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Commission proposes EU budget of €1,1 trillion and Recovery Instrument of €750 billion
Today, the Commission proposed a budget of €1,1 trillion for 2021-2027, which is slightly higher than the current seven-year budget (around 1,08). The European Commission will increase its own resources, for instance by extending its carbon tax and introducing a new digital tax.
In addition, the European Commission presented a Recovery Instrument of €750 billion, called Next Generation EU. This Instrument will support the Member States and the private sector. €500 billion will be distributed in grants, €250 billion in loans passed on to Member States.
The Recovery Instrument is composed of three pillars:
1) support to Member States for investment and reforms,
2) kick starting the EU economy by incentivising private investment,
3) the lessons of the crisis (support to the health sector).
The second pillar will be divided into three programmes:
-A new Solvency Support Instrument will mobilise private resources to urgently support viable European companies in the sectors, regions and countries most affected. It can be operational from 2020 and will have a budget of €31 billion, aiming to unlock €300 billion in solvency support for companies from all economic sectors and prepare them for a cleaner, digital and resilient future.
-InvestEU, Europe's flagship investment programme, will be upgraded to a level of €15.3 billion to mobilise private investment in projects across the Union.
-A new Strategic Investment Facility built into InvestEU – to generate investments of up to €150 billion in boosting the resilience of strategic sectors, notably those linked to the green and digital transition, and key value chains in the internal market, thanks to a contribution of €15 billion from Next Generation EU.
Next Generation EU will help develop strong and independent value chains such as critical infrastructure, technologies (e.g. AI) and healthcare. The recovery plan states that “recovery investment will be channelled towards strategic digital capacities and capabilities, including artificial intelligence, cybersecurity, secured communication, data and cloud infrastructure, 5G and 6G networks, supercomputers, quantum and blockchain. This will be a priority in the Recovery and Resilience Facility, InvestEU and the Strategic Investment Facility.” The plan also mentions the development of a “universally accepted eID to allow for simple, trusted and secure access to cross-border digital public services”.
Next step: These proposals need to be approved by the Council.
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