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EU Proposes 750B Euro Recovery Fund    05/27 06:20

   The EU's executive is proposing a 750 billion-euro ($825 billion) recovery 
fund to help the bloc's economy through the painful recession triggered by the 
coronavirus pandemic, commissioner Paolo Gentiloni said Wednesday.

   BRUSSELS (AP) -- The EU's executive is proposing a 750 billion-euro ($825 
billion) recovery fund to help the bloc's economy through the painful recession 
triggered by the coronavirus pandemic, commissioner Paolo Gentiloni said 
Wednesday.

   Gentiloni, who is in charge of economic affairs at the commission, wrote in 
a tweet that the move is "a European turning point to face an unprecedented 
crisis."

   However, the 27-nation EU remains deeply divided over what conditions should 
be attached to the funds, and Wednesday's proposal from the EU's executive arm 
is likely to set off weeks of wrangling. Details of the proposal are due to be 
unveiled later Wednesday.

   The move comes with the world's biggest trading bloc set to enter its 
deepest-ever recession as the impact from the coronavirus ravages economies. 
Virtually every country has broken the EU's deficit limit as they've spent to 
keep health care systems, businesses and jobs alive.

   Earlier this month, the leaders of Germany and France  historically, the 
two main drivers of EU integration  agreed on a one-time 500 billion-euro 
($543 billion) fund, a proposal that would add further cash to an arsenal of 
financial measures the bloc is deploying to cope with the economic fallout.

   That plan would involve the EU borrowing money in financial markets to help 
sectors and countries that are particularly affected by the pandemic. The 
European Commission's blueprint is likely to resemble the Franco-German plan in 
many ways while attaching the fund to the EU's next long-term budget.

   The big question will be how much money will take the form of grants and how 
much would be loans.

   Austria, Denmark, the Netherlands and Sweden  a group of countries dubbed 
the "Frugal Four" for their budgetary rectitude  are reluctant to see money 
given away without any strings attached, and their opposition to grants could 
hold up the project.

   "Will it be grants or loans? And if it will be grants, who are going to pay 
the grants? Loans, I think is a more interesting way forward to discuss, but we 
also have to discuss under what conditions shall we give these loans," Swedish 
Finance Minister Magdalena Andersson said Tuesday.

   Whatever its content, the commission's plan is likely to spark heated debate 
and the EU does not have time for the wrangling to drag on. The new budget 
period begins on Jan 1, and countries across the bloc are desperate for funds 
now. All 27 member countries must agree for the recovery fund to take effect.

 
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