The new EU aid fund – or thMore power for the headquarterse new Recovery and Resilience Facility (RRF), as it was called in the summit’s final document – is to amount to 750 billion euros as proposed by the EU Commission. Over the next three years, the fund will provide EUR 390 billion in grants and EUR 360 billion in loans to member states. To finance this programme, the EU Commission will be authorised to issue its own bonds on behalf of the EU and place them on the capital market.
This gives the EU the opportunity for the first time to refinance itself by raising its own loans on the capital market. The debt service for the new EU bonds will then be handled by the EU budget, which in future will also have its own tax revenues: From 2021 a tax on disposable plastics is to be introduced, and from 2023 a digital tax and a CO2 border tax are to be added. A financial transaction tax has in any case been in the pipeline for some time.
With the Brussels decisions, the EU will become an independent player in fiscal policy for the first time. This change was long overdue, and the ECB will not least be relieved that it can now expect more support from Brussels in the fight against the crisis. Of course, this is also a further step towards a transfer union, but probably an unavoidable one. It is important, however, that the criteria for the use of funds are not just on paper. The EU as a whole must become more competitive, modern and innovative. The reconstruction programme can be an important step in this direction.