Merkel Calls for Agreement on EU Fund Before Summer Break
Merkel Calls for Agreement on EU Fund Before Summer Break
(Bloomberg) --
Chancellor Angela Merkel called for a deal before the summer break to help pull the European Union out of the worst recession since World War II, urging the bloc’s leaders to show solidarity to fight the coronavirus crisis.
The EU needs to a play a greater role in global affairs, and the response to the pandemic will be critical in determining how the bloc emerges as an actor, Merkel told lawmakers in Germany’s lower house of parliament in Berlin on Thursday, vowing to play a central role in shaping and promoting European integration.
“Solidarity and cohesion in Europe have never been more important,” said Merkel, who will take over the EU’s rotating presidency in July. “No country can survive this crisis alone and isolated. Our common goal will have to be to master this crisis together, sustainably and with a view to the future.”
The comments are a call to action. EU leaders are wrangling over a radical proposal for a 750 billion-euro ($844 billion) program designed to drag the 27-member bloc out of its economic turmoil as the pandemic hits some regions harder than others.
Personal Touch
Merkel will join her counterparts on a video conference on Friday to debate the proposal, which needs to win the backing of every EU member. Negotiations are set to be fraught as wealthy countries like Austria and the Netherlands resist generous grants to hard-hit countries like Italy and Spain. All countries are fighting for as much as possible from the fund.
A deal before the summer break would give Merkel the opportunity to push the plan through European Parliament during her presidency and give national legislatures time to ratify the decisions. Then, the plans would “be able to bear fruit for the good of Europe” as soon as early next year, the chancellor said.
An ultimate decision is more likely to come at an EU summit as early as July, when the bloc’s leaders will meet in person for the first time since the pandemic swept across Europe, according to a German government official. Merkel will be personally involved in the discussions to build consensus ahead of that gathering, the official said.
Many questions remain open in the negotiations, including the volume of financing, rebates to member states, distribution of the resources and the role of rule-of-law criteria in impacting payouts, the German official said, adding that leaders aren’t likely to make a final decision during Friday’s discussion. Germany is willing to show special solidarity to reach an accord, but isn’t willing to pay all the bills, the official said.
Joint Debt
The program would be funded by joint debt issuance in a significant, but contentious step toward closer economic integration. The plan would make as much as 500 billion euros in grants and 250 billion euros in concessional loans available to the member states most affected by the crisis.
The EU can’t go back to business as usual after the pandemic, which will impact society until a vaccine is developed and rolled out, she said, adding that the recovery will need to include digital and climate initiatives make the bloc better prepared to compete in the future.
“The current numbers reveal the dramatic fallout in Europe’s economic activity and strength, so we need to act decisively and quickly,” said Merkel. “Europe needs us as much as we need Europe.”
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