The instrument consists of a €500 billion grant for the most affected member states and sectors and of €250 billion available in loans.
A total of €1,850 billion is proposed for the MFF and the recovery and resilience instrument.
European Commission President Ursula von der Leyen put forward on Wednesday the proposal at a European Commission session.
Today, (...) the European Commission is proposing to create a new recovery instrument, Next Generation EU, embedded within a powerful, modern and revamped long-term EU budget. (...) Next Generation EU of €750 billion as well as targeted reinforcements to the long-term EU budget for 2021-2027 will bring the total financial firepower of the EU budget to €1.85 trillion," the European Commission said in a press release.
The package of recovery measures consists of two parts - the multiannual EU budget for 2021-2027 and the recovery instrument, which will be funded through borrowing on the financial markets.
The key part of the proposal is the action of temporarily lifting the own resources ceiling of EU Gross National Income. This is the highest possible amount of contribution that can be requested from member states to fill the budget.
In practice, the agreed amount of the MFF is always lower than the highest upper limit. Currently, the ceiling is 1.23% of the gross national income (GNI), while the 2014-2020 VFO is 1% of the GNI.
The difference will serve as a guarantee for borrowing in financial markets, that is for the recovery and resilience instrument.