There has been some confusion over the last days on how the #EUCO result will affect the allocation of the money in the Recovery Instrument.
Short thread on what we know and what we do not know - and why there will be a lot of uncertainty until 2022 no matter what:
Short thread on what we know and what we do not know - and why there will be a lot of uncertainty until 2022 no matter what:
1/ The summit has changed the allocation compared to the Commission proposal by making 30% contingent on future growth. This means we know the allocation of about 70% or 218.75 bn. It looks like this: 
2/ The remaining 30% will be split in half: 15% will be distributed according to the GDP shortfall in 2020, another 15% according to the shortfall in 2020 and 2021. Now there is a bit of confusion on whether this means shortfall in absolute numbers or relative to 2019 GDP.
3/ An annex apparently sent to delegations in July suggests that this is meant in relation to 2019 GDP. This would imply fairly small changes if we look at the current forecasts. But @ZsoltDarvas justifiedly points to the possible different reading which yields bigger changes.
4/ However, one thing is crucial here no matter the criterion: The numbers will only be calculated based on actual GDP outcomes in summer 2022. Forecasts are notoriously prone to errors in normal times - in an unprecedented situation like this pandemic, this applies even more.
5/ What we can produce for the remaining 30% at the moment are estimates that can change substantially both as the economic picture gets clearer and as we know more how the pandemic itself proceeds. We can infer trends from these estimates - but they aren't outcomes.
6/ One of the effects of the 70-30 split is an insurance mechanism against bad outcomes we do not yet know about. This has a huge downside - it creates uncertainty. It also has a solid upside: If countries get hit badly over the next 18 months, they will get additional funds.
7/ So whichever numbers you use for the total amount, take them with a grain of salt. We produce them to have an impression where things are headed. That is why I find it a useful exercise. But they are not really fit for precise judgments about who benefits exactly by how much.
8/ Oops wrong version of the conclusions for the new key. This is the final one:
