Michael Fitzmaurice (Roscommon-Galway, Independent)
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83. To ask the Minister for Finance the funds that can be borrowed from Europe from the Covid-19 fund to bridge the deficit due to the Covid-19 crisis; and if he will make a statement on the matter. [16467/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I understand the Deputy is referring to the proposed “Next Generation EU” recovery fund. As the Deputy will be aware, on 10th July, the President of the European Council, Charles Michel, published his latest compromise proposal for the 2021-2027 Multiannual Financial Framework (MFF) and the “Next Generation EU” recovery fund, in the hope agreement can be reached at the upcoming European Council on 17-18 July.

The total amount being proposed for the period 2021-2027 is €1.824 trillion in commitments (in 2018 prices) - €1.074 trillion for the MFF and €750 billion for the "Next Generation EU" (€500 billion in grants and €250 billion in loans).

It is proposed that the “Next Generation EU” financing will be raised by “temporarily” increasing the Own Resources ceiling to 2.00% of EU Gross National Income (GNI) allowing the Commission to borrow €750 billion on the financial markets to fund measures over the period 2021 - 2024. €500 billion of “Next Generation EU” financing will be in the form of grants to Member States, with the remaining €250 billion as loans. This additional funding to be channelled through EU Budget programmes, will be repaid back between 2026 and 2058 drawing on future EU Budget contributions from Member States or the Own Resources of the Union.

The European Commission produced a needs assessment underpinning the proposed “Next Generation EU”. In this needs assessment the European Commission estimate that Ireland’s contributions to the Next Generation EU package would be the second highest in Net % GDP terms in the EU - with an allocation of 0.4%. They estimate that Ireland may potentially receive a total of up to €2 billion in grants, with a further €1 billion in loans available should Ireland decide to borrow same.

There is now considerable time pressure on European Council to reach political agreement (requiring unanimity) on the revised package of both MFF and recovery fund before the end of July to facilitate negotiation with and consent from the European Parliament in time to ensure that the next MFF can come into operation from 1 January 2021.

Heads of State and Government will discuss the revised MFF and Next Generation EU proposals at European Council on 17 and 18 July, with the aim of reaching an agreement. The Taoiseach will be attending the Council summit to negotiate on behalf of Ireland. It would not be appropriate for me to comment further in advance of the upcoming European Council negotiations.