France plans EU COVID recovery fund of 150-300 billion euros per year in 2021-2023: document | Reuters | Business

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By Michel Rose and Gabriela Baczynska

BRUSSELS (Reuters) – France has proposed that the European Commission issue bonds to finance a stimulus fund for the European Union representing 1-2% of gross national income per year – or 150-300 billion euros – in 2021 -2023, according to a French Proposal seen by Reuters.

The EU is currently debating how to restart growth after a doldrums caused by the coronavirus epidemic. The Commission, the EU executive, is to present a formal proposal on a new joint budget for all 27 member states for 2021-2027, known as the multiannual financial framework, in the week starting May 18 MMF), and a stimulus that goes with it.

“The size should be at least 1% to 2% of the EU’s GNI per year over the next three years, which would provide the EU budget with an additional 150 to 300 billion euros per year between 2021 and 2023, “said the Frenchman. Discussion paper on the Salvage Fund says.

“Loans to member states could help close the gap, but should be complementary to grants. To guarantee maximum added value, these loans should have a grace period, a very long maturity and a low interest rate… It is also essential that this fund be set up as soon as possible, possibly before the entry into force. of the next MFF. ”

EU leaders agreed last month to set up the fund but have not resolved most of the details.

Paris has proposed to the Commission to proceed quickly with a single bond issue of 2-8 year maturities in order to raise funds against an increase in the MFF margin and guarantees from national governments. These bonds could be extended for a long time before being eventually reimbursed by the EU budget.

(Edited by Alison Williams and Timothy Heritage)

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