EU to add €6bn to 2020 budget to cover Covid costs

11 Sep 20

European leaders have approved a €6.2bn increase to this year’s EU budget to fund the development of Covid-19 vaccines and address other effects of the pandemic.

 

The updated budget includes €1.09bn for the creation and distribution of a vaccine, and the EU will use this money as a down-payment for pre-ordering doses.

The other €5.1bn will cover additional ‘cohesion funding’, the EU’s name for money it uses to support the development of its poorer member countries.

These countries need more help than was expected when the budget was set, because of the impact of the virus.

The European Council, which is made up of the 27 heads of state and sets the union’s policy direction, approved the move, and if the European Parliament agrees a position during its 14-17 September plenary, the changes will be confirmed.

Euro area finance ministers met in person on Friday, for the first time since February.

“We assessed our economic situation and our budgetary response,” said head of the group and Irish finance minister Paschal Donohoe.

“The positive news is that after the euro area bottomed out in April and May, we saw a significant rebound in activity in June and July.

“We are all aware of the huge apprehension, the great concern that so many millions of citizens face; and we accept that it will take time and it will take work to undo the damage caused by this crisis.”

Donohoe said throughout the euro area there will be “no policy cliff edge”, and that budgetary support for the economy will continue long into the recovery, although some crisis schemes will expire or wind down.

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