next generation eu by country

Currently, the November 2020 Commission estimates are available for GNI up to 2022, while the October 2020 IMF World Economic Outlook includes GDP forecasts for 2020-2025 (but no GNI data is available in the WEO). Various ideas have been floated – including a digital tax and a financial transactions tax – but the most appropriate new resource would be revenues from the EU emissions trading system, which could provide enough funding to repay the EU's coronavirus borrowing. Estimates of payments countries will receive from the Next Generation EU instrument can be made with some degree of precision. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post. Commission Proposal May 2020. To foster an efficient economic rebound post COVID-19 crisis, we propose instead to allocate funds through a forward-looking approach based on specific industrial and economic structure of EU regions. Thus, for 71% of NGEU grants and guarantees, the cross-country allocation was known. Spolaore 2016, Cecchetti and Schoenholtz 2020). Effective contribution to the green and digital transition shall also be a prerequisite for a positive assessment.”. Altogether, the amount of EU money to be absorbed from January 2021 will be several factors greater than earlier amounts. The implied maximum available funds for 2007-2013 was cut back by more than 4% from 2015 to 2016, so I adjusted the 2016 absorption rate included in the dataset to eliminate this retrospective cutback. - Belgium -, There is a difference between commitments (a promise to pay) and payments (money actually disbursed) in the EU budget (see an explanation of this differentiation. The estimation of yearly loan pay-outs from NGEU is much simpler, because the Commission in its initial proposal planned to make all commitments in 2021-2022 and all payments in 2021-2025, hence it is not impacted by the European Council’s new deadline of 2023 for commitments and 2026 for payments. The impact of EU debt on the EU market of safe assets. But in fact, the link provides great freedom to member states, because the 2020 CSRs, quite naturally, ask member states to address the consequences of the COVID-19 crisis, which they are doing anyway. The Next Generation EU fund was approved on Monday with a total EUR 750 bn budget allocated to fight the negative economic consequences of Covid-19 outbreak. Without the backing of all 27 EU member states, it cannot go ahead. Fifth, the newly calculated total euro amounts of payments are distributed over 2021-2026 according to the time profile of the adjusted initial Commission time profile for euro value payments. Altogether, the uncertainty of the overall cross-country allocation estimate of NGEU was modest. Topic: European Macroeconomics & Governance. Estimates of payments countries will receive from the Next Generation EU instrument can be made with some degree of precision. What will happen to infrastructure financing in a post-COVID world? It is time to rethink many of the basic principles of our economic model to mitigate the impacts of the COVID-19 pandemic. The same expression, “loss in real GDP”, is used for ReactEU by the Commission referring to the “share of each Member State of the total loss of real seasonally adjusted GDP expressed in EUR between the first semester of 2019 and the end of the applicable reference period for all Member States considered”. Managing that transition correctly is almost as big a challenge as spending the money itself. Let me first present the results in the four tables below and then discuss the assumptions I made for the estimations. The size of the MFF - €1 074.3 billion - will allow the EU to fulfill its long-term objectives and preserve the full capacity of the recovery plan. The initiative assumes support not only for the EU’s South, as previously speculated, but also Central Europe … The Special European Council of July 2020 defined the total amount of Next Generation EU (NGEU) commitments at 2018 prices. Date: September 24, 2020 EU many countries have started or are considering reforms to the existing fiscal rules and introduction of new ones with a view to provide a medium-term anchor, support credible long-term adjustment efforts, and ensure fiscal sustainability. For 2026, I assume a growth rate similar to 2025. The MFF, reinforced by Next Generation EU, will also be the main instrument for implementing the recovery package to tackle the socio-economic consequences of the COVID-19 pandemic. “Next Generation EU”, the vast recovery program proposed by the European Commission on May 27th, was hailed as a “Hamiltonian moment” for the European Union. This blogpost fills this gap by estimating the euro amounts of NGEU payments to each EU country in each year between 2021 and 2026. EUROPE. Lindro - Next Generation EU: between frugal countries and a rising EU budget In an interview with Italian newspaper Lindro, Policy Fellow Thu Nguyen emphazises the importance of the Merkel-Macron Recovery Fund as an important step for the future of the EU. Second, we do not know which countries will apply for loans and whether they will get the full potential amount of 6.8% of GNI. The European Commission’s original allocation mechanism really favoured lower-income countries and to a large extent was based on pre-COVID economic data. The 2014-2020 pay-out rates are based on the Commission’s ‘Regional Policy 2014-2020 EU Payment Details by EU Countries’ dataset (which includes the ERDF and CF only). Managing that transition correctly is almost as big a challenge as spending the money itself. EU budgets include two types of numbers: ‘commitment appropriations’, which are ceilings on spending promises, and ‘payment appropriations’, which are ceilings on possible payments. In order to calculate how much each country is expected to get from NGEU in each year, estimating the difference between amounts measured at 2018 prices and at current euro values requires a careful consideration for the following reasons: Thus, the annual breakdown of actual euro amounts corresponding to the European Council conclusions cannot be easily calculated by just multiplying the actual amounts from the initial Commission proposal by the ratio of the Council totals to the Commission totals because the timeframe has changed, modifying the yearly distribution of 2018 price annual figures, which impacts the actual euro figures. It also opens the door to some central tax collection. However, the Commission’s Next Generation EU (NG-EU) plan contains very innovative instruments, and even though it is meant to be temporary, it could represent a step towards reforming Europe’s institutional set-up that has long been described in the literature as ‘incomplete’ (e.g. “Next Generation EU”, the vast recovery program proposed by the European Commission on May 27th, was hailed as a “Hamiltonian moment” for the European Union. These calculations were completed for each of the seven components of NGEU grants and guarantees (RRF, ReactEU, Just Transition Fund, EAFRD, rescEU, Horizon Europe, InvestEU), because each component has a different time profile of payments. The July 2020 European Council set the following principles for assessment: “The criteria of consistency with the country-specific recommendations, as well as strengthening the growth potential, job creation and economic and social resilience of the Member State shall need the highest score of the assessment [sic]. In order to estimate country-specific yearly values, I assume that the % distribution across the years is the same for each country (but separately, of course, for each of the seven components of NGEU). Copyright © Bruegel 2015 Bruegel: Rue de la Charité 33-1210 Brussels See the methodology of these estimates here. The focus should be on worthwhile spending, not just on absorbing EU funds. Will NGEU programme design help absorption? For the largest component of NGEU, the Recovery and Resilience Facility (RRF), countries will have to prepare reform and investment proposals in their national recovery and resilience plans, which will be assessed by the European Commission and approved by the Council. In my calculations, I find that for the EU as a whole the amount of €390 billion in 2018 prices decided by the European Council for grants and guarantees will lead to €420 billion in actual euro payments. The implementation rates of CSRs have been rather poor and hence, at first sight, one might conclude that linking NGEU to CSRs will pose additional challenges. However, the Commission’s Next Generation EU (NG-EU) plan contains very innovative instruments, and even though it is meant to be temporary, it could represent a step towards reforming Europe’s institutional set-up that has long been described in the literature as ‘incomplete’ (e.g. To approximate the expected pay-out rate end-2020, I assumed that the average daily pay-out amounts from 1 January to 11 September 2020 will be made on average from 12 September to 31 December 2020. Will this freedom be enough to overcome the hurdles to EU fund absorption? A recovery from the COVID-19 recession is underway though the suffering is far from over, especially for the most vulnerable. Alongside other financial support previously mentioned, during the last plenary session at the end of May, European Commission President Ursula Von der Leyen stated:. Third, I calculate the corresponding actual euro value of commitments. To read about our cookie usage and our privacy policy click here. However, the Commission’s initial proposal planned a total amount of €250 billion of loans (at 2018 prices) to be committed by €125 billion in 2021 and 2022 each. It may be a critical juncture in achieving greater financial solidarity among member states in a time of acute economic crisis in the aftermath of the COVID-19 pandemic. Thus, the natural conclusion was that the loss in real GDP means the same for ReactEU and RFF and I used this assumption to estimate the new allocation of the RFF. In … But estimating countries' repayments up to 2058 is extremely difficult. 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