EU Summit deal main points
By Frank Prenesti
Date: Tuesday 21 Jul 2020
(Sharecast News) - Here are the main points from the agreement reached by European Union leaders on Tuesday to revive their economies after the coronavirus pandemic:
- The European Commission will borrow €750bn using its triple-A rating. It will disburse €390bn in grants and €360bn in cheap loans. The grants force the bloc to generate cash to repay the borrowing by 2058
- Germany, Sweden and the Netherlands will lose their current rebate on the amount of VAT they pass on to the EU
- EU countries will impose a tax on non-recycled plastic and pass on proceeds to the EU
- A tax on goods imported into the EU from countries with lower carbon emissions standards than the bloc will be introduced from 2023
- Leaders also agreed to look at a tax on financial transactions and generating more revenue from extending the emissions trading system to maritime and aviation sectors. These would be ringfenced to repay the €750bn in borrowing
- The grants will be disbursed to countries that present plans that strengthen their growth potential, job creation and economic and social resilience of their economies. The plans also have to make economies greener and more digital and be in line with the commission's annual recommendations.
- Disbursement of grant monies will need the approval of a qualified majority of EU governments and be linked to meeting milestones and targets. If any EU state believes such targets had not been met it can ask EU leaders to debate it within three months.
- Money will also be linked to observing the rule of law. If the Commission decides there are "manifest generalised deficiencies in the good governance of Member State authorities as regards respect for the rule of law", it can propose measures that would have to get the backing of a qualified majority of governments.
- In return for backing for the recovery plan, net contributors to the EU budget like the Netherlands, Sweden, Austria, Denmark and Germany, will receive much deeper rebates based on the size of their economies.
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