Not Italy and Spain - the right of EU money rain falls on other countries

What the EU has decided, exactly? The heads of state of the 27 member States of the European Union adopted two important decisions: first, the EU takes up for

Not Italy and Spain - the right of EU money rain falls on other countries
What the EU has decided, exactly?

The heads of state of the 27 member States of the European Union adopted two important decisions: first, the EU takes up for the first time in its history, of its own debt for a building Fund called "Next Generation EU". 750 billion euros should be about bonds, which are in turn distributed to 2024 in the member States. 390 billion euros of which are paid, the remaining funds must be repaid by the member States no later than 2058.

Secondly, the EU has decided to budget up to 2027. He replaces the 2014 current budget. The volume is increased only slightly, from 951 to about 1074 billion euros. Usually, however, this is only the maximum limit of what the EU can spend. The actual expenses are usually a little lower. In the last financial plan, about 51 billion euros were saved.

How will be financed the building Fund?

First of all, the EU takes the money for the building Fund independently on the financial market. Since these bonds must be repaid, it increases the contribution of the each member annually, temporarily, from 1.4 to 2.0 per cent of gross national income (GNI). The BNP is the equivalent of the gross domestic product, and is limited to the residents ' Goods and services produced. In General, it deviates only very slightly from the GDP.

The increase in the contributions is used to illustrate the liquidity of the EU and thus favorable conditions for the bond act. This is particularly beneficial for EU countries, which could be the fault of the operator only to high interest rates, so such as Italy or Greece.

Each country pays according to its economic power the same. The contributions to the building Fund will be around 5.4 percent of GDP.

The loan from the building Fund to pay back the recipient countries through their higher budget contributions no later than 2058.

What is the money spent?

tied to the funds of The building Fund will not be distributed easily to the respective governments, but are in the EU budget for the purpose. The majority – 560 billion euros – is earmarked for the building of a better resistance to crises in the respective recipient countries. The EU Plan is vague, what exactly does this mean, suggests, however, that reforms that improve the health and social system, research, digitization, and the "green transition" to renewable energy sources.

for a country To actually retrieve the money from the building Fund, it must send a corresponding reform plan to Brussels. The is checked and then the appropriate aid approved. There is a maximum rate that can retrieve a country per year from the Fund, as well as a maximum rate for each country until 2024.

Who gets the most money from the aid package?

The reconstruction Fund as of the EU-Commission proposed a volume of 750 billion euros. The actual amount is even greater, because the amount is indicated in prices of 2018, and each year is being inflated with two percent.

390 billion euros as grants and do not have to be repaid. 70 percent of the funds are to be paid off in 2021 and 2022, according to the EU Commission's proposed distribution key. The remaining 30 percent will be paid by the end of 2023. For 2023, the distribution key is changed to the extent that the unemployment criterion unemployment from 2015 to 2019 – replaced by the decline in the real gross domestic product in 2020 and the cumulative loss by 2020, and 2021. C. dead-man C. bag man

The rest of the 360 billion euros are awarded as loans. The credit limit amounts to 6.8 percent of gross national income of each country.

The Numbers make it clear: Even if Spain and Italy will receive in absolute Numbers, the most money, are the true winners are the countries from Eastern and South-Eastern Europe. The get in Relation to their economic power, most of the grants. The least force in Ireland, Denmark and Germany in Relation to their economy.

Little differently it looks, if you look at the overall distribution of the aid package, i.e. the sum of grants and loans. Accordingly, the Corona in the most affected countries, Italy and Spain would receive the most funds. You may access up to 2024 to a maximum of 153 or 149,3 billion euros. Germany is number 5 on the list of recipients and gets 51.8 billion euros. Luxembourg is the only country, which is completely empty. C. blind man

in terms of economic strength in Italy and Spain, however, only in the midfield of the recipient countries. Here Croatia leads. The country on the Adriatic sea gets up to 2024, for a maximum of 28 percent of its GDP from the construction Fund. Behind Bulgaria (24.7%), Greece (23.2 percent) and Latvia (22.3 percent) are. C. blind man

And who pays for it?

Relative to the economic strength of the Deposit in the construction Fund, as I said, for all countries the same. This means of course that Germany paid as a economy of the strongest country in the EU to most.

This will not change even if we consider the net payments, i.e. the payments from the construction Fund to the countries remove. Germany still leads with 133,3 billion euros by 2024, ahead of France (52.3 billion euros), the Netherlands (30.9 billion Euro) and Sweden (16.6 billion Euro).

On the other hand, Spain gets paid with 82.2 billion, the most money net. It Italy (56.7 billion euros), Poland (36 billion euros), Greece (EUR 33.4 billion) and Romania (21.4 billion euros) will follow.

Relative to the GDP in the same countries as in the previous question, the front and rear (see graphic), because the relative deposits are the same for all.

"Germany, the view to the South" is missing: the International press on EU special summit to FOCUS Online/Wochit "Germany, the view to the South" is missing: the International press on EU special summit to be

carved these Figures in stone?

no, the agreement reached at the EU summit is not yet legally binding. For this, all national parliaments have to agree to the Plan. The aim of the EU is the establishment of the Fund on 1. To start January 2021. However, it is not expected that a country refuses to Plan. Finally, all the heads of government who negotiated it have the requisite majority in their Parliament.

Are the enormous debt that we are saddled with since?

The sum of 750 billion euros-sounds huge, and at first glance, perhaps even irresponsible, to high. However, the EU did not invent this amount is simply an arbitrary, but well-calculated.

The Intention is that this sum is not sufficient, the economic growth of the EU-to stimulate wide-so wide, that it is up to 2024, and again to 2.3 percent per year – and also without any further aid packages keeps at this level. This would be significantly above the pre-crisis level. The average of the last decade, the EU economy grew by only 1.2 percent per year. For this year, the EU expects a GDP decline of 7.75 percent.

the forecast Figures are reached, would the debt to GDP ratio of all EU countries, taken together, decline by 0.9 percent per year, and would be, in spite of the huge build-up funds 2024 3.5 per cent lower than it is today. This would, however, also achieved by redirecting: Poor and already highly indebted EU countries would reduce their debt sharply, and in economically stronger States such as Germany, the ratio would increase slightly.

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Updated Date: 21 July 2020, 18:27

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