The loans that Member States will take out from the European Commission to finance their national plans under the Next Generation EU Recovery Plan will be accounted for as public debt under the rules of the Stability and Growth Pact, said Commission Vice-President Valdis Dombrovskis on Tuesday 16 February.
“When Member States are taking loans, it adds to the level of Member States’ public debt”, said Dombrovskis at the end of the Ecofin Council. At the same time, this will be done on “very favourable” borrowing terms, so using loans from the Recovery and Resilience Facility can help the EU27 reduce their debt servicing costs, he noted. He referred to the Commission’s issues under the SURE programme to support national short-time working schemes, where securities up to 15 years have negative returns and those up to 30 years have negative returns of 0.134%.
Under the €672.5 billion Facility (€312.5 billion in grants and €360 billion in loans), Member States have to decide whether to call for assistance under the loan facility.
They have until “August 2023” to take such a decision, which will require a modification of the national plan with “new measures” and new milestones to verify compliance with the commitments, a European source said.
Member States will be able to submit their national plans to the Commission starting 18 February, the date of entry into force of the Regulation establishing the Facility, until the end of April at the latest. The Commission will have two months to recommend to the EU Council to formally adopt the national recovery plan, with the latter then having one month to do so.
If all Member States quickly ratify the ‘own resources decision for the EU budget’, the Commission will be able to borrow on the markets “this summer” on behalf of the EU27 as part of Next Generation EU, Mr Dombrovskis hoped.
At this stage, six Member States have ratified this decision. See the status of ratification: http://bit.ly/2LVvObj (Original version in French by Mathieu Bion)