The European Commission has proposed a EUR 750 billion Next Generation EU plan which “can build a green, digital and resilient future”, and support the European Union to recover from the coronavirus pandemic.
To face the challenges the proposed instrument, the Commission has proposed the new recovery instrument, called Next Generation EU, within a revamped long-term EU budget. In total, this European Recovery Plan will put EUR 1.85 trillion to help kick-start the European economy.
“The recovery plan turns the immense challenge we face into an opportunity, not only by supporting the recovery but also by investing in our future: the European Green Deal and digitalization will boost jobs and growth, the resilience of our societies and the health of our environment,” European Commission President Ursula von der Leyen said.
The funding will be channelled through EU programmes under the next EU budget, including the European Green Deal which will support cleaner transport and logistics and will give a boost for rail travel and clean mobility in our cities and regions.
The Connecting Europe Facility, InvestEU other funds will support the financing of the transport projects.
The transport sector will benefit an additional EUR 1.5 billion for the Connecting Europe Facility to facilitate the cross-border connections, such as Rail Baltica linking the Baltic States and Poland, towards Europe.
“The CEF has been key in helping our European interconnectivity, across borders and across modes. This will continue in the next EU Budget, with an increase in its budget of EUR 1.5 billion, recognising transport as a key sector for our future,” The Commissioner for Transport, Adina Valean, said.
EUR 500 billion of the funds channeled through Next Generation EU will be used to fund the grant component of the Recovery and Resilience Facility and reinforce other key crisis and recovery programmes. The rest of the funding mobilized via the instrument of EUR 250 billion will be made available to Member States in the form of loan sunder the Recovery and Resilience Facility.
The Next Generation EU will raise money by temporarily lifting the own resources ceiling to 2% of EU Gross National Income, allowing the Commission to use its strong credit rating to borrow EUR 750 billion on the financial markets. This will be repaid over a long period of time throughout future EU budgets, not before 2028 and not after 2058.