EU requires €750 billion to recover from pandemic
According to the European Commission, the EU countries are ready to issue government bonds and securities in the capital market in the next five years. This initiative will be implemented as soon as the members of the EU parliament ratify the corresponding law. The European Commission plans to borrow around €150 billion annually to finance the bloc’s recovery fund aimed at supporting the economy hit by the COVID-19 crisis. According to Reuters citing a document from the European Commission, this will make the EU Commission the biggest issuer of bonds denominated in euro. The plan proposed by the European Commission implies the issuance of bonds and securities until 2026. The repayment of the borrowing is supposed to come from the EU budget. The total amount of the EU recovery fund is €750 billion. The funds will help member states that have suffered from the coronavirus crisis the most to address the economic impact of the pandemic. In particular, Italy and Spain are among such countries. The borrowing will start right after the ratification of the law by all 27 EU national parliaments. Earlier, the German parliament and the head of the country supported the plan of the European Commission to borrow funds to finance the EU recovery plan. However, this initiative faced resistance from the German Constitutional Court that blocked the country’s president from ratifying the post-pandemic recovery fund.