After long negotiations, the 27-nation EU reached a breakthrough agreement early Tuesday morning on the latest economic stimulus.
The European Commission will raise a record 750 billion euros ($857 billion) from financial markets to finance or lend to countries and industries affected by the epidemic. The European Council President Charles Michel called the agreement a historic "key time ". for Europe
"EU countries are taking an important step towards closer financial CPPCC when needed ," said Brenberg Bank analyst. The deal is the first, and the EU is expected to take more common fiscal action in the coming crisis. "
The funds will be used for the "reform and recovery plan", and all ways of use will require the approval of the majority of EU member states. Together with the EU's over 1 trillion economic budget from 2021 to 2027, 1.824 trillion euros will be invested in the European market in the future.
One important area of investment will be climate-related investment. As part of the EU's "reform and recovery plan" and 30 per cent of the economic budget will be spent on climate change-related inputs, the EU says it hopes to reach a "carbon neutral" by 2050(equal in greenhouse gas emissions and reductions). Associated with this is the European Union's desire to ease the debt pressure from huge spending by imposing a non-recyclable plastic waste tax from January 1,2021, a tax on imports from countries that do not levy a carbon tax from January 2023 and an electronic information tax at the same time.
It is worth noting that the newly approved funds will not be available until January 2021, so if the EU wants to provide liquidity to markets affected by the epidemic, it needs to find another way out. In April, EU finance ministers approved a €540 billion short-term fiscal stimulus. Individual stimulus packages have also been introduced. And the EU has bought 135 million euros of national government bonds to inject liquidity into the market.
