EU wants to raise billions to service its mountain of debt from Covid aid packages

Sajid Javid was not 'transparent' about Omicron data says expert

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Brussels is now suggesting new sources of income to make repayment easier. The colossal debt burden casts a shadow over the bloc that plans to distribute a total of 807 billion euros from the coronavirus aid fund to member states. The fund has been increased by Brussels selling bonds.

Brussels has had to borrow large amounts of money from global financial markets.

The bloc is expecting to pay back these loans with the EU budget between the years 2028 and 2058.

This week Ursula von der Leyen will present proposals for raising funds within the bloc to pay back the loans.

News outlet Süddeutsche Zeitung has seen a six-page draft of the bloc’s plan to pay back the loans.

To pay back the loan the EU wants to benefit from the global redistribution of taxation rights on corporate profits.

The Biden administration is taking a similar approach in demanding corporations pay an increased rate of tax.

The EU has designed a digital tax levy that is a special tax for online companies like Google or Amazon.

Europe’s Economic Commissioner Paolo Gentiloni said in the EU Parliament that work on the digital levy has been paused.

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The European Commission now wants to present a directive in July that will translate this global agreement into EU law.

And the authority is now demanding that each member state passes on part of the additional tax revenue derived from this to Brussels.

As Omicron spread across Europe causing fears of renewed lockdowns, yields on German 10-year bonds have fallen.

The German 10-year bond is regarded as one of the world’s safest assets in the world.

It has dipped to -0.402 percent, the lowest level since December 8.

They flirted with their lowest levels since August.

Commerzbank rates strategist Rainer Guntermann said this was due to uncertainty over the spreading Omicron variant.

Speaking to Reuters he said: “An underlying safety bid due to Omicron uncertainty ahead of the Christmas period probably helped and looks set to stay.”

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