NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases a macro-market commentary: “EU Cohesion Funding: Update on the Cuts.” KBRA’s view on European sovereigns considers both prospective and actual financial support from the European Union (EU). As such, the European Commission’s cohesion funding proposal for the 2021-2027 cycle that cuts financing by -17% is a notable development.
The new proposed cycle rebalances the transfer of funds towards countries whose per capita income growth has exhibited greatest weakness, including crisis economies. According to the proposal, only Greece, Cyprus, Belgium, and Bulgaria will receive larger nominal allocations. The scale of cuts reaches as high as -70.7%; although the largest cuts are for wealthier countries whose allocations are small relative to the sizes of their economies, and hence not highly impactful. The average reduction for the funding cycle is -22% and the proposed cuts for Poland of -15.5% result in an increase in that country’s share of funding, albeit out of a smaller pool.
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