Matt Atlas

EU Approves A Dozen Pandemic Recovery Plans

The European Union has today approved the first 12 national recovery plans, which will allow member states to start drawing money from an extraordinary fund for economic recovery after the coronavirus crisis in the coming weeks. Among other things, the finance ministers approved contributions for Italy or Spain, which are the countries that will be the largest beneficiaries of the fund with a total volume of 750 billion euros (about 19.1 trillion CZK).

Slovakia or the largest EU states, Germany and France, will also be able to draw money. The Czech recovery plan is currently awaiting review by the European Commission (EC), and its final approval and payment of the first money is realistic, according to Finance Minister Alena Schillerová, in September.

Brussels will set aside € 672.5 billion from the package, for which the EU began borrowing money in an unprecedented way by issuing joint bonds in June. The Union has agreed on a total of 11 criteria for the use of investments. Among other things, at least 37 percent of the volume of money should go to climate-friendly projects, and a fifth to digitization.

“Now the commission can sign financing agreements with the states, which will allow them to receive 13 percent pre-financing. We expect to do so by the end of July,” said European Commission Vice-President Valdis Dombrovskis after talks with ministers. According to him, the Commission has already obtained enough money on the markets to pay the mentioned 13 percent of advances for all countries this year, but it could pay some countries, such as Spain, another part of their national allocation this year.

Spain is the country that receives the largest share of non-repayable grants. Of the total package of direct subsidies, which includes 312.5 billion euros, up to 69.5 billion should go to Madrid. However, in combination with low-interest loans, Italy will receive the most, which can expect 191.5 billion euros. In addition to these two countries, ministers today opened the way for contributions from the fund to Slovakia, Germany, France, Austria, Portugal, Greece, Belgium, Denmark, Latvia and Luxembourg.

While these countries submitted their strategy to the Commission at the turn of April and May, the Czechia did not begin until June. The EU executive has two months to assess the documents, then they have to confirm the member state’s plan, which can happen at the earliest after the summer holidays.

“Today, representatives of the European Commission said that we were at a high level of evaluation,” Minister Schiller told Czech journalists in Brussels. He expects that the commission could say the final word at the end of July, and the ministers should definitely confirm the Czech plan in September. The Czech Republic is to receive 7.1 billion euros (about 180 billion CZK) in subsidies from the fund, and according to Schiller, it is not yet seeking loans, although Prime Minister Andrej Babiš spoke about their use at the June summit.

The EU executive delayed the approval of the Hungarian plan this week due to fears of systemic irregularities related to possible corruption in public procurement. In the case of the Czech Republic, the commission concluded in an audit published this year that the authorities are not resolving a systemic problem with the conflict of interests of Prime Minister Babiš. Schiller said today that she was not worried about a possible delay in disbursing the fund because of the matter.

“I assume that we would be asked and that we would be able to provide relevant satisfactory answers,” the minister said. She added that she had no information about any current reservations of the commission about the Czech plan.