Brussels will Provide A Stimulus of Only 0.8% Per Year of the European Union’s GDP
The 750,000 million euros of the recovery fund that is still negotiated by Brussels will provide a stimulus of only 0.8% per year of the European Union’s GDP. While European countries are still studying this aid, Washington has already launched a stimulus plan that reaches two trillion dollars, almost 10% of the United States’ GDP.
The differences on both sides of the Atlantic are obvious. In the European Union, a plan is currently being discussed that, according to most analysts, will be insufficient to face a fall in the Community economy that will be around 7.4%, according to Brussels’ own forecasts. If the fund prospers, the transfers will start next year and will end on December 31, 2024. Thus, the 750,000 million euros will have to reach four years, which means 187,500 million euros a year for face recovery.
For its part, the agreement reached between the White House and the Senate has allowed the release of the two trillion dollars provided by the fiscal stimulus law agreed between Democrats and Republicans in the United States. While waiting for the injection to materialize, the agreement includes, according to US media, the disbursement of 250,000 million in monthly checks of 1,200 dollars to families in addition to 500 in cash per child, 250,000 million for the expansion of the unemployment subsidy (requests are increasing more than expected), loans for SMEs (350,000 million in total that will not have to be repaid if they keep the jobs), another 500,000 million for companies in difficulties, 130,000 million for hospitals or a helpline of up to 50,000 million dollars of aid to US airlines.
In this way, the American package is almost 1.2 billion euros higher than the one still being studied by the European Union. However, the economy of the EU as a whole and its population are superior to those of the Americas. According to the latest estimates from the International Monetary Fund (IMF), the EU’s GDP exceeded that of the United States in 2019.
Specifically, the European Union has a GDP of 22.8 trillion dollars, compared to 21.3 in the United States. In population, the European Union also surpasses the United States. The EU has 446 million inhabitants, the third population in the world after China and India. For its part, the United States, according to the last census, has 328 million inhabitants.
As in the European Union, the American stimulus plan sparked mixed opinions among Democrats and Republicans. “There has been an internal political struggle in which Democrats have wanted to influence aid to workers and Republicans wanted these funds to be transferred to the company,” says the former president of the Spain-US Chamber of Commerce. “It is striking how quickly these differences have been put aside in a year, in addition, in which the presidential elections occupy all politics,” he adds. Camuñas indicates that “despite