Next Generation EU

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Next Generation EU (NGEU) is a European Commission economic recovery package to support the EU member states to recover from the COVID-19 pandemic, in particular those that have been particularly hard hit. It is sometimes styled NextGenerationEU and Next Gen EU, and also called the European Union Recovery Instrument.^[1] Agreed in principle by the European Council on 21 July 2020 and adopted on 14 December 2020, the instrument is worth €750 billion roughly equally split between grants and loans. NGEU will operate from 2021 to 2026,^[2] and will be tied to the regular 2021–2027 budget of the EU's Multiannual Financial Framework (MFF). Money borrowed by the EU to fund the grants will be repaid using EU's own resources until 2058.^[3] The comprehensive NGEU and MFF packages are projected to reach €1824.3 billion,^[4] so NGEU effectively doubles the EU budget while operational. It is a revolutionary EU instrument in many aspects: size (the largest EU fund so far), leverage of the grants for reforms, and novel methods of financing^[5] and grant allocation.

The program is very large (just the grant portion of NGEU is twice bigger than the Marshall plan^[6]) and redistributive (NGEU favors the south of the block: Italy and Spain get the largest shares, while Greece is the leader in per-capita allocations, at almost 20% of its GDP^[3]).^[7] The grant portion of NGEU is approximately 3% of EU's GDP.^[6] Similar to the Marshall plan, NGEU is conditional, however it targets investment and public services, not stabilizing the budgets and promoting trade.^[8] 37% of the funds are intended for the green transition and additional 20% for digital economy.^[6]