EU Leaders Agree on 750 Billion Euro COVID-19 Economic Recovery Fund After Marathon Negotiations

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] European Union (EU) leaders agreed on June 21 (local time) to establish a recovery fund worth 750 billion euros (approximately 1,031.5 trillion KRW) to respond to the impact of the novel coronavirus disease (COVID-19). After a five-day marathon negotiation, the grant portion of the total recovery fund was set at 390 billion euros.

According to Bloomberg and other sources, the 27 EU member state leaders held a five-day meeting starting on June 17 and finally agreed on the establishment of the recovery fund to revive the European economy. The key point of discussion was the operation method of the recovery fund: 390 billion euros will be operated as grants, and 360 billion euros as low-interest loans.

Bloomberg reported that Italy, which became the epicenter of the pandemic within Europe, is expected to be the biggest beneficiary of this agreement, citing estimates from the Italian government that Italy will receive 82 billion euros in grants and 127 billion euros in loans.

Additionally, a 'rebate' clause was ultimately included, allowing the Netherlands, Austria, Denmark, Sweden, and Germany to receive partial refunds of their EU financial contributions. Bloomberg reported that these five countries are expected to receive 50 billion euros back over the next seven years. Furthermore, the issue of excluding the 'compliance with democracy' condition, which was demanded by Hungary and Poland as one of the fund conditions, was weakened in the final stages of discussion and did not become a key agenda item.

Charles Michel, President of the European Council, said at a press conference, "This agreement will send a concrete signal that Europe has the power to act," and added, "I believe this agreement will be a pivotal moment in Europe's future journey." President Michel proposed the grant amount of 390 billion euros in the early morning of the previous day to resolve the deadlock caused by the lack of consensus among member states over the grant size, resulting in the achievement of the agreement.

This content was produced with the assistance of AI translation services.