The European Commission will on Wednesday unveil a plan to help the EU economy recover from its coronavirus slump with a mix of grants, loans and guarantees exceeding 1 trillion euros that raised controversy even before it was announced.
The aim is to help countries and sectors worst hit by he COVID-19 pandemic recover quickly and protect the EU single market of 450 million people from being splintered by divergent economic growth and wealth levels as the 27-nation bloc emerges from its deepest ever recession expected this year.
The disputed novelty of the plan is for the Commission to borrow cheaply on the market against the security of the EU budget and then give some of the borrowed money, rather than lend it on, to those who need it most. But it is the grants, financed through joint borrowing, that worry the Netherlands, Sweden, Austria or Denmark. The borrowing will have to be repaid, meaning higher national contributions to the EU budget in the future or new taxes assigned to the EU.
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