The European Commission has unveiled a €750bn ($826bn) economic recovery package, with a focus on “rolling out renewable energy projects, especially wind and solar, and kick-starting a clean hydrogen economy in Europe”.
The package, called "Next Generation EU", is apparently based around the European Green Deal, a plan to make the EU carbon-neutral by 2050, but few details have so far been revealed.
Among the snippets of information unveiled so far are an extra €15bn to generate investments that "boost the resilience of strategic sectors, notably those linked to the green and digital transition", one million new electric-vehicle charging points, and up to €40bn to strengthen the Just Transition Fund "to assist member states in accelerating the transition towards climate neutrality".
“The recovery plan turns the immense challenge we face [from the coronavirus pandemic] into an opportunity, not only by supporting the recovery but also by investing in our future: the European Green Deal and digitalization will boost jobs and growth, the resilience of our societies and the health of our environment," said European Commission president Ursula von der Leyen.
The funding — which will consist of €500bn of grants and €250bn of loans — will controversially come from borrowing in the financial markets, and will not be paid off until at least the year 2058, with the first repayments not until after 2027. It would be a massive addition to the EU budget of €1.1trn for 2021-27 and will need to be approved by the 27 member states, as well as the European Parliament. The commission is asking for the deal to be signed off "by July", after a planned EU summit of member state leaders on 17-18 June.
Tough negotiations may be ahead as Sweden and Denmark have already expressed opposition to the current plans.
"Sweden has all along pushed for the fund to be focused on loans, which provide a stronger incentive for the money to be used efficiently,” said Swedish prime minister Stefan Lofven. "There is a risk that there will be a sharp increase in what Sweden pays to the EU."
And Danish foreign minister Jeppe Kofod said the €750bn was too high that a “slim and modern budget” was needed.
All new funding is to be channeled through existing EU programmes, including an additional €61.3bn for the Strategic Investment Facility and an extra €14.5bn for the Horizon Europe research and innovation fund. The bulk of the new money will be distributed through a new Recovery and Resilience Facility of €560bn, "which will offer financuial support for investments and reforms, including in relation the green and digital transactions and the resilience of national economies".
"Relaunching the economy does not mean going back to the status quo before the crisis, but bouncing forward," said the commission. "We must repair the short-term damage from the crisis in a way that also invests in our long-term future."
Giles Dickson, chief executive of WindEurope, said the proposals were "excellent".
"It’s clearly going to be a green recovery. And a boost for the energy transition. The Strategy singles out wind energy as one of the 'policy fundamentals of the recovery'. The EU wants wind to be half of Europe’s electricity by 2050. That means huge investments, jobs and growth. Wind is ready to deliver. We look forward to the detailed proposals that’ll help make these investments happen."
More details about the Next Generation EU plan are expected to be revealed soon.
A leaked report last week suggested that the commission was planning to hold 15GW of renewables tenders over the next two years as part of the stimulus plans, along with a new carbon contracts for difference scheme, but these have not been confirmed.
UPDATE: Adds reactions from Swedish and Danish governments