RIO DE JANEIRO, BRAZIL – The Franco-German axis positioned itself on Monday for the bailout of post-pandemic Europe with a trillionaire initiative of joint reconstruction.
German Chancellor (Prime Minister) Angela Merkel and French President Emmanuel Macron emerged on Monday afternoon to announce a four-point plan that includes a €500 billion euro (R$3.12 trillion) aid fund for the countries most affected by an “unprecedented crisis in the history of the European Union,” according to a joint statement.
“This crisis is unprecedented and for the solution to be effective it requires a collective and, above all, European response”, said Macron. “The aim is for Europe to come out of this crisis strengthened, cohesive and solidary,” said Merkel.
“There is no life, no job or business immune to this global shock,” the chancellor added. The common initiative is based on four pillars: a health strategy, a rehabilitation fund for solidarity and growth, speeding up the ecological and digital transition, and boosting European industrial capacity and sovereignty. France and Germany propose that the €500 billion rehabilitation fund provides resources for “the worst-affected sectors and regions based on the EU’s budget programs”.
The German Chancellor considers the initiative “an extraordinary and unique effort”, which will have a limited duration. The Franco-German proposal still needs to be approved by the bloc’s 27 member states and will be bound to the first years of the EU’s multi-annual budgets.
The €500 billion, which will be released on the markets “in the name of the EU,” Macron stressed, “is intended to be reimbursed,” and to this end, it will be necessary to work on a “calendar and terms,” assured the French President, in words directed at the most reluctant countries so far – such as the Netherlands, as well as Germany – to give in on this front.
However, what is also certain, he explained, in a nod to countries like Spain, which proposed a perpetual debt, is that the resources “will not be reimbursed by the beneficiaries”, which will be directed to “the most impacted sectors in the most affected regions” by the crisis. In other words, Germany gave in by allowing the debts to be financed out of the EU budget.
“This is what the EU and the single market need in order to maintain coherence, and this is what the eurozone needs in order to maintain its unity,” said Macron, for whom this proposal represents “a major step forward”.
The French President acknowledged that “Europe undoubtedly made mistakes at the start of the crisis because the health issue is not a European concern and also because there were nationalistic considerations. We have to draw conclusions from this”. The “shared belief” after this proposal is that there is a need for “a stronger Europe”.
The initiative is the result of intensive “bilateral work” but has included discussions with many European partners such as “Italy, Spain, Portugal, the Netherlands, as well as the President of the Council and the President of the European Commission”, said Macron.
The post-Pandemic European economic plan is still in its infancy after, last month, member states gave the Commission a go-ahead to submit guidelines, which have not yet come to light. By late May, Brussels is expected to submit a plan capable of bridging the gap between northern, southern, and eastern Europe on how reconstruction should be financed. The European fund could ultimately mobilize more than a trillion euros.
On Monday, Paris and Berlin tried to pave the way for this plan to become a reality, which has given rise to conflicting feelings among the Union’s partners. France and Germany have formally abandoned the chill that has arisen in recent years in the European capitals over the pace and depth of the reforms required for the Union.
In fact, in recent weeks, France and Germany have united on a common front to overcome the more distant positions – those of the Netherlands in the north and Italy in the south. France has also been one of the main advocates of a large rehabilitation fund, which Spain also claims, and of a common European debt to be repaid at least in the long term.
Source: El País