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German Chancellor Angela Merkel and French President Emmanuel Macron announced on Monday an initiative that would help the European Union (EU) in its fight against the coronavirus pandemic.
The two countries have proposed the creation of a stimulus fund worth € 500 billion, or around US $ 547 billion, to help EU countries and industries affected by COVID-19.
Unlike an earlier rescue package that was created to help EU countries that have offered loans, this initiative will offer grants, officials said.
The plan is not expected to be able to send funds until 2021 to the most affected areas and is likely to target priority EU initiatives, such as digitization and tackling climate change.
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“This is a historic breakthrough,” said French Finance Minister Bruno Le Maire on Tuesday. “We will be able to support the economic recovery in the countries most affected by the virus.”
“The second consequence is political: France and Germany loudly affirm their determination to see solidarity between the members of the European Union placed at the heart of European construction”, said Bruno, further qualifying “a step history for the whole of the European Union ”.
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Macron and Merkel participated in a videoconference to discuss the new proposal.
Merkel said the plan “will support a sustainable recovery that will restore and improve growth in the EU, Germany and France”, as well as “support an ambitious, temporary and targeted stimulus fund”.
The proposal is still the subject of opposition in certain parts of the EU, and it is not clear at the moment whether the proposal would be separated or included in the recovery plan that the European Commission planned to deploy on 27 may.
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Commission spokesperson Eric Mamer has reportedly said that the new proposal “is going in the direction we are heading”, but the commission’s plan probably would not be “copy and paste” the proposal as is.
Germany and France have the largest economies in the EU and are considered a political power when nations work together.
The Associated Press contributed to this report.