Coronavirus has deeply impacted the economies of the nations in Europe and some member nations still do not have the rapid spread of the virus under control. This has led to a meeting of the 27 nations in the European Union (E.U.) to meet for four days of talks in Brussels. The meeting concluded with an agreement to spend a total of €1.82 trillion ($2 trillion) for a recovery package.
The agreement was reached unanimously on the fifth day of the summit. It did not happen, though, until 5:30 a.m. The money for the new Multiannual Financial Framework (MFF) is broken down into three segments. €390 billion of the package consists of grants; another €360 billion will be in the form of loans, and €1.074 trillion will be distributed in a seven-year budget.
The grants are going to be given to the states that have suffered the most economically. Originally, the grants were set at 500 billion euros, but this was deemed too high by some of the more frugal leaders and was later reduced to €390 billion.
The meeting was headed by the European Council President Charles Michel. Negotiations almost completely broke down on the fourth day but Michel reduced the total in grants and it enabled a unanimous agreement to be made.
Some of the problems that stood in the way were their differences in how the loans and grants were to be divided among the nations. Other factors included how to oversee the dispersal of the money and how to use it to bring change to the democratic practices in the nations receiving the money. Hungary and Poland threatened to veto the agreement if the money was tied to requiring changes in the “rule of law” – democratic principles.
Before being given the money, each nation will need to develop its strategy as to how they will use the funds. Their plans will have to be submitted to the European Union and they will need to be approved by the majority of members.
One of the biggest issues that member nations face in the future concerning the use of some of the funds concerns the climate. As much as 30% of the money in the economic package is tied to this issue. All of the member nations, except Poland, have agreed to be rid of dependence on coal by 2050. At that time, the goal is to have a zero-carbon economy in all member nations. Billions of more euros could also be given to member nations working toward that goal.
One of the reasons the total amount of money needed to be reduced was because Britain is no longer part of the European Union. Britain contributed a lot of money to the Union each year before Brexit. Britain will not be receiving any money from the package.
President Charles Michel believes that this fund and the willingness of member nations to help each other will strengthen the Union. The money, he said, will almost double the amount of funds the Union will have for the next seven years.
This meeting of the E.U. revealed that the leaders of more nations are having a greater influence than before. Instead of just one or two leaders controlling the meeting, some new leaders, Angela Merkel (Chancellor of Germany) said, also had a larger impact on the meeting and the results.