The EU’s covid-19 recovery fund has changed how Europe spends money

that Europe is forged in crisis may be about to acquire a refinement. By the time a response to any given crisis is operational, which takes a while in a 27-country bloc, there is a good chance that the crisis will be more or less over. But the response might well turn out to be just in time for the next one.Take the ’s covid-19 fund, the Next Generation or for short. It was set up in the second half of 2020 to help weaker countries in eastern and southern Europe make a full recovery from the pandemic. There are several novel elements. For starters, it is big, at €807bn ($958bn) in 2021 prices, almost half of which is paid out as grants (the rest as cheap loans). It is debt-funded rather than coming out of member states’ existing budgets, adding a considerable stimulus (see chart). And most of its money is to be paid out only once countries have taken agreed reform steps and met investment targets, rather than as a simple transfer from richer to poorer regions.