EU recovery plan would create unsustainable debt levels, says Czech PMChristian Fernsby ▼ | May 29, 2020
Czech Prime Minister Andrej Babiš is raising concerns about a proposal from the European Commission to provide EU member states with €750 billion for economic recovery from the coronavirus pandemic, with €500 billion used as direct payments and the remaining €250 billion as loans.
Prime Minister Andrej Babiš
Babiš considers the indebtedness to be far too high, and says he will strive for a share of the funds' flow to weaker economies.
According to him, investment and slow pace of convergence are the key to kick-start the EU's growth again. That is why he will call for maintaining the current formula for allocating the EU budget.
He also believes that the EU should borrow only as much money as the economic downturn represents, which he estimates to be at 10 to 15 percent.
"The Commission proposes to increase the budget by €750 billion and that is simply too much. It is almost three-quarters of the current seven-year budget. We do not know exactly what the repayment schedule will be, just that the amount should be repaid by all member states in 30 years after 2027. The total amount of the budget proposed by the Commission is, in my opinion, too large," he explained. ■