The summit lasted three days longer than it was expected. An agreement was reached on Tuesday 21st about the €750 billion to be made available to countries to counter the effects of the COVID-19 crisis on the economy. The recovery fund will be given out as grants and loans to countries who were hit the hardest by the COVID-19.
Of the €750 billion available, €390 will be given out as grants to countries who were the most severely affected by the COVID-19 and €360 worth of low-interest loans. This fund's aim is to help countries recover from economic pitfalls caused by the COVID-19 health crisis. Spain and Italy are expected to be the main recipients of the grants. The next steps involve getting the deal approved by the European parliament.
According to the European Commission's prediction, Italy could receive up to €81,8 billion in grants, Spain €77.3 billion, France €39 billion, Poland €38 billion. Other countries which could be eligible for grants are Greece, Germany, Romania and Portugal.
European countries have, for the most, already elaborated roadmaps to recover economically from the COVID-19 crisis and bounce back with the least collateral damage possible. Oxford Economics and McKinsey estimate that Spain's GDP could fall to 13.5% and therefore, by 5%. As a result, the Spanish government stimulus packages to businesses as well as credit lines, amongst other measures. According to El Pais, a renowned Spanish news outlet, the government is planning to invest €150 billion in 2021 and 2022 which, they are hoping, will draw €500 billion investment from the private sector. Spanish authorities are hoping to gain access to the €750 billion recovery fund to achieve these plans and are finalizing their plans to send to the European Commission.
Italy's economy is expected to collapse by 10% in 2020, one of the most affected economies in Europe. Indeed, the European Commission predicts that Italy will have the highest public financing deficit in the Eurozone. The authorities have invested €900 million in a first time to help fund the suspension of mortgages and payment of financial aid to businesses, self-employed individuals and other measures to help support vulnerable groups and sustain the economy. Later on, €3.6 billion was voted to support the country's economy. Furthermore, Italian authorities have also announced a series of measures to relaunch the economy. It is also hoping to benefit from financial assistance from the EU's recovery fund.
