The agreement on the economic recovery plan was closed, this week, between the State-Members leaders, in Brussels. During five days of negotiation, from 17 to 21 of July, the European Council discussed the European Union’s Economic Recovery Fund, the “Next Generation EU” (NGEU) plan, which has now to be approved by the European Parliament (EP).
The EP exercised the veto right and demanded a reformulation of the plan, arguing that the cuts in fundings for the areas of R&D and youth are very significant. It is expected that in the beginning of September there will be a new debate in the EP to approve the “Next Generation EU” already reformulated.
What numbers are at stake and what implications for the ASD sectors?
The NGEU was created to help EU countries to deal with the crisis caused by the pandemic and reinforces the traditional MFF (Multiannual Financial Framework).
A total budget of around €1 trillion and €824 billion has been determined for the next seven years:
- About €750 billion to the NGEU (€390 billion as a outright grant and the remainder as a loan);
- About €1,074 trillion to the MFF.
In a macro analysis, we can see cuts in some centralized management programs by the European Commission, mainly linked to business support, but the national envelopes were practically spared.
The Community budget also started to have new priorities to be financed, such as security and defence, the environment and the digital, areas of great importance for the Aeronautics, Space and Defence Cluster, which should, despite the huge reduction compared to what was planned before the pandemic, take into account the following values for funds, in the MFF:
- Space: €13.2€ billions (no changes since Charles Michel’s last proposal)
- Defence (EDF): €7€ billions (no changes since Charles Michel’s last proposal)
- Horizon Europe: €75,9 billions (no changes since Charles Michel’s last proposal)
- Horizon Europe, in the Recovery Fund: 5€ billions (€8.5 billions reduction since Charles Michel’s last proposal)
For Portugal, €45,1 billions was the total settled amount, being that €15,3 billion will come from the Recovery Fund (NGEU) and €29,8 billions come from the MFF. As happens with all EU State-members, Portugal will have to present to the EU the strategy to recover national economy and the way in which these funds will be managed and distributed. This same strategy was presented by António Costa Silva and is now under public debate.