EU's flagship COVID-19 recovery cash will come late -diplomat

European Union states most hit by the coronavirus pandemic will have to wait longer for 750 billion euros meant to help restart their economies, a senior diplomat said, as a fresh spike of COVID-19 infections shuts down business on the continent again.

European Union states most hit by the coronavirus pandemic will have to wait longer for 750 billion euros meant to help restart their economies, a senior diplomat said, as a fresh spike of COVID-19 infections shuts down business on the continent again. Last July, EU leaders agreed a landmark stimulus to top up their 1 trillion euros joint budget for 2021-27 to revive economic growth ravaged by the pandemic. But the plan must still be ratified by the bloc's parliament, where some lawmakers want more spending.

"It will not be possible anymore to have the EU budget and the recovery fund in place by January 1," said the EU diplomat, who is involved in negotiations with EU lawmakers. The plan to lift Europe's economy from its deepest-ever recession caused by the COVID-19 pandemic must also be ratified by some member states' national parliaments.

"Even if an agreement would be struck within the next 14 days... ratification in member states will take between two-and-a-half and three months. And this is the most positive scenario. So we are facing delays," said the diplomat, speaking on condition of anonymity. If approved, the stimulus scheme would be a mix of repayable loans and grants, which is crucial to countries such as Spain or Italy, where the economies suffered badly from the pandemic but governments have little room to spend due to high debt.

While the money to help businesses climb out of Europe's spring coronavirus lockdown is now not expected to start flowing before mid-2021, a second wave of infection is now pushing the continent into tighter restrictions on daily lives. Just this week, France has extended curfews to around two thirds of its population and Spain is considering similar action, while Poland started turning its national soccer stadium in Warsaw into a field hospital.

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