A €750 billion ($858.1 billion) coronavirus recovery fund for the European Union is being welcomed by money managers.
Following four days and nights of negotiations, EU leaders came to an agreement late Monday on a recovery package and a 2021 to 2027 budget to help member states rebuild their economies after the COVID-19 pandemic. The package of stimulus will also support investment in transitions toward green and digital economies.
The total €1.82 trillion in stimulus includes a long-term EU budget; the multiannual financial framework; and "an extraordinary recovery effort," the Next Generation EU instrument or recovery fund.
The €1.07 trillion MMF covers the period 2021 to 2027, and is "the main instrument for implementing the recovery package to tackle the socio-economic consequences" of the pandemic, said a document outlining the agreement and published on the European Council's website.
The €750 billion recovery fund falls under the Next Generation EU part of the package. It allows the European Commission to borrow up to this amount on the markets, to be repaid by 2058. From that fund, €390 billion will be distributed as grants to member states and the remaining €360 billion as loans, the document said.