London- Finally, the European Union is finally ready to raise the much-needed funds from the public markets and even boosted the 27-economies after the severe shock from the ongoing coronavirus crisis.
Moreover, the bloc took an unprecedented decision in the month of July 2020 and jointly raised capital to fund the economic recovery. However, this fiscal effort worth 750 billion euros. However, the stimulus is on the top of the individual governments which have already deployed in the awakening of the pandemic.
However, the legislature took steps, for which the European Commission is able to tap capital markets in search for those funds as early as this month.
“The European Commission is ready to go to the markets to raise money to make [the] EU greener, more digital, and resilient,” President Ursula von der Leyen said on Twitter.
On Monday, the institution mentioned that almost 38 financial institutions might be primary dealers which involves France’s BNP Paribas, Germany’s Deutsche Bank, and Italy’s UniCredit.
Notably, The 27 EU capitals will be receiving the first disbursement of 13% of the total amount that’s been allotted to them in the coming months. Future payments will be subject to whether countries implement the necessary reforms.
This is why member states have put forward recovery plans outlining how they will be using the money and how they will be making their economies more competitive.
However, these documents are still being reviewed by the European Commission and should be scrutinized final time by the member states. The EU’s executive arm aims to accomplish its assessment in mid-June and member states will then have one month to provide their opinion on each other’s plans.
Some member states, such as Portugal, are pushing for the complete review process to be concluded by the end of June.
“It’s a truly historic moment for Europe: The beginning of large-scale common borrowing, even if it is a temporary program,” Erik Nielsen, chief economist at UniCredit
He said, “The actual borrowing — and disbursements — will not be an issue. The potential hurdles will more likely emerge in the implementation phase of the reforms and investments — but that’s normal for anything big and ambitious.”
Well, the European Union’s economy contracted 6.1% in 2020 and is expected to rebound by 4.2% in 2021, according to data from the European Commission.
On Tuesday morning, Peripheral yields in the eurozone were lower.
