EU approves economic stimulus package to offset COVID-19

417
SHARE

After five days of exhausting debate, 27 European state leaders have finally agreed upon a relief plan to the tune of €750 billion to ease the dire economic straits perpetuated by the COVID-19 pandemic. Reaching a deal has proven to be far from easy, with opposition from the “frugal” four — Denmark, Sweden, The Netherlands, and Austria.

Originally, it was proposed by the European commission to offer €500 billion in non-repayable grants to countries hit hardest by the pandemic, such as Italy and Spain. After a heated and lengthy debate, the proposal was altered to provide €390 billion in grants and €360 billion in loans, all of which would be funded by the new economic reconstruction fund.

For the frugal four, the primary concern with the proposal is centered around debt since all EU member states will be required to fund the €390 billion in grants as well as the €360 billion in loans. To sweeten the deal, the frugal states will receive an increased rebate for their contributions to the fund, a compromise akin to the one secured by Margaret Thatcher in 1984 where the U.K. received discounts for its considerably large budget contributions.