FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium May 5, 2021. REUTERS/Yves Herman
July 13, 2021
By Francesco Guarascio
BRUSSELS (Reuters) -European Union finance ministers adopted investment plans of 12 EU states on Tuesday, including those of Italy, Spain and France, paving the way for the first disbursements of EU funds to boost the economic recovery from the COVID-19 pandemic.
The European Commission estimates the 800-billion-euros ($948 billion) recovery plan, financed through unprecedented joint borrowing and disbursed in grants and loans, could boost public investment to 3.5% of the bloc’s gross domestic product next year, the highest in more than a decade.
Ministers meeting in Brussels approved plans prepared by Austria, Belgium, Denmark, France, Germany, Greece, Italy, Latvia, Luxembourg, Portugal, Slovakia and Spain, an EU statement said, in what is the first batch of approvals of national investment programmes under the EU recovery plan.
Plans from the remaining 15 EU countries will be assessed at a later stage. Italy and Spain are among the top beneficiaries in absolute terms of the recovery funds.
Arriving to the meeting, EU economics commissioner Paolo Gentiloni said the first “pre-financing disbursements” for the 12 nations would be disbursed in the coming weeks.
The pre-financing amounts to up to 13% of the EU’s recovery facility. The money will have to be paid within two months from the signature of the financing agreements, which are expected later in July.
The funds will help fuel the economic rebound after last year’s pandemic-induced crisis, with the executive Commission estimating 4.8% growth this year and a 4.5% expansion in 2022 for both the wider EU and the euro zone, which comprises 19 of the 27 EU countries.
Last year the euro zone zone’s economy shrank by 6.5% and the EU’s by 6%, according to the latest figures released by the Commission last week.
The Commission warned, however, that its upbeat forecasts were based on the assumption that restrictive measures would be eased in the second half of the year, and acknowledged the downside risks posed mostly by the more contagious Delta variant of the coronavirus which is predicted to become dominant in Europe in August.
($1 = 0.8435 euros)
(Reporting by Francesco Guarascio; Editing by Raissa Kasolowsky and Alex Richardson)