You are in:

Extraordinary European Council on Recovery Fund and Multiannual Financial Framework

"Europe has stood up to an historic challenge and found a response with an historic agreement", says Pedro Sánchez

Brussels (Belgium), Tuesday 21 July 2020

"Europe had to reach an agreement in July, and Europe has indeed reached an agreement", underlined Pedro Sánchez. "This has been a tough negotiation process, in which we have been immersed for some extraordinarily complicated months, and with a final stretch that has been as extenuating as it has been successful. Europe stood up to an historic challenge and found a response with an historic agreement", declared the President of the Government at the close of the Summit.

The agreement is comprised, in the first place, of a great Recovery Fund of 750 billion euros, called "Next Generation EU". The aim of the Fund is to mobilise a massive amount of European public resources so that the recovery, following the COVID-19 crisis, can be as swift and strong as possible. This recovery must be based on three pillars that allow for strong, balanced and sustainable growth - the digital transition, the ecological transition and the training of students and workers.

In short, a green and digital recovery and better human capital, for a competitive, inclusive and sustainable economy.

Of the 750 billion euros of the "Next Generation EU", 360 billion will be given over to loans and 390 billion to transfers, which will be granted according to the impact of the pandemic.

Foto: Pool Moncloa/Fernando Calvo y Pool Consejo EuropeoIn order to mobilise all these resources, which amount to the equivalent of 4.6% of the European Gross Domestic Product (GDP) in 2019, the European Commission will go into debt, for the first time ever, to finance programmes. This is a huge step towards the European construction, in line with the magnitude of the social and economic crisis caused by COVID-19.

During the negotiations, the Government of Spain has managed to obtain approximately 140 billion euros over the next six years - more than 11% of our country's GDP, of which 72 billion will be in transfers.

The approval of the cohesion funds in the 1990s helped boost European integration and played a major role in the economic development of several EU countries. "If the cohesion funds meant the equivalent of 7.8 billion euros for Spain back then for a six-year period, what we have approved today amounts to almost 73 billion euros for our country - almost 10 times more in the size of those cohesion funds, which were so important for the progress and prosperity of all Spanish people", said Pedro Sánchez.

This extraordinary boost to pooled resources by the European Union to make our economies sounder, greener and more modern completes what the European Budget does in other core areas for European policies, such as the Common Agricultural Policy and the cohesion funds, which have once again proven to play an essential role in the pandemic.

Allocations under the main programmes

The Recovery and Resilience Facility will be allocated 672.5 billion euros - 312.5 billion in transfers - of which 59 billion correspond to Spain. Thanks to this programme, a national reform and investment plan will be implemented for the growth and transformation of our economy, in such areas as the ecological transition, the digital transformation, education and to improve social protection.

The ReactEU Programme will have an allocation of 47.5 billion euros, of which 12.4 billion correspond to Spain. This new programme is fundamental for tackling the economic and social consequences of the crisis.

The Multiannual Financial Framework

Foto: Pool Moncloa/Fernando Calvo y Pool Consejo EuropeoThe European Union Budget for the next seven years will amount to 1.74 trillion euros, a very significant and ambitious amount, taking into account the new context and that this is on top of the Recovery Fund.

As regards the Common Agricultural Policy, the final allocation, which includes the European Agricultural Fund for Rural Development and the European Agricultural Guarantee Fund, has been raised by almost 2 billion euros for the next seven years

Since the start of negotiations, the government has advocated an allocation that is sufficiently large and ambitious to help our agricultural sector, which is tackling the volatility of the international market and a growing number of ecological demands. That is why a substantial part of our national recovery and resilience plan will be allocated to rural development. "Today Europe lays the foundations to offer a response to the crisis that Europe is suffering from at this time - the COVID-19 crisis. And without losing sight of the future, without forgetting the changes that must be addressed, such as the ecological and digital transition, and the training of our children and workers", said Pedro Sánchez.

"Europe is setting out on a path towards a great change, a great modernisation. We have gained momentum to place Europe at the forefront of the digital and green revolution, and of social and territorial cohesion, without leaving anywhere or anyone behind. Leadership and inclusion. This is the task we are called to as Europeans. European leadership, which is more necessary than ever at this time in the world", added the President of the Government.

For the President of the Government, "today will be a day to be remembered among the most noteworthy chapters of the history of the EU. Today all Europeans have come out victorious and the European Union is much stronger".

Non official translation