The meeting of the heads of state and government of the EU member states this Friday sees the beginning of negotiations regarding the ”Next Generation EU” recovery plan proposed by the European Commission. This foresees the mobilisation of 750 billion euros to help the EU emerge from the recession caused by the Covid-19 pandemic. At the same time, negotiations are also underway for the next EU budget (Multiannual Financial Framework, MFF) for the years 2021-2027, which, according to the proposal of the Commission, should comprise 1.1 trillion euros.
In its spring forecast for the economic situation of the EU, the EU Commission expects economic output in the second quarter to be around 16 percent lower than in the preceding year. It anticipates a fall in gross domestic product of around 7.5 percent for the year as a whole – significantly worse than in the financial crisis of 2009. The EU recovery plan looks to mobilise 750 billion euros, of which 500 billion euros should take the form of non-repayable grants and the remaining 250 billion euros as loans, spread across the EU budget.
These sums make it clear that the investments to be funded will aim to promote the transformation to sustainable development and climate protection required to meet the goals stipulated with the 2030 Agenda and the Paris climate agreement. How can this be achieved? Do the consequences of the current crisis not risk a return to outdated business models that stand contrary to the sustainability and climate goals?
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This blog first appeared on the DIE site.
Author: Janina Sturm, DIE.
Image courtesy of Nicolas Raymond via Flickr.
The views are those of the author and not necessarily those of ETTG.