Spain’s prime minister Pedro Sánchez will propose the creation of a European recovery fund of up to €1.5 trillion at an upcoming meeting of the European Council. He said Europe should use perpetual debt to help countries recover from an unprecedented economic shock that threatens to inflict long-term damage on the continent. The amount to be lent should be measure on the impact of the pandemic on each country rather than on their income. Criteria for the amount to be lent could include the fall in GDP, the proportion of people infected or the total job loss figures. Sanchez went on to propose that repayment of the interest on the debt could be made through a new set of European taxes in the member countries. Spain will request that the transfer of funds be charged in advance to begin on January 1, 2021 and that it be deployed over the next two to three years to boost the economy of the affected countries.
