The European Commission confirmed on Monday (31 May) that it will start borrowing the €800 billion needed to finance the recovery fund in June, after all member states gave their approval to the issuance of EU debt which is on an unprecedented scale.
As planned, the 27 national parliaments completed by the end of May the ratification process of the Own Resources Decision, the EU legislation that allows the Commission to issue EU debt to finance the recovery fund.
Gert Jan Koopman, responsible for the directorate general of Budget at the Commission, said on Monday that all member states completed the final details of the ratification process and the EU executive will go to the markets in June.
All 27 #EU Member States have now approved the Own Resources Decision – the piece of legislation that makes it possible for @EU_Commission to borrow for #NextGenerationEU – and notified @EUCouncilPress.
Borrowing for the recovery can now start as of June!🇪🇺💪 pic.twitter.com/HsaH1zZIPc
— Gert Jan Koopman (@GertJanEU) May 31, 2021
The institution is expected to borrow between €30 billion and €40 billion before the summer break, and around €150 billion per year by 2026.
The first transfers of the recovery funds, a total of 13% of pre-financing (around €104 billion), is expected to start flowing to national capitals by the end of July, once the Commission approves the reform and investment proposals submitted by the national governments to unlock the resources.
To date, a total of 21 member states have submitted their recovery plans: Belgium, Denmark, Germany, Greece, Ireland, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Austria, Poland, Portugal, Slovenia, Slovakia, Finland, and Sweden.
The Commission is expected to green light the first plans by the end of June, and the Council will have an additional month to give their approval based on the Commission’s verdict.
Member states tried to shorten the Commission’s two-month assessment process, given that the Commission has been discussing the draft plans with some governments since last October.
The EU executive however said that it will exhaust all the time stipulated in the recovery facility legislation, given the immense amount of information submitted by national treasuries and the need to translate each recovery plan into legal instruments.
[Edited by Benjamin Fox]