The outline of the proposal is clear: a Minimum of a trillion euros the European Commission wishes to boss, in the framework of the next EU budget to support the European economy, according to the Corona-crisis on the way. Only a small part of real money, the Rest are guarantees, shifts, and for the first Time in the history of the debt belongs to. The Plan, the Ursula von der Leyen, this Wednesday presents, also brings an increase of power for you, because you have to win in order for the supervision of the "Recovery Fund" of the EU. The huge sum represents a doubling of the EU expenditure: The regular budget of the EU 2021-2027, which is not yet approved still, and also includes a trillion euros.

How is the money distributed?

The EU Commission assigns already now the regional aid, with which the economically weak regions of Europe for decades, are supported. Similar to the functioning of the Corona-aid, where it is still uncertain whether the applicant would have to provide the end state for this project is also a contribution.

the money Spent for the long-term objectives of the EU, i.e. projects against climate change, digitalization, or for research and development. From the Recovery Fund any industries are to be maintained on life, which are threatened by Corona from bankruptcy. This will give political dispute, because many of the States also hope to aid to the preservation of jobs.

The money should go to the most difficult of Corona affected regions. So there is no subsidy in the state Treasury. But can enough be projects fast enough on the Track? Italy, for example, is now unable to retrieve from Brussels, funding also. And the Commission is able to mobilise enough officers to distribute the new billion?

Resistors

As Germany's Chancellor Angela Merkel and French President Emmanuel Macron her through debt-financed 500 billion-dollar Recovery Fund presented, showed the Chancellor how you doubters at home, wants to convince A common response to the crisis was also stated in the German interest to you. Minister of state for Europe Michael Roth, the Argument of solidarity is not only a generous gesture, "is repeated on Tuesday in Brussels, the solidarity is in everyone's best interest".

These declarations are addressed to the address of the "Thrifty Four": Austria, Denmark, the Netherlands and Sweden. You do not want to allocate funds for the Post-Corona-Fund in the form of grants, such as Merkel and Macron suggest, rather than repayable loans.

in Contrast, the highly-indebted Italy, runs mainly Rom refuses to increase the debt burden of the country. The Italian Europe Minister, Enzo Amendola criticized, therefore, the Plan of the group of four as defensive and unreasonable, and said, with a view to the presentation of the reconstruction Plan: "The EU Commission is in need of on 27. May more courage."

the solution to The problem may well lie in a mixture of grants and loans. Von der Leyen, a Mix of 60: 40 or even 70:30 wants to propose to pacify the group of saving seeds.

so Far, no agreement on EU budget

The dispute is complicated by the fact that at the same time the next medium-term financial plan, the regular budget of the EU must be decided. Here, too, the member States were removed in the spring still far from an agreement. The "Thrifty Four" want cuts in the Budget of the French Minister for Europe, Amelie de Montchalin, warns explicitly against: You should not "Rob Peter to pay Paul", i.e. money from the budget to repaint, and then put it in the Recovery Fund. France make for a EU-budget, the money for long-term programs, such as the common defense and the Green Deal, as well as a Recovery Fund to help the States with grants that do not need to be paid back.

in normal times, meetings in the budget negotiations in late-night Summit, according to all the rules of the art game. Now at the same time, two pots with Multi-have to be in the billions and unanimously agreed. Therefore, it is expected that there may be an agreement at a special summit of the German presidency of the Council after the commencement of their term of office on 1. July set would have to be. The government will sit on the heads probably for the first time in a Long Time at the big table in Brussels real.

Who should pay?

The Recovery Fund is to be fed from the historically one-time approval for the EU Commission to the debt. The President of the Commission, in Essence, using the EU budget as a credit basis, on the financial market the necessary billions to be incorporated. This money is then to be within the next three budgetary periods, i.e. within about twenty years, to be paid back. Accordingly, would increase the regular contribution payments of the member countries, if the repayment begins.

it is Important that this money should be quickly placed from the beginning of 2021, to achieve the effect. The recording of liabilities by the Commission is, however, legally controversial, which can lead to delays.

financial problems remain unsolved

And, as Friedrich Heinemann from the European economic research Institute ZEW warns: "The Recovery Fund is, ultimately, the dramatic financial problems of Italy and Greece can't solve". The payments represented a subsidy of two to three percent of their respective economic performance.

The economist has also heard, of all things, who in the future is likely to be the net contributors and receivers of the EU. It is clear that Germany will have to bear the greatest burden - depending on the economic development and the outcome of the distribution struggle in Berlin had to Deposit between 23 and 38 billion euros in the community pot. Poland could, however, be a contribution of about 10 billion for the first Time from the receiver to the payer.

it All depends on how the distribution of the Corona is calculated billion. The crash at the time of economic performance is crucial or the increase in unemployment is expected to do this? Accordingly, the European South, could expect the lion's share of the money, or Eastern Europe would get a little more. A shift from the East to the South will take place in each case - France, Italy and Spain would be the biggest beneficiaries. But also the Eastern Europeans must agree to the budget plans in Brussels - the negotiations will be hard on many fronts.

author: Barbara Wesel

*The contribution "Of the Leyens trillion package" is published by Deutsche Welle. Contact with the executives here.

Deutsche Welle

Date Of Update: 26 May 2020, 23:27