Finance

Roadmap to 6 billion EU aid: cut harder in mortgage interest deduction

In addition, the formation has finally started. And there is a lot of negotiation about the plan, by the same parties who did not want to make a decision about it last year.

They have to now, because the plan must be submitted in Brussels before the summer of next year. This is necessary because the Commission needs about two months to analyze the plans.

After that, the other EU member states must also agree to the Dutch proposal. This must all be done before December next year, because the agreement is that 70 percent of all subsidies have been distributed by then.

5. Are reforms the only stumbling block?

No, not exactly. Countries also need to have a well thought-out plan for what to do with the money. At least 37 percent of the amount must be spent on plans that bring the climate goals closer.

And another 20 percent should go to digitization. In addition, the plans should combat inequality in society.

To make it a little easier, the plan may also include measures that have already been taken, as long as they are from after 1 February 2020. The plans must be implemented in policy by the summer of 2026 at the latest.

To complicate matters again, these should not involve plans that cost structural money, but the investments must have a long-term effect.

Ministry officials have prepared a list for the negotiators to choose from. Choosing measures that have already been taken and for which the government has already allocated money, has a major advantage. If the plan is approved, the money from Brussels can be used for something else, Hoekstra explains.

6. Well, then there is a plan: will we get the 6 billion then?

Again the answer is negative. Most of the money is not transferred until the goals are met. A receipt for the costs incurred is therefore not sufficient.

7. And if we don’t submit a plan, does it matter?

Submitting our plan ‘helps to determine the credibility’ with which we can ‘critically’ assess the plans of other countries, Hoekstra writes himself. In other words: we will be in awe if we do not submit a plan ourselves, after we have hammered away on strict conditions.

In addition, it is of course a waste of the 6 billion euros. That comes after some detours from European taxpayers.

The European Commission distributes the billions, but borrows them itself on the financial markets. In order to be able to repay all the loans by 2058, the Commission wants to raise more money with new EU taxes.

For example, the tax on plastic waste introduced this year and a tax on tech giants to be introduced in 2023. The individual member states guarantee the multi-billion dollar loans through their contribution to the European budget. Last year, the Netherlands transferred almost 9 billion to the Commission.

8. Why do we actually get ‘only’ 6 billion, less than 1 percent of the total amount?

There are two reasons for this. First of all, the Netherlands can borrow money very cheaply and it is therefore ‘not obvious’ that we will make use of the option to borrow money from the emergency fund, says Hoekstra. An amount of 360 billion is available for this, from which the Netherlands will therefore receive nothing.

In addition, the hardest hit countries receive the most money. This is calculated on the basis of, among other things, unemployment during the corona crisis, how hard the economy was hit and the average income per inhabitant.

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