EU recovery fund: The battle lines

The European Commission will issue on Wednesday a new proposal for a long-term European Union budget and a coronavirus recovery fund to help economies in the bloc rebound from recession.

Both measures are controversial because they entail transfers of wealth across the 27-nation bloc, and views differ widely on how that should happen. The recovery package is also creating new faultlines because it entails financing through debt issued in the bloc's name.

Below are key points of contention that the Commission will have to address and on which EU leaders must find a compromise.

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The recovery package is to be a mix of grants, loans and guarantees that together add up to 1-2 trillion euros over the next few years. Most likely only part of this will be real cash: the rest is likely to entail financial engineering such as leveraging.

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