The European Commission’s new budget proposal for 2021 consists of three separate envelopes:
– A budget of 166.7 billion euros
– 211 billion for grants to Member states
– A specific budget of €133 billion for the Next Generation EU instrument
Next Generation EU is a temporary instrument for economic recovery that aims to mitigate the economic consequences of the current health crisis in Europe.
While respecting the constraints implied by the objectives of the European Green Deal, Next Generation EU targets the sectors that are essential to the EU’s economic recovery. This first attempt to set a budget in a 27-member Union was detailed in a press release from the European Commission.
In particular, Next Generation EU provides for €131.5 billion in loans for EU member states and €133 billion in grants to promote economic recovery after the Covid 19 crisis. Support for companies in all sectors will mobilise 8.28 billion euros. 1.19 billion – including €1.17 billion from Next Generation EU – will be invested in the health sector through the EU4Health programme.
The Horizon Europe programme, successor for the period 2021-2027 of the current Horizon 2020, will be allocated €17.3 billion (€5 billion under Next Generation EU) and will particularly support projects related to health or environmental issues.
10.13 billion will help to guarantee the EU’s supply in times of crisis through the InvestEU programme.
Cohesion policy, the second largest item of expenditure in the EU, has a budget of €47.15 billion, supplemented by €42.45 billion under REACT-EU, and will focus its efforts on employment in Europe.
Finally, the imperatives of the European Green Pact are mobilising €9.47 billion – including €7.96 billion under Next Generation EU – for the Fund for a transition to a greener Europe.
This proposal could be amended by the European Parliament and the Council, which will debate it in the coming weeks.