Still, if the spending proposals unveiled on Wednesday (May 27) by the European Commission, the EU's executive body, are approved by the Union's 27 member-states, at least 500 billion euros of this total amount will be new cash meant to help Europe's nations bounce back from what is anticipated to be their worst economic recession since World War II.
"In total, this European Recovery Plan will put 1.85 trillion euros to help kick-start our economy and ensure Europe bounces forward", the EU executive said in a document titled "Europe's moment: fix and prepare for the next generation".
Addressing MEPs in the European Parliament's plenary session, the head of EU's Executive arm said that Europe is taking "a new bold step together" by investing in a "collective recovery", and in a "green, digital and resilient future".
The half-trillion recovery plan originated in a joint proposal made by German Chancellor Angela Merkel and French President Emmanuel Macron, who surprised most Europeans last week by agreeing on the creation of a special fund which, unusually, would be used to provide grants rather than loans to countries ravaged by the coronavirus-related economic downturn.
Economy Commissioner Paolo Gentiloni said the fund was a "European turning point" that would be added to instruments that had already been launched.
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Of the total amount, €500 billion from the package will be distributed in the form of grants to member states, and €250 billion could be available in loans, according to an official, who asked not to be named, in line with policy.
Without the backing of all 27 governments in the European Union, the recovery plan can not go ahead.
The Commission is expected to propose new revenue streams.
Italy is to get 172.7 billion euros of the proposed 750 billion euro EU Recovery Fund for the coronavirus emergency, well-informed sources told ANSA Wednesday, a contribution hailed by Premier Giuseppe Conte.
An EU diplomat said: "By moving to the South and the East the Commission has avoided any hard decisions or compromises at this stage".
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"Let's give concreteness to a great plan of transformation and reform of the country, based on the green economy, digitalization, healthcare, education and research". The proposal "upholds the European vision of achieving climate neutrality and economic growth, and puts in place strong European governance to ensure that no investment made for the sake of recovery can harm the bloc's climate efforts", Dufour said.
The money raised on the capital markets would be paid back over 30 years between 2028 and 2058, but not later.
European Central Bank Vice-President Luis de Guindos on Tuesday warned that more debts incurred by countries already under pressure could spook the markets and endanger the euro single currency. The new budget period begins on Jan 1, and countries across the bloc are desperate for funds now.
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