Abstract

EU Next Generation-Europe’s recovery and resilience plan, expresses a massive intervention in the economy of the Member States, which involves direct transfers to them, in addition to repayable loans, and the consequent recognition of the Union’s ability to borrow in the financial markets and, consequently, to incur debt. A proper fiscal capacity of the EU has been created, not primarily fed by contributions of the Member States, or by new European taxes, but by the issuance of bonds. The reason of being and existing of this temporary recovery plan is the need to complement the economic and financial measures adopted by Member States, given the enormous impact of pandemic and the inability of many of them to cope with the situation on their own. Such complementary mobilisation of funding ensures that the internal market is not undermined by disparities in the ability of Member States to mobilise funding, and provides, in a spirit of solidarity, funding to those countries where fiscal space for discretionary spending is limited. In addition, it ensures that spending is carried out based on a coherent economic strategy coordinated between the Member States and promoted by the European Union’s institutions.