Europe's spending burdened by interest rates

2023-05-11T16:06:53.300Z

Highlights: The European Parliament is sounding the alarm on the Union's finances. Meeting in plenary session in Strasbourg, it adopted a report advocating the adoption of new resources. To date, 6.5 billion euros of revenue per year are already secured, subject to the validation of the Council. It will take 15 to 20 billion euros per year from 2028 to repay the recovery plan. It now borrows at higher costs than France. In the 2021-2027 multiannual budget, 15 billion euros were planned to pay the debt burden.

DECRYPTION - To date, 6.5 billion euros of revenue per year are already secured, subject to the validation of the Council, while it will take 15 to 20 billion euros per year from 2028 to repay the recovery plan.

The European Parliament is sounding the alarm on the Union's finances. Meeting in plenary session in Strasbourg, it adopted Wednesday by 356 votes to 199 a report advocating the adoption of new resources, in order to repay the debts contracted during the post-Covid recovery plan to 750 billion euros (Next Generation EU).

This unprecedented fund, born under the impetus of Emmanuel Macron and Angela Merkel, broke for the first time the taboo of debt mutualization. The virtuous idea was to allow the most indebted States, such as Italy or Spain, penalized by higher rates, to benefit from the very favourable borrowing conditions of the European Union. Now, after the inflationary surge, the European Union is also caught up by the rise in rates.

It now borrows at higher costs than France. In the 2021-2027 multiannual budget, 15 billion euros were planned to pay the debt burden, a sum calculated on a rate that...

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Source: lefigaro

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