On 27 May, the European Commission proposed a revamped long-term EU budget, boosted by an emergency temporary recovery instrument called Next Generation EU. The stated objective is to help repair the immediate economic and social damage brought by the coronavirus pandemic, kickstart the recovery and prepare for a better future for the next generation. This budget responds to the European Council’s request (made in March) that the European Commission develop a comprehensive recovery plan. The proposed recovery plan is subject to approval by the EU Council and Parliament.
The amount of €750 billion for the emergency temporary recovery instrument, Next Generation EU, will be raised by temporarily lifting the ceiling on borrowing (the own resources ceiling) to allow the European Commission to use its strong credit rating to borrow money on the financial markets. This will be combined with targeted reinforcements to the long-term EU budget for 2021-2027. This will bring the total financial firepower of the EU budget to €1.85 trillion.
The money raised for Next Generation EU will be channelled through EU programmes in the revamped long-term EU budget. The money will be invested across three pillars:
The European Commission makes clear that there are three policy fundamentals of the recovery:
Source: European Commission, EU long-term budget 2021-2027: Commission Proposal May 2020 (27 May 2020)
“The crisis we have to tackle is enormous. But it is also a huge opportunity for Europe. And it is a huge responsibility for us to do the right thing in this defining moment. We can now lay the cornerstone for a Union which is climate neutral, digital and more resilient than ever before. Seventy years ago our founding fathers and mothers took the first courageous step to create a Union of peace and prosperity. Today is the time to write our generation’s chapter to the story and take another courageous step towards a stronger Union. We owe it to future generations.”
European Commission President Ursula von der Leyen, Speech by President von der Leyen at the European Parliament Plenary on the EU Recovery package (27 May 2020)
If you are making the case for a greener, fairer and more inclusive recovery in your organisation (or simply trying to explain the importance of build back better to a family member!), this piece we put together with Anna Turrell might help: A sustainable post COVID-19 economic recovery: how the facts show us there is no other option
Source: Anna Triponel and Anna Turrell, A sustainable post COVID-19 economic recovery: how the facts show us there is no other option (Medium, 28 May 2020)