This archive report was first published on 18 May 2020.
On May 18, 2020, French President Emmanuel Macron and German Chancellor Angela Merkel announced a €500 billion ($542 billion) rescue package to help the European Union recover from the economic devastation caused by the coronavirus pandemic.
The unprecedented package, which was agreed upon after talks by video conference, marks a significant shift in Germany's position on joint borrowing to provide stimulus cash.
Financed by borrowing from the market in the name of the EU, the funds will flow to the worst-hit sectors and regions in the 27-member bloc, according to a joint statement from Macron and Merkel.
“We are convinced that it is not only fair but also necessary to now make available the funds… that we will then gradually repay through several future European budgets,” Merkel said.
Countries benefiting from the financing will not have to repay the money, Macron added, emphasizing that the funds “were not loans.”
The plan must now be approved by the European Parliament, which had been eyeing an even larger package.
However, not all EU member states are on board with the plan. Austria insisted that any help should be in the form of loans, not grants, while the Spanish government called the plan a “big step in the right direction.”
European Commission chief Ursula von der Leyen hailed the plan as a “constructive proposal,” saying it acknowledges the scope and size of the economic challenge that Europe faces.
