The European Commission proposed on Thursday setting up two new financial instruments worth a total of EUR 55 billion, available from 2021 to 2027, to back structural reforms in European Union states and help members hit by financial crises , according to Reuters.
Under the plan, part of the EU’s proposed EUR 1.1 trillion budget for 2021-2027, EUR 25 billion would be made available for countries that embark on structural reforms agreed with Brussels, such as new pension plans or labor regulation.
The second facility, the European Investment Stabilization Function, would provide up to EUR 30 billion in loans to member states hit by an “asymmetric shock”, like a sudden economic crisis.
The money would help them to keep investing during periods of financial distress and could shorten or avert recessions, EU officials said.
“Around half” of all EU countries could have benefited from the facility if it had been in place during the financial crises over the last ten years, European Commission vice president Valdis Dombrovskis said.
The plan will require the approval of 27 EU member states (after Brexit).