The European Union will promote a recovery fund to fight the coronavirus, which will be linked to the European Budget currently being negotiated, as confirmed by the President of the Commission, Ursula Von der Leyen. However, there is still no agreement on its financing nor its entry into force, which is why the European Council ends with a minimum commitment, as had anticipated ForexNews.online. And most importantly: it is not known whether it will grant loans or transfers to countries. That means that, for the moment, Spain does not get the EU to grant subsidies for reconstruction by the opposition of various countries.
Von der Leyen explained that the videoconference meeting held by European leaders has confirmed "the urgency to make decisions", although there is still no agreement on what that recovery fund will be like.
However, the German leader did comment that the total number being considered ranges from 1 and 1.5 billion euros for the next few years, although he added that it remains to be defined how it will be financed.
"There are a variety of opinions between the balance that should be between transfers and loans. It has to be discussed. The important thing for us is that we are clear about the framework and we are going to work in close cooperation with all the states, "he explained.
For her part, the Spanish Minister of Foreign Affairs, Arancha González Laya, explained after the meeting that "Spain defends that transfers be made " to "avoid the excessive indebtedness of some countries and avoid that the way out of the crisis is asymmetric". Laya added that "we have seen a change in the debate" and a "better predisposition". However, it has recognized that debt issue has not been debated, as the Spanish Government has proposed.
For his part, the Belgian President of the European Council, Charles Michel, He pointed out that "today we all agree to work on a specific recovery fund dedicated to the COVID crisis19, which is necessary and urgent, which is large enough to face the scope of the crisis and is directed to the most affected sectors and geographical parts of Europe"
"Work must continue urgently in this recovery fund to evaluate its exact magnitude, its financing and the link with the Budget, which should be adjusted ", added Michel.
The next meeting by teleconference of the European Council will take place next May 6th. Von der Leyen hopes that some kind of agreement will be possible from mid-May, although it will be difficult in the current scenario. Berenberg analysts value progress as "very limited" in economic matters, but they stand out "a better effort to send a signal of solidarity rather than discord".
"Hopefully," they conclude, "this may be good enough to avoid further and potentially dangerous widening of risk spreads in the European bond markets. "Finally, they consider" encouraging "that the Prime Minister of Italy, Giuseppe Conte, you have positively valued the meeting.