According to the draft agreement, the legal spending commitments attached to the projects included in Next Generation EU shall be made, at the latest, by 31 December 2023, and the related payments will have to be made effective, at the latest, by end-2026. More specifically, 70% of the transfers should be committed during the 2021-2022 two-year period, with a country-based distribution factor that depends on the unemployment rate in 2015-2019, population and the country’s per capita income. The remaining 30% must be committed before end-2023, and the distribution factor will be adapted to incorporate more directly the heterogeneous impact of the health crisis. Thus, the unemployment rate will be replaced by a variable that will weight, in equal portions, the decline in GDP in 2020 and the cumulative decline in GDP in 2020-2021. In sum, the fund will enable, at least in part, a balance to be struck between the potential and real financial divergences among the European partners. This is because it will benefit from the positive externalities arising from joint action and it will serve to engineer a coordinated exit from the crisis, based on common budgetary instruments. The financing of the fund through Community debt will benefit from the favourable low-interest-rate environment and will prevent this new debt being assumed by Member States individually, under conditions which, in some cases, would be foreseeably more unfavourable than those 4  which are expected to be applied to this pooled instrument.
The allocation of responsibility and mandate are of course important also because there are both an interest rate lever and a regulation lever to pull, and that these can in some cases have similar effects. It is not difficult to imagine situations where regulations and the interest rate counteract one another. For instance, one might have a situation where the prospects for inflation and the economy as a whole look bleak, but where there are nevertheless signs that a credit-driven bubble is inflating. There may then be reason to use macroprudential measures to counteract the bubble. But these will reduce lending and thus further weaken the economy. Such counteracting effects need not be a problem, if one single authority is controlling both levers, or if they are controlled by different authorities that are essentially trying to achieve the same aims and make similar assessments. For instance, they may both agree that the economy is weak, but that there may be reason to take action to counteract a bubble. Then it is a question of coordinating and trying to find a suitable dosage, or mix, of interest rate and regulations. It is clear that the problems can be aggravated if the levers are controlled by different authorities that do not have the same aims and make completely different assessments of the situation. It is thus important to try to coordinate monetary policy and macroprudential policy. Of course, there has always been a need to coordinate monetary policy and the work to promote financial stability.