According to the Vietnam News Agency correspondent in Brussels, at European Union online summit (EU) June 19, leaders of EU countries have not reached a quick agreement on long-term budget in the future together. Post-pandemic recovery plan Acute respiratory infection COVID-19 worth billions of euros in the context of the economy of the Old Continent being seriously affected by the impact of COVID-19.
However, the leaders of EU countries agreed to take prompt action although there are still many disagreements about the post-pandemic recovery plan as well as on EU long-term budget.
Therefore, European Council President Charles Michel said he would plan to convene a direct EU summit in mid-July.
[Đức có thể làm gì để vượt qua đại dịch, tái thiết nền kinh tế EU?]
The June 19 EU summit is the first step in the intense discussion process of the proposed European Commission (EC) plans related to the union’s 2021-2027 budget of 1,100 billion euros. and COVID-19 pandemic restoration fund worth 750 billion euros.
The aforementioned budget package is for a giant stimulus program with 1,850 billion euros for the struggling economies.
Designed to help member states minimize the impact of the COVID-19 pandemic, the recovery fund has not been unanimously accepted and will need more time to reach an agreement, possibly at the Conference. EU direct summit in July.
The EC plan, backed by Germany and France, suggests that the recovery fund must be integrated into the EU budget for the period 2021-2027. Of which, two-thirds of the fund, ie 500 billion euros, will be financed through sponsorship. While the remainder are loans based on conditions that countries can apply.
However, countries including the Netherlands, Denmark, Austria and Sweden think that aid cannot be easily granted to members and that the funds must be repaid in the future.
Under the EC project, countries applying for assistance will have to outline the financial goals and reform plans that will be implemented to ensure their economies better adapt in the future.
As such, France and Germany, along with their allies, need to convince countries to oppose debt interaction or increase the EU budget that grants will benefit the whole bloc.
Another divisive topic is the distribution of money. The EC proposes an allocation method based on criteria including population size, per capita gross domestic product and unemployment rate.
A senior EU diplomat said ahead of the conference that the criteria above were too restrictive and needed to be adjusted to identify the true damage of the COVID-19 pandemic.
Regarding funding for the plan, the EC proposed borrowing money from the financial markets. EC with AAA credit rating, will make borrowing more profitable. The repayment will not start before 2028, and the entire maturity is after 30 years.
To facilitate repayment, some member states are promoting the rapid development of new EU funding sources, possibly in the form of taxes on single-use carbon or plastic.
Such revenues will make the EU budget less dependent on contributions from member states, who do not want to pay more.
In a related development, ECB President Christine Lagarde issued a call for leaders of EU member states to quickly agree on an economic recovery package to revive the economy. are seriously affected and facing the risk of losing investors in the market.
ECB President emphasized that EU economy is in sharp decline, therefore, both governments and EU organizations need to take decisive and effective actions to pave the way for recovery later this year. and increase purchasing power.
Ms. Lagarde warned that the failure of countries to agree quickly on the economic recovery package may cause anxiety for investors, leading to psychological changes that are not beneficial to countries.
Ms. Lagarde reiterated the ECB’s prediction that the Eurozone economy will decline by 13% in the second quarter of 2020 compared to the previous quarter and down 8.7% in the whole of 2020 before growth. back to 5.2% in 2021.
ECB President said the COVID-19 epidemic will still have a serious impact on the labor market and the current unemployment rate at 7.3% may be up to 10%, especially affecting the young labor force. .
Therefore, Ms. Lagarde said that the recovery package should be dynamic, general and focus on economic reform. She emphasized that EU leaders need to agree as soon as possible on this recovery package, the better for the EU economy.
Europe is the region most heavily affected by the COVID-19 epidemic, with over 190,000 deaths in nearly 2.5 million cases.
Many European countries have reopened this month after blockade measures, despite helping to effectively prevent the spread of the disease, have left heavy losses to economies.
The EU now faces the biggest recession in 63 years, and countries are under pressure to find ways to revive the economy of the union./.