However, there are four European countries that still broadly oppose issuing grants as a way to mitigate the economic fallout from the Covid-19 crisis, preferring instead loans that will be repaid. Austria, the Netherlands, Sweden and Denmark also want strong economic reform commitments in return for any financial help.
By including a component of grants and loans, the Commission is seeking to bridge these differences among the 27 EU countries.
A Dutch official, who didn’t want to be named due to the sensitivity of the negotiations, told CNBC Wednesday that “the 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.”
Wednesday’s proposal kicks off a discussion among the 27 EU member states. The leaders will meet, likely via video call, on June 18 in the hope of finding a consensus over the exact details of the recovery fund.
The European Parliament, the only directly-elected EU institution, will also have to approve any new financial aid as well.
In the meantime, there are other short-term measures available across Europe. The European Central Bank is buying government bonds as part of its 750 billion euro program and there are 540 billion euros available in unemployment schemes, business investments and loans to governments.
Source Article from https://www.cnbc.com/2020/05/27/eu-unveils-plan-to-borrow-750-billion-euros-to-aid-coronavirus-recovery.html
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