The European Commission has unveiled a €750 billion recovery plan aimed at ensuring economic recovery from the impacts of the COVID-19 crisis. The Next Generation EU fund consists of allocations for € 500 billion and loans for € 250 billion. Combined with targeted reinforcements to the long-term EU budget for 2021-2027, the fund will bring the total financial firepower of the EU budget to €1.85 trillion.
“Next Generation EU strengthens the European Green Deal and Horizon Europe – and will invest in key infrastructure from 5G to housing renovation,” Ursula von der Leyen, President of the EC, said at a plenary session. “At the same time, we must ensure that the transition to a climate-neutral economy leaves nobody behind.”
As explained, the grants will be channeled through the European budget, limiting each country’s contribution according to a fixed formula. “The grants will be clear investments in our European priorities: Strengthening our digital single market, European Green Deal and resilience,” she added.
The recovery plan proposes to reinforce programs such as the European Maritime and Fisheries Fund, the Connecting Europe Facility fund and the European Defense Fund. Lastly, a sectoral distribution of the gaps that will have to be filled by means of annual € 20 billion investments aimed at achieving the “green” transition of “vehicles, rolling stock, ships and aircraft has also been proposed.
Brussels-based environmental NGO Transport & Environment said that the €1.85 trillion recovery plan was a historic step forward for the European Union that could spark a green, healthy, and just recovery.
“Von der Leyen proposes ‘recovery bonds’ to finance a ‘Next Generation EU’ plan to ensure no one is left behind by stimulus measures. €500 billion of these bonds would be spent as grants on national projects that could help accelerate the green transition. The plan would also give €250 billion in loans for projects like green infrastructure and technologies,” the NGO added.
According to William Todts, T&E’s executive director, there is a worrying lack of detail on what green investment actually means. Spending big on shared and electric mobility is the right thing to do, but this plan leaves the door wide open for polluting engines and even airplanes to get stimulus money. That’s completely unacceptable,” he said.
To date 1.3 million citizens have signed on to a ‘green and just recovery’ appeal, which warns against EU and national governments bailing out polluting industries involved in sectors such as gas, oil and coal, chemicals, cars and airlines. Any stimulus investments must be conditional on companies’ alignment with social, environmental and climate objectives, T&E believes.
“The EU’s stimulus plan is a once in a generation opportunity. If we get this right we’ll emerge in a Europe with healthy and livable cities, a cutting-edge automotive industry and millions of new green jobs. But if we blow this chance, we can forget about the Green Deal or winning the global technology race. The stakes couldn’t possibly be higher,” Todts concluded.