A European agreement helps clear the way to spend stimulus money.


The European Union and its 27 member states are moving closer to deploying its landmark stimulus package worth 750 billion euros, or $890 billion, to help them out of the deep recession the pandemic is inflicting on the bloc.

On Tuesday, negotiators from the European Council, which represents the members’ national governments, and the European Parliament reached a political agreement on a number of sticking points that had put the brakes on the swift deployment of the money.

Among the issues: how the money should be spent, whether there would be extra funding for some of the Parliament’s dearest programs and whether stimulus funding should flow to members like Hungary and Poland that are ignoring bloc’s rule-of-law standards.

The stimulus package is part of the E.U.’s multiyear budget, which is always the subject of haggling and horse-trading among the various institutions that govern the bloc.

It will see member states, through the European Commission, the bloc’s executive branch, introduce large-scale joint borrowing for the first time, a significant step toward becoming a closer, more federal-type organization with pooled resources and joint debt.

But the stimulus program isn’t finalized yet: It needs to get the approval of each individual European Union government, in many cases by being ratified in national parliaments. Prime Minister Viktor Orban of Hungary, who is at loggerheads with the European Union over criticism of his handling of democratic institutions, has threatened to block the program, although experts and observers say he is bluffing.

The bloc’s leaders hope the funds will come online early next year to start plugging holes in desperately needed areas of European economies, in particular smaller or weaker ones that cannot raise their own major stimulus packages, as Germany and France have.

The economy of the European Union, the richest group of nations in the world and home to 410 million people, is expected to shrink on average by 7.4 percent this year, before staging a recovery next year. That recovery, experts and policymakers warn, is highly dependent on continued government spending and could be upended by another wave of coronavirus cases, as most of the bloc languishes in a new lockdown after a surge in infections over the fall.



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