We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
France, the EU’s second wealthiest country, Italy and Spain will be the big winners when the European Commission distributions around €500 billion in non-repayable grants to pandemic-stricken regions and economies. Mrs von der Leyen, the EU Commission President, yesterday unveiled her new tax and spend blueprint for the bloc, which will see national contributions to the bloc’s budget increase as well as new levies for big business. The money will be borrowed on international markets with member states taking up the liabilities as part of the bloc’s next seven-year budget.
Under the German’s plans, Italy would get €81.8 billion, Spain would get €77.3 billion, and France would get the third largest share of the pot with €38.8 billion.
Whereas the likes of Lithuania and Malta, who are both ranked in the lower half of EU economies, will receive less than €1 billion in non-repayable handouts from Brussels.
Hungary, a much poorer economy than the likes of France and Italy, is set to receive just €8.1 billion because it was avoided the worst of the pandemic.
Other countries less badly hit by coronavirus will also come off worse.
Germany would receive €28.8 billion in grants, but would be forced to share around €135 billion of the debt.
The Netherlands would take on around €30 billion of the debt and only receive €6.6 billion back in grants.
Central and eastern European leaders are said to be unhappy with vast transfers of wealths to the bloc’s most prosperous countries.
The proposal requires unanimous support from EU27 leaders before it can be implemented, and they are expected to battle over the plans at a European Council summit in mid-June.
An EU diplomat said: “By moving to the South and the East the Commission has avoided any difficult decisions or compromises at this stage.
“As a result, the leaders will have been set back significantly in their efforts to reach an acceptable compromise fast.”
Hungarian MEP Eniko Gyori said the plan would lead to a “moral hazard” by encouraging countries to rack up huge bills.
She said: “It cannot happen that poorer member states finance the wealthier ones.”
MUST READ: EU hasn’t done enough to help during coronavirus pandemic – shock poll
The plan is also opposed by the Dutch, Swedish, Danish and Austrian governments.
The so-called “Frugal Four” have asked for grants to be linked to the implementation of austerity politics for their recipients.
A Dutch diplomat said: “he positions are far apart and this is a unanimity file; so negotiations will take time.
“It’s difficult to imagine this proposal will be the end-state of those negotiations.”
France and Germany, who released a similar joint proposal, have voiced support for the Commission’s blueprint.
Von der Leyen’s €750 billion bailout fund already risks being rejected [INSIGHT]
Manfred Weber lashes out at frugal four as EU row erupts over funding [VIDEO]
EU civil war: Brussels chief in major swipe against colleague [VIDEO]
Announcing her proposals yesterday, Mrs von der Leyen begged European capitals to put their “prejudices” aside and back the plan.
“The crisis can’t be fixed by any country alone. This is Europe’s moment,” she told the European Parliament.
“Let’s us put aside the old prejudices.”
Source: Read Full Article