BRUSSELS (Reuters) – European Commission appears to be tapping “late spring” financial markets to fund advances for 27 national pandemic recovery plans, seeking tens of billions of euros to borrow, European Economic Commissioner Paolo Gentiloni said.
Gentiloni said February and March would be key months for the Commission’s assessment of how each of the 27 EU governments wants to spend its share of the EU’s 750 billion-euro recovery fund, which will be then confirmed by EU finance ministers.
“At the end of this process, the country (which provided the plan) will receive 13% of the total plan on display,” Gentiloni told Breakingviews in an interview on Thursday.
“This means that at the end of the spring the Commission will go to financial markets to raise this money … with the aim of giving each country this 13% pre-financing with an agreed plan,” he said. .
Only 70% of the total 750 billion recovery funds have now been allocated to each country, with the remaining 30% allocated in 2022 once the spread of the economies is better known. leth.
The Commission can therefore try to fund 13% of the total amount already allocated, officials said, which would be nearly 70 billion euros, while governments apply for the full share of both loans and grants from the property.
Following pre-financing, further payments, possibly twice a year, would continue over the coming years, as projects outlined in the national programs reach agreed milestones and targets – a contract that will be assessed by the Commission before each new payment, Gentiloni said.
To agree spending plans, governments need to make sure the money goes towards making their economies greener and more digital, reducing overall bottlenecks and tackling country-specific problems that the Commission has identified in its individual recommendations.
To date, only 17 EU countries have submitted their draft spending plans to the Commission for consideration on how well they meet the criteria, before they are formally submitted at the end of the year. ‘February or March.
Gentiloni said there was “awareness” among EU governments of the need for the plans to adhere to EU standards, but said: “There is still a lot of work ahead to turn that into goals, targets, milestones. miles and promises. ”
Italy is the biggest beneficiary of the recovery fund with a 209-billion-euro share of the total, but government tensions in Rome have raised questions about how the country would be able to prepare a EU agreement.
“The Italian authorities are aware of the need to strengthen the proposal presented,” Gentiloni said, when asked whether the Italian scheme met the Commission’s requirements.
“In particular, we need two things: the first is to have clear messages about reforms that the Commission has announced in the country. Specific proposals that were issued in 2019 and the second that there is a need We have details of the timing of the projects, ”he said.
The EU’s 750 billion euro recovery fund includes grants and loans. It will be borrowed and repaid over 30 years, starting in 2026, with about 13-15 billion euros in servicing costs each year, Gentiloni said.
Reciting with Jan Strupczewski; Edited by Bernadette Baum