The first tranches of Covid-19 stimulus funds should be available to member states by mid-year, European Commission president Ursula von der Leyen said after the European Parliament approved the landmark €750 billion joint borrowing plan.
Governments of countries whose economies have been hardest-hit by the pandemic such as Greece, Spain and Italy are keen to start receiving funds from the Next Generation EU programme as soon as possible to support an economy recovery.
National governments must draw up investment plans for approval by the commission on how they will use the funds, which must be in line with EU goals of digitalising economies and reducing carbon emissions.
Ireland was the only EU economy to grow in 2020 and is in line for a very small proportion of the funds, which are weighted towards the bloc's most vulnerable economies and those hardest-hit by the pandemic. The Government has said that the Republic will be a net contributor overall to the plan, but that Ireland's economy depends on an overall EU recovery.
It comes as the EU revised down economic forecasts for the coming year as the pandemic drags on, and warned of risks that the outlook could worsen depending on the success of vaccination rollouts and whether resistant strains of Covid-19 emerge.
The aim of the bloc is to vaccinate 70 per cent of adults by the end of summer, which Dr von der Leyen defined as September 21st – the autumn equinox, commonly used as a seasonal marker in her native Germany.
The stimulus plan, which was agreed by EU leaders last July but must still be ratified by national parliaments, allows the commission to borrow on financial markets and issue funds to member states in a mix of grants and loans.
Dr von der Leyen said the commission would immediately seek loans on financial markets as soon as national parliaments granted it the power to do so, and that 13 per cent of the money could be quickly issued to member states as front-loaded funds.
“The moment the ‘own resources’ decision is ratified, the commission will go to the markets,” Dr von der Leyen said. “By mid-year, we should be able to disperse the first funds.”
She spoke alongside Portuguese prime minister António Costa, who leads the rotating European presidency, in a press conference marking the approval of the plan by the European Parliament. He described the Covid-19 pandemic as "the most serious economic challenge facing Europe since the second World War".
Dr von der Leyen predicted there would be difficulties as well as successes to come as the plan is rolled out. But she defended the EU’s joint vaccination procurement, saying that the alternative would be uneven distribution of doses between member states competing against each other.
“Looking back, we underestimated the lack of capability to scale up in the manufacturing process speedily for the pharmaceutical companies. And, looking forward, I think we can also still reduce the time in the regulatory process for approving the vaccines in the market,” she said.
Asked about the use of Article 16 two weeks ago in an initial version of a Commission regulation, a blunder that has undermined Northern Ireland’s delicate post-Brexit arrangements, Dr von der Leyen declined to say who had made the decision or what changes she might introduce to prevent future mistakes.
“We should not have even thought about including the Article 16 but in the very end, and this is the most important, the result was a good one, which was another way, so we had the right decision,” Dr von der Leyen said.
“In general, whatever happens in this commission, whatever is the result of the work of this commission, I take the full responsibility.”