Let's talk about 💶 and 📉. 1/€
Starting tomorrow, 🇪🇺 EU member states will meet to agree on the terms of a recovery fund designed to help their economies balance the deficit left by the COVID-19 pandemic.
graphics.reuters.com/EU-RECOVERY/jz…
The hole they're trying to fill is... big. Some have even framed this crisis as an existential dilemma for the Eurozone.
So, to address a financial crisis of this scale, the proposed funding mechanisms are also MASSIVE.
The overall value of support on offer, combined with access to trillions of euros of cheap loans and new EU-level funding still under debate, will amount to over 10 TRILLION EUROS.
That breaks down between 3 sources:
🏛️ National governments (€3.6 trillion)
🇪🇺 The EU (€1.3 trillion)
💶 and the European Central Bank (€5.4 trillion)
One of the more novel parts of the EU's relief proposal would see the European Commission borrowing money on the market against EU government guarantees to give outright grants to member states (as opposed to just loans).
If accepted, that proposal would mean the EU accepting a joint debt for the first time and would be a step towards deeper integration and a fiscal union.
Still, we'll see whether the EU recovery effort will be enough to restore regional economies' health, and whether it can compensate for the difference in scale between the national aid packages of the wealthiest EU members.
Follow @Reuters for more coverage of the summit starting tomorrow and read the whole story on the Euro safety nets being discussed.
by @OvaskaOvaska @reutersJanS and Balazs Koranyi
graphics.reuters.com/EU-RECOVERY/jz…
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