https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔎" title="Nach rechts zeigende Lupe" aria-label="Emoji: Nach rechts zeigende Lupe">After reading the 68 pages of Council conclusions, here are m 2 cents on the #EUCO #NextGenerationEU deal 1/
The total amount of funds available under #NextGenerationEU remains 750bn as in the original EC proposal, but the composition changes: grants fall from 500bn to 390bn while loans increase from 250bn to EUR 360bn. But the composition of cuts matter 2/
HorizonEU (research), cut by 62%; InvestEU cut by more than 80%; Just Transition Fund slashed by 2 thirds; 3 programs completely de-funded, among which Solvency Instrument, that could have allowed for EU-level solvency aid to firms in countries that could not afford it 4/
Conditionality: countries will need to start paying attention to the EC& #39;s country-specific recommendations (CSR), as that will be the benchmark against which national spending plans will be assessed under #NextGenerationEU. That means structural reforms. 6/
Governance: EC& #39;s assessment of plans needs approval by Council at qualified majority (QMV, 15 countries for at least 65% of population), in 4 weeks. Fortunately https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇳🇱" title="Flagge der Niederlande" aria-label="Emoji: Flagge der Niederlande"> call for veto did not go through: veto on plan + CSR would have made this look very much like an ESM programme. 7/
Disbursements is where emergency brake comes in. The assessment of milestones achievement is done by EC, but in "exceptional" cases 1 or more members can ask for referral to the Council if they consider that there are "serious deviations from the satisfactory fulfilment". 8/
This gives to some the chance to slow down disbursement process, but not to stop it, as ultimately the Commission prevails (as outlined by the sentence: "process will be in line with Article 17 TEU and Article 317 TFEU"). We dodged a bullet and Rutte can spin this electorally. 9/
Rebates: https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇳🇱" title="Flagge der Niederlande" aria-label="Emoji: Flagge der Niederlande">https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇦🇹" title="Flagge von Österreich" aria-label="Emoji: Flagge von Österreich">https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇸🇪" title="Flagge von Schweden" aria-label="Emoji: Flagge von Schweden">https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇩🇰" title="Flagge von Dänemark" aria-label="Emoji: Flagge von Dänemark">and all get increased rebates. Per year they will get: 1.9 bn for https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇳🇱" title="Flagge der Niederlande" aria-label="Emoji: Flagge der Niederlande">, 1.1 bn for https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇸🇪" title="Flagge von Schweden" aria-label="Emoji: Flagge von Schweden">, 565 mn for https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇦🇹" title="Flagge von Österreich" aria-label="Emoji: Flagge von Österreich">, 377 mn for https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇩🇰" title="Flagge von Dänemark" aria-label="Emoji: Flagge von Dänemark">. The German rebate is unchanged at 3.7 bn per year. Rebates total around 53 bn over the seven-year budget period. who pays? 10/
In the past, https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇫🇷" title="Flagge von Frankreich" aria-label="Emoji: Flagge von Frankreich"> https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇮🇹" title="Flagge von Italien" aria-label="Emoji: Flagge von Italien"> and https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇪🇸" title="Flagge von Spanien" aria-label="Emoji: Flagge von Spanien"> have been paying respectively 30%, 22% and 15% of all rebates. If this stays the same, https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇫🇷" title="Flagge von Frankreich" aria-label="Emoji: Flagge von Frankreich">would be liable for ~16 bn (~2bn per year); https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇮🇹" title="Flagge von Italien" aria-label="Emoji: Flagge von Italien"> for ~11bn (~1.6 per year); https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇪🇸" title="Flagge von Spanien" aria-label="Emoji: Flagge von Spanien"> for ~8bn (~1.1bn per year). For https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇪🇸" title="Flagge von Spanien" aria-label="Emoji: Flagge von Spanien"> and https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇮🇹" title="Flagge von Italien" aria-label="Emoji: Flagge von Italien"> this lower the net fiscal transfer effect 11/
Conclusion:

This remains a positive steps for https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇪🇺" title="Flagge der Europäischen Union" aria-label="Emoji: Flagge der Europäischen Union">integration because it overcomes 2 historic taboos: (i) opposition to large size common issuance; (ii) opposition to explicit fiscal transfers (even if temporary). 12/
Conclusion:

However it comes at a cost. First, the increase in rebates perpetuates and worsens a problem that we know from before this MFF. In particular, Germany could have accepted a decrease in its rebate to compensate for the frugals& #39; demands but did not. 13/
Conclusion:

Second, the cuts to grants are concentrated on programs that would have paid for genuine EU-level public goods and hence could have help create a bridge from #NextGenerationEU towards something permanent and federal. This is a negative for the longer term imho 14/
Overall, given where we were in March and where this #EUCO had started, this is certainly a positive and major development. At the same time, there are shadows that probably make it less ambitious (especially over a long-term integration horizon) than initially expected. end/
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