Policy Briefs

M. Buti, M. Messori: Next Generation EU: An interpretative guide

The proposal, which the European Commission made public on May 27, 2020, strengthens and articulates the framework launched by Macron and Merkel about ten days before (May 18). This proposal, which is called "Next Generation EU" (NG-EU), confirms the disbursement by the European Union of 500 billion euro in the form of transfers, including guarantees, and adds 250 billion euro in the form of long-term loans to European Union (EU) member states. These resources will be collected through the issue of bonds on the financial markets by the European Commission on behalf of the EU. These issues will depend on the increase in the margin between own resources and the disbursements of the EU budget. The associated European debt, which has a long-term duration (the first maturities are in 2028, the last in 2058), is guaranteed by the next MFFs and will have to be repaid (including interest) by means of increases in the revenues of these same MFFs, also through the introduction of new own resources and, for the component relating to the 250 billion euro in loans, by the payment of financial charges and reimbursement made by the beneficiary countries.

Click here to continue reading the English version

Italian version