E.C. to Devote Billions to Aid Economic Recovery

The European Commission is opening up the vault, taking the wraps off plans for a 750-billion-euro ($826.5 billion U.S.) recovery fund as the region faces the worst economic crisis since the 1930s.

It will borrow these funds and then disburse them via the European budget — the European Union’s common basket of cash that supports programs such as Erasmus. They will be repaid over a long period of time, between 2028 and 2058.

The 750 billion euros includes 500 billion euros in grants and 250 billion euros in loans to member states. Out of the 500 billion euros in loans, 310 billion will be invested in the green and digital transitions.

Germany and France opened the door to issuing mutual E.U. debt last week, suggesting that the Commission, the E.U.’s executive arm, should raise 500 billion euros on the public markets. The Franco-German plan was to give all 500 billion in grants rather than loans to the sectors most impacted by the crisis.

The initiative was described as a "breakthrough" and a "historic" step as Germany had always opposed the idea of jointly-issued debt, even during previous crises.

However, there are four European countries that still oppose the Franco-German plan and want the E.U. to issue loans rather than grants as a way to mitigate the economic fallout from the COVID-19 crisis. Austria, the Netherlands, Sweden and Denmark also want strong economic reform commitments in return for any financial help.