Of that amount, Croatia can expect HRK 10bn, of which HRK 7.3bn are non-repayable, and EUR 2.65bn are possible loans.

The European Commission has put forward its proposal for a major recovery plan. To ensure the recovery is sustainable, even, inclusive and fair for all Member States, the European Commission is proposing to create a new recovery instrument, Next Generation EU. The Commission has also unveiled its adjusted Work Programme for 2020, which will prioritise the actions needed to propel Europe’s recovery and resilience.

Next Generation EU of EUR 750bn 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 EUR 1.85 trillion.

Of that amount, Croatia can expect HRK 10bn, of which HRK 7.3bn are non-repayable, and EUR 2.65bn are possible loans. Such news could bring a positive sentiment on the bond market.

Next Generation EU will raise money by temporarily lifting the own resources ceiling to 2.00% of EU Gross National Income, allowing the Commission to use its strong credit rating to borrow EUR 750bn on the financial markets. This additional funding will be channelled through EU programmes and repaid over a long period of time throughout future EU budgets – not before 2028 and not after 2058.

It is important to note that the member states will have to vote on the aforementioned proposal on European Council meeting in June.