COVID-19 update 33 – 18-24/07/2020
After almost five days of negotiations, the Member States of the European Union have agreed to a deal on the Multiannual Framework for 2021-2027, the EU’s next budget, and the EU’s COVID-19 Recovery Plan, dubbed “Next Generation EU” (NGEU). NGEU will remain worth €750 billion as proposed in May 2020 but will now be composed of grants worth €390 billion and loans worth €360 billion. The MFF has slightly decreased from the May 2020 proposal of €1,1 trillion to €1,07 trillion. Notable reductions to the MFF include a 56% funding reduction to the Just Transition Fund, a core pillar of the European Green Deal. Reductions have also been applied to InvestEU, health, migration and external action programmes (Sources: DeHavilland, Politico).
The deal still needs to pass the European Parliament where it has met some resistance. Johan van Overtveldt, chair of the Parliament’s budget committee, has stated that the Parliament could not accept the low ceilings of for the next regular budget in the deal which would mean “renouncing to the EU’s long-term objectives and strategic autonomy” (Source: Politico).
The Council of the European Union has formally adopted the decision to postpone the VAT e-commerce package by 6 months to 1 July 2021 instead of 1 January 2021. The decision was first announced by the Commission in June in the context of the disruption caused by the Covid-19 pandemic.