Tuesday, January 26, 2021
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Largest European budget ever to prioritise green investments but some countries might not benefit from it

The European Commission has welcomed the agreement between the European Parliament and EU Member States in the Council on Europe’s next long-term budget and Next Generation EU, the temporary recovery instrument.

Once adopted, the package of a total of 1.8 trillion euros will be the largest package ever financed through the EU budget. It will help rebuild a post-COVID-19 Europe, which will be greener, more digital, more resilient and better fit for the current and forthcoming challenges.

“I welcome today’s agreement on our Recovery Plan and the next Multiannual Financial Framework,” said President Ursula von der Leyen. “We now need to move forward with finalising the agreement on the next long-term budget and Next Generation EU by the end of the year. Help is needed for citizens and business badly hit by the coronavirus crisis. Our recovery plan will help us turn the challenge of the pandemic into an opportunity for a recovery led by the green and digital transition”.

In particular, more than 50 per cent of the amount will support modernisation through policies that include research and innovation, via Horizon Europe, as well as fair climate and digital transitions, via the Just Transition Fund and the Digital Europe Programme.

Traditional policies such as cohesion and common agricultural policy also will continue to receive significant financial support, necessary to ensure their modernisation that should contribute to the recovery and the green and digital transitions.

Furthermore, thirty per cent of the EU funds will be spent to fight climate change, the highest share ever of the largest European budget ever. The package also pays a specific attention to biodiversity protection and gender equality.

As already proposed earlier in May and agreed by EU leaders on 21 July 2020, to finance the recovery, the EU will borrow on the markets at more favourable costs than many Member States and redistribute the amounts.

However, despite the fact that Central and Eastern European countries could be among the main beneficiaries of the EU’s recovery instrument, Poland and Hungary might not be among those.

Earlier in July, there were some concerns regarding the rule of law conditionality. Polish Prime Minister Mateusz Morawiecki was relieved to see that the rule of law and the funds were considered as two separate issues.

Now, the EU is discussing a specific mechanism to protect its budget against breaches of the rule of law.

Member of the European Parliament (MEPs) have been warning that European values are at risk and that EU funds from the long-term budget and the recovery plan should not be put into the hands of those working against democracy and fundamental rights in Europe, namely Hungary and Poland which are facing Article 7 proceedings by the Commission over the alleged violation of democratic norms.

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