No COVID recovery cash without reforms, EU executive warns

European Union countries must step up economic reforms and tackle investment bottlenecks to get their share of billions of euros of COVID recovery funds, an official with the bloc's executive said on Wednesday.

European Union countries must step up economic reforms and tackle investment bottlenecks to get their share of billions of euros of COVID recovery funds, an official with the bloc's executive said on Wednesday. The Brussels-based European Commission is due to borrow an unprecedented 750 billion euros ($900 billion) that it intends to channel into the 27 EU economies to help them rebound from a record recession triggered by the pandemic.

National capitals have until the end of April to submit their spending plans to the Commission for approval. None of the plans submitted so far meet the executive's criteria, said Celine Gauer, a senior Commission official dealing with the stimulus, which would come on top of 1.1 trillion euros of handouts from the EU's 2021-27 budget.

The EU executive hopes the money will help to narrow a wealth gap in the bloc that the epidemic has widened, and is making the payouts contingent on broader economic goals. With over a third of the recovery funds earmarked for climate projects and a fifth for the bloc's transition towards a more digitised economy, Gauer said EU states needed to press ahead with reforms, such as simplifying public procurement laws and regulations that tend to stall investments.

"It's a huge challenge, we are running against the time," she told a seminar on obstacles to spending the cash well. But some states - notably France - want to access the funds quickly rather than with many strings attached and warn the mass stimulus would otherwise risk being too little too late to mend economic damage wrought by COVID-19.($1 = 0.8320 euros)