Under the blueprint, the EU would raise €500 billion on financial markets and then distribute the cash to pandemic-stricken regions across the bloc. French President Emmanuel Macron said member states would contribute to the fund in their economy might. As the EU’s largest economy, Berlin will be expected to sign the biggest cheque.
The bloc’s next seven-year budget would be used to collect and distribute the funds.
German Chancellor Angela Merkel said: “We need a colossal effort and we are ready to make it.
“We are taking a new road for a crisis that is without precedent.”
Mr Macron insisted the new fund would be distributed by grants, and ruled out asking recipients to repay them.
He said: “This is the transfer of real budget money to the worst-affected regions and worst-hit sectors.”
The plan has put the two influential nations, who have secured the support of EU Commission President Ursula von der Leyen, on a collision course with some member states.
The bloc’s traditionally financial prudent capitals have expressed concern that they weren’t properly consulted.
They said the would oppose the use of grants rather than low-cost loans being distributed as part of the rescue plan.
A Dutch government spokesman warned France and Germany they did not have the “final say” in the distribution of funds.
Prime minister’s Mark Rutte’s spokesman said: “Ultimately, the European Commission has yet to come up with a proposal.”
Austrian Chancellor suggested he would oppose the blueprint, which requires the unanimous backing from all EU leaders, unless funds are only disbursed by loans.
He said: “Our position remains unchanged. We are ready to help most affected countries with loans.
Mrs Merkel hinted that the Franco-German plan could still be scuppered by member states.
She said: “We are making our partners a proposal – I think it will help to reach consensus in the EU27.”
Mr Macron added: “An agreement between German and France is not an agreement of the 27, but there can be no agreement among the 27 if there is not already a Franco-German agreement.”
Published at Tue, 19 May 2020 07:59:00 +0000