The negotiations have taken days, but this morning European leaders came to an agreement on the multi-annual budget and the corona repair fund. But what exactly did European leaders agree on? And what will it cost?
The money
First the big amounts. EUR 750 billion is lent on the financial markets by the European Commission. The member states, including the Netherlands, guarantee this amount, which means that the European Commission can collect the money at a lower interest rate. Of those 750 billion, EU countries can borrow 360 billion and 390 billion is earmarked for subsidies.
Countries must submit project proposals themselves, which are then approved by the European Commission. The Netherlands can also receive money in this way. According to initial calculations, the Netherlands is eligible for five to six billion euros.
Do we have to pay extra?
According to Prime Minister Rutte, the Netherlands ultimately does not have to pay extra for the entire package that European leaders have agreed on. The Netherlands will receive a 1.9 billion euro discount on the contribution, 500 million euros more than now.
The Netherlands is also allowed to retain more customs income. That amounts to about two billion euros. Due to its favorable location, many goods are shipped via the port of Rotterdam and Dutch customs collect money there, because it is the external border of the European Union. Initially, the European Commission wanted to keep all this money itself, but now the Netherlands is allowed to let a large part of it flow into its own treasury.
To borrow
New is that the money for the recovery fund is borrowed by the European Commission. That’s not entirely new, but it has never happened on this scale. According to Prime Minister Rutte, they are not Eurobonds, but loans for an emergency, with a limit. The recovery fund will only exist for a limited time and the loans will have to be repaid within 25 to 30 years.
Own resources
It will not be a blue envelope with European stars on it, but there will be own resources for the European Union. So money that goes directly to the European budget. From next year there will be a levy on plastic and for the future there will be levies on CO2 emissions and a so-called digitax. The European Commission will also investigate what other options there are to feed the budget with its own resources.
Emergency brake
There will be an emergency brake, referred to by some as the ‘super emergency brake’. That is an opportunity to intervene if a project does not meet the conditions or if a country does not implement reforms. At such a moment, a country can raise its finger and say that funding must be stopped. Countries can also use that against the Netherlands. Prime Minister Rutte expects that little use will be made of the emergency brake.
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