Allocations from the EU’s proposed recovery fund should be based on the downturn in countries’ growth due to the coronavirus crisis and not on the basis of their past economic performance, according to Czech PM Andrej Babis.
“We will see the impact of the pandemic next year and this impact will be mainly in GDP. So this should be the most, the biggest criteria,” he said on Friday on arrival for a summit of European Union leaders in Brussels to discuss a joint recovery plan.
The Czech Republic “was one of the best on unemployment, one of the best-concerning debt to GDP and also we have growth – and it is not possible to penalize successful countries because they were successful,” Reuters quoted him as saying. “Money should be distributed correctly and fairly,” the PM added.
“The approval of the agreement and the EU budget for the next period is positive news for the domestic economy, as the total amount of money allocated to the Czech Republic will be higher than proposed in the original plan,” said ING Bank’s chief economist Jakub Seidler.
According to Deloitte’s chief economist for the Czech Republic, David Marek, the adoption of the recovery fund, albeit in a compromised form, is essential for the Czech Republic.
“For the Czech economy, it is fundamental that thanks to this fund, the recovery of European economies can be faster and more sustainable,” he said.
After almost five days of often tense negotiations, EU leaders reached a “historic” deal on the bloc’s long-term budget and coronavirus recovery package to the tune of €750 billion to rebuild EU economies.
The deal earmarks huge sums for providing funds to businesses to rebound hurt by the economic collapse caused by the COVID-19 pandemic, roll out new measures to reform economies over the long haul, and invest to help protect against “future crises”.
The European Commission will borrow the money on financial markets and distribute just under half of it — €390 billion — as grants to the hardest-hit members of the bloc, with the rest, provided as loans.
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