France and Germany announce unprecedented 500 billion euro stimulus fund for the EU

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German Chancellor Angela Merkel holds a joint video press conference with French President Emmanuel Macron in Berlin, Germany, May 18, 2020. [Photo/Agencies]

PARIS / BERLIN – France and Germany proposed Monday to the European Commission to borrow money on the capital markets on behalf of the European Union (EU) and to create a stimulus fund of 500 billion d euros ($ 546 billion) to help coronaviruses. European regions and economies.

Describing the proposal as “a major step forward”, French President Emmanuel Macron said at a joint video press conference with German Chancellor Angela Merkel that it was the first time that France and Germany agreed to leave the ‘EU jointly raise debt.

The proposal is considered unprecedented because it overcomes the objections of Germany and several other wealthy EU countries to the concept of collective borrowing.

Merkel said the unusual nature of the COVID-19 crisis prompted the two countries to choose an unusual path. “The aim is for Europe to come out of this crisis stronger, more coherent and more united,” she said.

“The stimulus fund will have € 500 billion in EU budget spending for the most affected sectors and regions on the basis of EU budget programs and in line with European priorities,” said the two countries. in a joint press release.

“It will strengthen the resilience, convergence and competitiveness of European economies and increase investment, in particular in ecological and digital transitions and in research and innovation,” he said.

Macron said the 500 billion euros “will be spent on more than just technology. It is a strong economic response that will help tackle unemployment in the most vulnerable regions, “he said.

“It will not be loans, it is a budgetary expenditure, which would be allocated to the sectors and regions most affected. We are convinced that this measure is justified, “said Merkel.

“We must act in a European way in order to come out of the crisis well and to strengthen ourselves,” she said. “When Germany and France take the initiative, it encourages the EU position process. “

The European Commission is due to present the details of the economic recovery program in Brussels on May 27. Paris and Berlin have yet to convince other member states – the Netherlands and the Scandinavian countries in particular – to follow them.

But “the fact that the Franco-German couple agreed on the main lines of a recovery plan financed by a common debt of European states, issued by the Union and spent through the European budget, is in itself a revolution, ”commented the Frenchman. Le Monde daily newspaper.

“Berlin, which was in the wind at the end of March against everything which, in one way or another, amounts to pooling the debt of Europeans, is now in agreement to embark on this path,” added everyday life.

Paris and Berlin have also agreed to increase research and development capacities in the field of COVID-19 vaccines and treatments, to build up joint strategic stocks of pharmaceutical and medical products and to increase production capacities of these products in the region. ‘EU.

The President of the European Commission, Ursula von der Leyen, welcomed the proposal.

“It recognizes the scale and breadth of the economic challenge facing Europe and rightly emphasizes the need to work on a solution with the European budget at its heart,” she said. in a press release.

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