European Union announces 750 billion- euro COVID-19 recovery fund

The European Union proposed 750 billion Euros as COVID-19 recovery fund. The fund is to be used by the countries to recover from deep recession caused by the COVID-19. The announcement by the European Union came as the 27- nation trading bloc has entered its deepest-ever recession as COVID-19 ravages the economies of the nations. Paolo Gentiloni confirmed the size of the fund announced by the EU. He is in charge of economic affairs at the European Union’s Executive Body.

 

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Key Highlights of the fund:

  • In order to keep the health care systems, jobs, and businesses alive, every country has broken the European Union’s deficit limit.
  • France and Germany had earlier agreed to provide 543 billion USD fund to add cash to the financial measures of the bloc.
  • The European Union is to implement the blueprint that are in several ways similar to that of the Franco-German model.
  • The plan involved the European Union borrowing money in the financial markets to help the countries and the sectors that have been affected by the pandemic.
  • Denmark, Australia, Sweden, and Netherland have been reluctant in regard to the money given away without any strings attached.
  • As the new budget period begins on January 1, countries have become desperate for the funds. It will be important that all the 27 countries must agree for the recovery fund to come into effect immediately.

India’s stand:

India supports the Franco-German model greatly. Around 25 nations including India discussed ways to contain virus involving key international organization. The alliance was led by France and Germany and the model is an outcome of the meet of 25 nations that was held through video conferencing in April 2020. India was represented by the External Affairs Minister Shri Jaishankar.

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What is Franco-German Model?

The model aims to pull in world organizations in the fight against COVID-19. The model also aims to strengthen the UN and especially under financed World Health Organization (WHO) to develop and distribute tests and vaccines.

About recovery fund:

The EU Commission is proposing a 750 billion euro recovery fund. The money would be divided up into 500 billion euros given to EU countries as grants, the remaining 250 billion euros would be available as loans.

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