French President Emmanuel Macron and German Chancellor Angela Merkel proposed on Monday to revive the European economy, shaken by the Covid-19 crisis, by mobilizing EUR 500 billion.
Faced with Covid-19, which crippled the European economy, France and Germany on Monday, May 18, proposed that the continent’s recovery plan be provided with € 500 billion for the most affected countries.
Paris and Berlin are proposing that this fund, which is currently being debated in Brussels, “should receive € 500 billion in EU budget spending for the sectors and regions most affected”. And this, on the basis of the EU budget program and in accordance with European priorities, “read the joint statement issued after an exchange between Emmanuel Macron and Angela Merkel.
Angela Merkel announces the European Stimulation Fund in a conference with Emmanuel Macron
Important feature: Paris and Berlin propose that the European Commission finance this stimulus aid by borrowing from the markets “on behalf of the EU”. This money is then transferred as “budgetary expenditure” to European countries and “to the sectors and regions most affected”, the statement emphasizes. Funding “will focus on the difficulties associated with the pandemic and its repercussions”. The money is gradually repaid over several years.
The European recovery plan announced by Paris and Berlin will prioritize the health sector
A mechanism close to “eurobonds”
It is not a question, with this tool, of the famous “Eurobonds”, of the debts directly linked between European states, such as Italy, in particular, claimed them, but rejected by Northern Europe and Berlin.
This plan, if adopted by the EU’s 27 countries, would come close to this model. The French head of state emphasized that it was “a major step” in the European history of these European loans. “These will not be loans but direct dividends” to the countries most affected, Emmanuel Macron said.
FR NW SOT MACRON 2 HEALTH 5:30 pm
This stimulus plan would be added to the emergency program already decided before the pandemic by the euro area finance ministers and in particular consist of lending capacity.
“It will strengthen the resilience, convergence and competitiveness of European economies and increase investment, especially in ecological and digital transitions and in research and innovation,” the joint statement said.
Strengthening EU health sovereignty
In addition, France and Germany have proposed defining a common European health strategy to strengthen the health sovereignty of the 27 and learn from the difficulties in managing the health crisis linked to a new coronavirus.
“Our response to the current crisis and to future health crises must be based on a new European strategy based on strategic health sovereignty,” can be read in the joint statement.
In particular, Paris and Berlin propose to develop joint strategic stocks of pharmaceuticals and medical products. The Franco-German couple also wants to set up an EU Health Working Group within the European Center for Disease Prevention and Control. He also wants to increase the European capacity for research and development in vaccines and treatments.
Paris and Berlin propose a € 500 billion plan to alleviate the Covid-19 crisis
Negotiation at 27
It remains for the Franco-German couple to convince all EU member states. The negotiations with 27 members can be tricky, following the traditional dividing lines between the union between “north” and “south”.
Chancellor of Austria Sebastian Kurz responded to Twitter by saying that he was “on loan” and that he did not want an increase in the EU budget without a redistribution of his resources. He met this topic with the leaders of Denmark, the Netherlands and Sweden, other countries that would probably oppose the Franco-German proposal.
Italian Prime Minister Giuseppe Contees and the Spanish government welcomed them “a step in the right direction” as the two countries demanded.
“The Franco-German proposals are ambitious, focused and welcoming,” said the President of the European Central Bank, Christine Lagarde. The President of the European Commission, Ursula von der Leyen, also welcomed the constructive proposal from France and Germany. It must present its own plan for the EU’s economic recovery on 27 May.
With AFP and Reuters