A huge stimulus package to kick-start the EU economy once the coronavirus pandemic ends is likely to feature a mix of loans and grants and be underpinned by private sector investments.It is being drafted by the European Commission for review by the bloc’s leaders by around mid-May.
Below is a rough outline of the blueprint, compiled from public remarks by Commission head Ursula von der Leyen and Budget Commissioner Johannes Hahn, and an internal Commission note seen by Reuters.
HOW MUCH?
Von der Leyen said the plan would produce at least 1 trillion euros ($1.08 trillion) of support. She also said the scheme could last up to three years, suggesting the sum could be significantly higher. The Commission note had 2 trillion pencilled in brackets - a sign it might change.
WHERE WOULD IT COME FROM?
Some would be cash, but most would be leveraged, along the lines of a flagship EU investment scheme used over the last five years.
The EU would use a small amount of its own money to finance the riskiest part of an investment. This would be the first tranche of bear any losses, leaving the safer, larger parts to private capital.
WHEN WOULD IT START?
The recovery plan would start when the next long-term EU budget starts, on Jan 1, 2021, providing there is agreement on the fiscal plan by then, which is not a given.
SOMETHING FOR RIGHT NOW?
Some leaders asked the Commission for ideas on how some recovery money could be made available already now and he EU executive is considering “bridging solutions”.
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