Calls are mounting for the EU to roll over €650 billion in Covid recovery debt. But will ‘frugal’ countries, including Germany and the Netherlands, lift their veto?
Debt is typically meant to be paid back. But a growing number of EU leaders think that, in one important instance, it doesn’t need to be – at least not yet.
Over the past few weeks, multiple European policymakers have openly floated the idea of delaying repayment of the €650 billion Covid recovery fund, which the EU is due to begin paying down when its next seven-year budget enters into force in 2028.
Agreed at the height of the pandemic in 2020, the one-off fund offers EU capitals loans and grants in exchange for growth-boosting reforms. Roughly €24 billion per year, or one-fifth of annual EU expenditure, is currently earmarked for repayments in the bloc’s next long-term budget, formally known as the Multiannual Financial Framework (MFF).
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