 years, between 2028 and 2058.
The institution is also proposing an array of new EU taxes and levies on a realm of industries ranging from tech giants to single-use plastics to repay the expected debt burden, and eventually raising billions of euros a year, according to the Financial Times.