BRUSSELS (Reuters) – EU leaders signed a deal on Tuesday on a package of measures to boost their economies after the coronovirus epidemic, spending hundreds of billions of euros over the next few years and paying them back with new taxes Agreed to.
European Council President Charles Michel, Dutch Prime Minister Mark Rutte, French President Emmanuel Macron and Spanish Prime Minister Pedro Sánchez in Brussels, Belgium for the first time during the EU summit after the outbreak of coronovirus disease (COVID-19) Speak to , 2020. John Thies / Pool via REYSS
1. The key to this agreement is a new element in EU policy making: the European Commission will borrow extensively on the market and then give it much cash instead of lending it to countries in need of economic stimulus.
EU leaders agreed that the commission would borrow 750 billion euros cheaply using its triple-A rating. Out of that, it will disburse 390 billion grants and 360 billion cheap loans.
2. The grant obligates the force to generate cash to repay the borrowings by 2058. The leaders agreed:
– Germany, Sweden and the Netherlands will lose their current exemption on the amount of VAT passed to the European Union.
– European Union countries will impose a tax on non-recycled plastics and pass on income to the EU treasury.
– From 2023, countries with low carbon emission standards will be taxed on goods imported into the European Union.
– A tax on financial transactions is another option as some money is being received from the emission trading system to the marine and aviation sectors.
Such new taxes will be explicitly allocated to repay 750 billion of borrowings, but they will become part of the reality of the European Union for the next 38 years.
3. Grants will be disbursed to countries that submit plans to strengthen their growth potential, employment generation and economic and social resilience of their economies. The plans also have to make the economies greener and more digital and be in line with the annual recommendations of the Commission.
Disbursements will require the approval of a qualified majority of EU governments and will be added to meet milestones and targets. If the EU government believes that such goals have not been met, it may ask EU leaders to debate it within three months.
The money will also be linked to observing the rule of law – an issue for Poland and Hungary which are under the European Union’s Law of Inquiry Act. But there will be a lot of political avenues: if the Commission decides that “there are generalized deficiencies in the good governance of member state officials as respect for the rule of law”, it can propose measures that would have to garner support from governments. A qualified majority.
4. In order to secure its support for the recovery plan, net contributors to the EU budget, such as the Netherlands, Sweden, Austria, Denmark, and Germany, contribute more than before to contribute each year on the basis of the EU treasury There will be deep relaxation. The size of their economies.
Reporting by Jan Stroopjewski, editing by Robin Emmott