EU: Five sticking points in the budget and recovery fund talks – Politico
The US-based media outlet, Politico, outlines five sticking points that continue to impede the European Union’s (EU) negotiations on the long-term budget and recovery fund.
- Five countries — Austria, Denmark, Finland, the Netherlands and Sweden — are pushing for a lower level of spending, and in particular a reduced sum for grants in the Recovery Instrument.
- National governments need to submit detailed investment plans and win approval from the bloc before money can be allocated — a challenging process for some bureaucracies.
- Countries are also split on whether borrowed recovery money should be repaid starting in 2028 — as proposed by the Commission — or earlier.
- The Commission's proposal to distribute €310 billion of recovery funding based on a formula that would take into account unemployment between 2015 and 2019 has sparked controversy in capitals from Dublin to Budapest.
- The European Parliament and a large coalition of countries are pushing for new sources of income to help ease pressure on the size of contributions into the budget, so-called own resources.
The European leaders are working hard to reach a consensus ahead of a summit July 17-18 on the bloc's budget and recovery plans. The talks scheduled on July 8 will be closely eyed for fresh cues.
Market reaction
EUR/USD trades well bid at 1.1282, up 0.31% on the day, unfazed by the worries over the EU budget talks, as broad US dollar weakness underpins.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
