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As the socio-economic damage from the Covid-19 pandemic showcased an increasing gap of wealth between EU countries, the European Union responded with the Next Generation EU program. The program allows the EU to raise about €750 billion or 5.6% of its GDP to fund national-level recovery plans.
With a three-layer safety net, the funds are mainly planned to be disbursed among the EU states in grants and loans. The plan is to foster an efficient transition into a digital and eco-friendly future while also reducing the economic divides among EU nations.
Recovery and Resilience Facility (RRF)
The RRF has a €672.5 billion war chest - €360 billion in loans and the rest in grants. The facility hopes to support lasting investment into both recovery plans and future-proofing sustainable businesses.
REACT-EU
REACT-EU is a €50.6 billion funding for the already existing Cohesion Policy and set to run until 2027. It will facilitate society’s transition into the green and digital economy. In other words, it is good news for electric vehicle manufacturers and online businesses.
InvestEU
The perfect support mechanism for recovering companies and investors, InvestEU focuses on achieving the long-term ambitions of the European Union. The European Investment Bank will implement 75% of the budget guarantee in four policy categories, encouraging SME, green and digital investment instruments.
EAFRD
A funding instrument to support agriculture, agro-food and forestry companies in the EU, the Next Generation EU program will boost the EAFRD budget by €8.1 billion. The member states will get the funding between 2021-2022.
To be eligible, investors and companies will have to prepare themselves according to their respective national reform policies. At Valida, we have an international track record in corporate finance, financial control and business strategy consulting, to help investors and companies position themselves, to take advantage of NextGenerationEU opportunities.
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