Coronavirus: France and Germany propose €500 billion EU recovery fund

Coronavirus: France and Germany propose €500 billion EU recovery fund
Credit: Youtube screengrab

German Chancellor Angela Merkel and French President Emmanuel Macron have announced that they want to create a €500 billion recovery plan to offer countries and regions hardest hit after the coronavirus crisis.

Merkel and Macron announced their recovery plan via a joint video conference, following an afternoon of meetings. They intend to set up a €500 billion temporary emergency fund, managed by the European Commission, which would borrow money on financial markets in the EU's name.

The money has to be made available "in a very targeted manner," to support the most affected economic sectors and regions.

Macron stressed this money would be a gift, meaning the beneficiaries will not have to repay it. The fund will be part of the next multi-annual budget, which starts next year. The German-French initiative is supposed to launch the reconstruction of the EU after the health crisis.

"Europe will face this crisis together, and we will emerge from it stronger. It is the declared aim of our joint efforts to achieve a sustainable economic recovery for the European Union," Merkel said in a statement. "We, Germany and France, are committed to our responsibility for the EU without any ifs and buts and we will help together to pave the way out of the crisis," she added.

The president of the European Commission, Ursula von der Leyen, will present her own post-coronavirus recovery plan on 27 May. The Commission stated that it welcomed the proposal, as it "acknowledges the scope and the size of the economic challenge that Europe faces, and rightly puts the emphasis on the need to work on a solution with the European budget at its core," according to von der Leyen.

The announcement could bring to a close the heated debate over the so-called corona bonds, under discussion since March and to which Germany and the Netherlands had been starkly opposed.

However, the member states will all have to agree as well, Macron and Merkel said, admitting that work would still be needed "to bring them all together."

"Faced with the pandemic, Europe was undoubtedly at fault at the beginning of the crisis. But there have been very concrete gestures of solidarity. This solidarity has saved lives," said Macron, adding that health is not a core competence of the EU, but the economy is.

Maïthé Chini

The Brussels Times

Copyright © 2024 The Brussels Times. All Rights Reserved.