The European Commission is floating a €2 trillion($2.2tn/Dh7.9tn) plan for economic recovery ahead of leaders’ talks on Thursday as it seeks a way past the divisions of recent weeks.
The European Union’s 27 heads of government will hold a video conference to discuss the next steps in tackling the coronavirus pandemic after stringent lockdowns shuttered factories and halted travel, pitching the world’s largest trading bloc into the worst recession in living memory. The EU expects output to contract by as much as 10 per cent this year, according to an official.
As the losses mount, the richer northern EU members have been resisting pressure for new financing structures to help reconstruction in the southern countries hardest hit by the virus. The compromise proposal, set out in an internal commission document seen by Bloomberg News, would partially use the EU’s existing seven-year budget and also establish a new financing mechanism.
Under the plan, the EU would integrate a €300 billion recovery fund into the 2021-2027 budget and borrow €320bn euros on the capital markets. The document doesn’t say how the commission reached its €2tn total.
With more than 100,000 fatalities in the region, Europe has been hard hit by Covid-19 and the fallout from the crisis is tearing at the fabric that holds the disparate group of nations together.
France, Spain and Italy have called for the EU to introduce joint debt sales but governments such as Germany and the Netherlands have rejected so-called coronabonds over fear that they’d be stuck with the bill. The pressure to act is increasing as the costs of halting large swathes of the economy become clearer.
Germany’s public-sector deficit will widen to more than 7 per cent of gross domestic product this year due to extra spending to tackle the crisis, according to the government’s latest fiscal report for the EU. Public debt will also increase after several years of declines, rising to around 75 per cent of output with almost a third of the companies requesting wage-support aid.
Italy’s deficit could be more than 10 per cent of national output, pushing its debt-to-GDP ratio to more than 150 per cent, according to officials familiar with the government’s latest projections. Prime Minister Giuseppe Conte’s cabinet is expected to seek parliamentary approval to broaden the deficit by about €55bn, the officials said.
Spain is also considering additional pledges - to help companies pay their suppliers on time and stave off the collapse of smaller firms. The government already vowed to guarantee as much as €100bn in bank loans to help companies tackle cash-flow problems but there are concerns it won’t be enough with Prime Minister Pedro Sanchez looking to prolong a state of emergency through May 9.
Amid the contentious debate over financing a euro-area rescue package, the European Central Bank may emerge as a back door to burden sharing by absorbing the massive debt build up. Economists say that if done gradually the ECB could get around the legal ban on the central bank directly funding governments and be more palatable than the alternatives for countries such as Germany and the Netherlands.
Their concerns over how the costs of the crisis will be shared out have hampered EU efforts to organise a swift response.
The “roadmap” EU Council President Charles Michel distributed to national delegations ahead of the video conference contained no details on the amount, the specific objectives, the time frame or the nature of the investment needed to get the bloc back on track. Leaders aren’t expected to reach a decision this week and a final package may not be ready for at least six months, according to a French official.
Under the commission’s proposal, half of the funding would be given out as loans to countries while the rest would remain in the EU’s budget to cover the annual interest of about €500 million.
Other components of the proposal include:
- a temporary €300bn recovery fund in the bloc's long-term budget
- a €200bn recovery and resilience facility, retooled from an old convergence instrument
- €50bn in cohesion funds will be repurposed and front-loaded in 2021 and 2022
- two €200bn funds to protect the EU's internal markets
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ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
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THE SPECS
Engine: 3.5-litre V6
Transmission: six-speed manual
Power: 325bhp
Torque: 370Nm
Speed: 0-100km/h 3.9 seconds
Price: Dh230,000
On sale: now
Keane on …
Liverpool’s Uefa Champions League bid: “They’re great. With the attacking force they have, for me, they’re certainly one of the favourites. You look at the teams left in it - they’re capable of scoring against anybody at any given time. Defensively they’ve been good, so I don’t see any reason why they couldn’t go on and win it.”
Mohamed Salah’s debut campaign at Anfield: “Unbelievable. He’s been phenomenal. You can name the front three, but for him on a personal level, he’s been unreal. He’s been great to watch and hopefully he can continue now until the end of the season - which I’m sure he will, because he’s been in fine form. He’s been incredible this season.”
Zlatan Ibrahimovic’s instant impact at former club LA Galaxy: “Brilliant. It’s been a great start for him and for the club. They were crying out for another big name there. They were lacking that, for the prestige of LA Galaxy. And now they have one of the finest stars. I hope they can go win something this year.”
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
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Sustainable Development Goals
1. End poverty in all its forms everywhere
2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture
3. Ensure healthy lives and promote well-being for all at all ages
4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
5. Achieve gender equality and empower all women and girls
6. Ensure availability and sustainable management of water and sanitation for all
7. Ensure access to affordable, reliable, sustainable and modern energy for all
8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
9. Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation
10. Reduce inequality within and among countries
11. Make cities and human settlements inclusive, safe, resilient and sustainable
12. Ensure sustainable consumption and production patterns
13. Take urgent action to combat climate change and its effects
14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development
15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
17. Strengthen the means of implementation and revitalise the global partnership for sustainable development
