The EU flags are seen in front of the Berlaymont, the EU Commission headquarter on May 19, 2020, in Brussels, Belgium.
The European Commission has unveiled plans for a 750 billion euro ($826.5 billion) recovery fund as the region faces the worst economic crisis since the 1930s.
The announcement came after France and Germany opened the door to issuing mutual EU debt last week, suggesting that the Commission, the EU’s executive arm, should raise 500 billion euros on the public markets.
The Franco-German initiative was described as a “breakthrough” and a “historic” step as Germany had always opposed the idea of jointly;y-issued debt, even during previous crises.
There are four European countries that still oppose the Franco-German plan and want the EU to issue loans rather than grants as a way to mitigate the economic fallout from the Covid-19 crisis. Austria, the Netherlands, Sweden and Denmark also want strong economic reform commitments in return for any financial help.
Wednesday’s proposal kicks off a discussion among the 27 EU member states. Each leader will meet, maybe via video call, on June 18 in the hope of finding a consensus over the exact details of the recovery fund.
The European Parliament, the only-directly elected EU institution, will also have to approve any new financial aid as well.
In the meantime, there are other short-term measures available across Europe. The European Central Bank is buying government bonds as part of its 750 billion euro program and there are 540 billion euros available in unemployment schemes, business investments and loans to governments.