European Council President Charles Michel called on all European Union (EU) member states to stay united on a comprehensive financial package to underpin the EU’s recovery from COVID-19 pandemic, urging its implementation as soon as possible.
Noting that the vast majority of member states have agreed with the compromise on the table, Michel said after a video conference of EU leaders on Thursday night that some other members are not able to support the majority regarding the mechanism on conditionality of the recovery package.
“This financial package is essential for our economic recovery,” Michel said, voicing his hope for a solution accepted by all member states through further discussion.
In July, EU leaders agreed upon a comprehensive package totaling over 1.8 trillion euros (2.12 trillion U.S. dollars), which combined the long-term EU budget for 2021-2027, or the so-called Multiannual Financial Framework worth nearly 1.1 trillion euros, and the recovery fund, named Next Generation EU, which was financed with a borrowing of 750 billion euros.
The recovery package needs to be ratified by all member states before coming into effect.
However, Poland and Hungary vetoed the financial plan on Monday, delaying the massive fiscal stimulus, which plays a critical role for the EU in getting through the recession caused by the pandemic.
“The Next Generation EU package must become operational without delay,” President of the European Central Bank Christine Lagarde told the European Parliament’s Committee on Economic and Monetary Affairs in a hearing on Thursday.
Lagarde stressed that the package’s additional resources can facilitate expansionary fiscal policies, most notably in those countries with limited fiscal space.
She called for proper arrangements to allow for the well-sequenced and effective spending of these funds.
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