EU unveils 750 bln euro plan for coronavirus recovery

The European Commission on Wednesday unveiled a plan to borrow on the market and then disburse to EU countries 750 billion euros in grants and loans to help them recover from their coronavirus slump.

Francis Maguire reports.

The European Union unveiled a 750 billion euro recovery package on Wednesday (May 27).

Every member state will get grants and loans to help them bounce back from this year's economic downturn.

Another aim is to protect the EU's single market from being split by varying economic growth and wealth levels.

That as the bloc is expected to emerge from its deepest-ever recession this year.

EU Commission President Ursula Von der Leyen.

"The Commission is today proposing a new recovery instrument called 'Next Generation EU' worth 750 billion euros.

It will sit on top of our revamped long-term EU budget of 1.1 trillion (euros)." Two-thirds of the 750 billion euros would be in grants financed by joint borrowing and one-third in loans.

But the grants are controversial.

States including Denmark and Austria would rather see low-interest loans paid out to lower-income countries.

The Commission says grants are better because Italy, Spain, Greece, France and Portugal already have high debts, and are heavily reliant on tourism that was brought to a halt the pandemic.

They will find it harder than more frugal northern nations to restart their economies through borrowing.

"These grants are a joint investment in our future.

They have nothing to do with the debts of the member states in the past.

The grants go through the European budget and the budget limits the payment of each country according to a fixed scale.

All 27 EU member states must support the package for it to go through.

Big-hitters France and Germany both back the plan.