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The agreement reached by european leaders after four straight days of negotiations constitutes one of the financial transactions most voluminous of european history . The EU is going to have in the next few years of almost two trillion euros to its operation and to invest in the recovery of the economic consequences of the pandemic. The agreement was notified by the president of the Council, Charles Michel, with a message on Twitter posted the five and a half in the morning of today, Tuesday.
The leaders of the Twenty-seven agreed finally on an innovative plan to borrow jointly with 750,000 million through the European Commission, which will be dedicated to rebuilding the economies most affected by the pandemic, especially those of Italy and Spain . Of this amount, the largest part, 390.000 million will be grants, while the rest of 360,000 million, will be distributed in the form of loans at very low interest. In addition, negotiations have also allowed it to pass in the same package as the budgets of the EU for the next seven years, the so-called Multiannual Financial Framework amounting to 1,074 billion euros, meaning that all of the approved package amounted to 1,82 trillion euros. To get an idea, however, the figure is equivalent to approximately one-third of the annual budget of the united States.
The agreement was closed when technically the summit had entered their fifth day. President Michel announced the deal with a tweet of a single word: “Deal!”. The president of the Commission, Ursula von der Leyen, who had proposed a plan even more ambitious, said that it was “unfortunate” that some areas of expenditure, such as the one devoted to health, have been toned down in the final agreement, but even with all be congratulated that in this case “you can’t accuse the EU of always doing too little and too late,” as in this occasion, “we negotiated a long four days and nights, over 90 hours, but it was worth it”.
One of the innovations of this financial mechanism is that the agreement includes strengthening the capacities of the European Commission to raise their own revenues, which will contribute to return this colossal credit. The package includes plans to provide to the executive community of the ability to return those to 750,000 million without affecting its own budget. A new tax to coal, which will apply to imports from polluting countries, and other activities of the large companies in the digital market, are the first clues to this. This operation of credit, undertaking the Commission considers, however, as unique and exceptional, with a planned end in December of the year 2058.
In particular, Spain will receive around 140,000 billion euros from the fund of the european recovery for the next six years, of which 72.700 million is given in direct aid , as announced by the president of the Government, Pedro Sanchez, when assessing the agreement reached today by the Council on the fund and the multiannual financial framework. Sanchez, welcomed this Tuesday for the “historic agreement” reached in Brussels-and places at the disposal of Spain, about 140,000 million. “It has cost but what we have achieved”, indicated sources of the Spanish delegation, before the president Sanchez appear visibly happy for the journalists in Brussels to give an account of the agreement
“we go in and out with 140,000 million euros,” stressed the president in reference to the initial proposal presented by the European Commission, and the final result agreed upon by the Twenty-seven.. “The effort has been strenuous but the result is successful, it has been worth it. Europe is taking a giant step forward,” noted Sanchez.
All of this must still be approved by the European Parliament, which begins tomorrow the process with a meeting of the conference of presidents of the political groups. Formally, the majority of the house asked for more money for budgets in europe, but it is unlikely that meps are willing to block the agreement reached between the countries. However, some parliaments such as the Dutch, who must ratify the endorsements that brings the country to the loans of the Commission, may refuse to approve it without a policy intervention, a strong prime minister Mark Rutte, who has been the protagonist during these four days, by his continuous claims of cuts and conditions for the disbursement of these funds.
Transfers to the “frugal”
To unlock the negotiation have been necessary four days of intense negotiations -which were nearly derailed in the early hours of Sunday to Monday – and a handful of transfers to the countries so-called “frugal” (the Netherlands, Denmark, Sweden, Austria and Finland), partners with more firmness have claimed a plan less ambitious.
To achieve the covenant has been necessary to make concessions to these countries of the North, who have managed to cut the volume of aid, to have greater control over the same and keep their discounts in the contribution to the budget. These were the most controversial of the negotiation, together with the proposal to link the receipt of funds from the budget to respect the rule of Law.
The large countries, Germany, France, Italy and Spain , as the majority of the Twenty-seven, wanted to at least 400,000 million euros in subsidies, while the frugal proposed to 350,000 million.
Finally, the commitment is closer to the first figure, but assumes a clipping 110,000 million in direct aid with regard to the 500,000 million euros proposed by the European Commission (more than 250,000 million in credits), which has been translated in reductions in the provision of various community programs supported by the fund.
The agreement reinforces in addition to the control over the granting of direct aids to meet Holland, which claimed that countries could veto the plans of reforms and investments of their partners, while the European Commission posed that pronunciasen only at a technical level.
Plans are under voting
The countries submitted their plans to the Commission, and these will have to be approved also by a qualified majority of eu member states. Later, at the time of authorizing the disbursement of each tranche of aid, if a country or several you have any questions, will be able to raise the issue at a summit of leaders , so that the payment is stopped until it has been addressed.
on the other hand, increase the discounts that have the frugal in its contribution to the budget by providing more of what you receive , while Germany simply holding (3.671 million euros per year). The Netherlands will be of 1.921 million euros, compared to 1.576 million in the initial proposal, the Danish will go from 197 to 377 million, the Austrian 237 565 million and, in Sweden, from 798 to 1.069 million.
in Addition, it introduces for the first time the conditionality linked to the rule of Law , of the concerns in Hungary and Poland, as well as the goal that 30% of the budget spending and the recovery fund to support climate goals.