EU Mulls over France’s Offer to Fuel Growth with more Debt

<p>Paris offered European Commission to issue bonds in order to finance the European Union Recovery Fund. Proposed pace of the issue – 150-300 billion euros per year conducted through the period of 2021-23. “The size should be at least 1-2% of EU GNI per year over the next three years, which will provide the EU budget with extra funds of 150-300 billion euros per year between 2021 and 2023,” the French document says.</p>
<p>EU discusses how to support economic growth after recession due to coronavirus. The European Commission should make an official proposal for a new joint budget for all 27 participating countries for 2021-27 and an associated recovery fund over the course of May 18th week.</p>
<p>“Loans provided to member countries could help fill spending gaps, but they should remain as addition to grants. To ensure maximum efficiency, such loans should have a grace period, a very long repayment period and a low interest rate … It’s also very important, so that this fund is established as soon as possible, possibly before the next long-term budget plan comes into force”.</p>
<p>The main implication for this move – possible upside in EU equities, especially if the EU commission will accept this solution.</p>
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