French President Emmanuel Macron and German Chancellor Angela Merkel proposed on Monday a 500-billion-euro recovery plan aimed at helping the European Union overcome the historical crisis caused by the emerging Coronavirus epidemic, through an unprecedented mechanism for sharing European debt.
“In support of a lasting recovery that restores and promotes growth in the European Union, Germany and France support the creation of an ambitious, temporary and targeted growth fund” within the framework of the upcoming EU budget project, with a value of “500 billion euros”, Macron said.
Paris and Berlin also propose that the European Commission finance this support for economic advancement by borrowing from markets “in the name of the European Union”, in an unprecedented mechanism in the structure of the union.
The statement added that these funds will then be transferred “as expenditures in the budget” to European countries and “to the sectors and regions most affected”.
Macron confirmed during a joint press conference with the German Chancellor via video that “the 500 billion will not be refunded by the recipients of this money”.
“It will not be loans, but provisions,” Macron said directly to the country’s worst affected.
Such a plan constitutes an unprecedented step towards debt sharing at the European level, which Berlin and North European countries have long opposed.
For her part, Merkel said, “France and Germany take a position in favor of European solidarity,” noting that the proposal is “bold” and may raise criticism, especially in Germany.
This upgrading plan comes to be added to the emergency program, at a value of approximately 500 billion euros, which was approved by the Eurozone finance ministers to confront the global epidemic, which includes especially lending capabilities.
In total, Europe will allocate about one thousand billion euros to face the historic recession that is looming in the horizon of the year 2020 in the euro area (-7.7%, according to the recent commission forecasts).
Macron and Merkel still have to persuade the whole European Union member states of their proposal.
European Commission President Ursula von der Leyen welcomed the “constructive proposal made by France and Germany”.
On the 27th of this month, the European Commission is expected to present its economic recovery plan.
“This (French-German) proposal is moving in the direction of the proposal that the Commission is working on, which will also take into account the views of all member states and the European Parliament,” said von der Layen.
Austrian Chancellor Sebastian Kurtz replied via Twitter, affirming his support for “loans”, while refusing to increase the EU budget and redistribute its resources instead.
Kurtz consulted in this regard with the leaders of Denmark, the Netherlands and Sweden, who may oppose the French-German proposal.
In Rome, Italian Prime Minister Giuseppe Conte welcomed the initiative of Paris and Berlin, considering it “a step in the right direction that Italy had hoped from the beginning”.
Paris and Berlin also called on Europe to give “priority” to coordination in the health sector.
“We want to provide Europe with very concrete skills on the health front, through shared stocks of masks and checks, joint and coordinated purchasing capabilities for treatments and vaccines, joint plans for epidemic prevention and common means of counting cases,” Macron said, stressing that all of this “was never present and should It becomes our priority”.
With the outbreak of the epidemic, it became clear that many European countries rely heavily on masks, tests and the search for vaccines, and the controversy caused by the Sanofi pharmaceutical industry’s announcement recently that it will prioritize the distribution of a possible vaccine to Covid-19 to the United States.
Despite calls for compromise, Macron Monday did not hesitate to criticize European Union regimes that “dilute” the rule of law in the fight against the epidemic.
“In this regard, we will have no leniency, no flexibility,” he said.
No country was named, but the Chairperson of the Commission expressed her “concern” in particular about the situation in Hungary after declaring a state of emergency for a specific period to face the health crisis.