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By mid-May, the first wave of a coronavirus pandemic was unfolding in Europe, contrary to gloomy forecasts for an economic recession. When economic life pauses for a few months, it’s hard to radiate optimism.
But instead of shrugging and talking about belt-tightening, EU leaders, particularly German Chancellor Merkel and French President Emmanuel Macron, have raised their heads.
And unexpectedly, he proposed to get out of the crisis not only together, but by jointly creating an economic recovery fund. It is essential that the fund, which was only agreed at the end of the year, is financed with market loans on behalf of the EU as a whole, without the need to repay recipient countries.
A big credit to A. Merkel
In other words, a general loan is envisaged, long desired by members of the southern Community. Italy and Spain were even fortunate that, during the first wave of COVID-19, they suffered perhaps the worst in Europe.
The agreement contains a series of safeguards designed to reassure thrifty Northern European countries that suspect that Southerners want to abuse fiscal discipline in the Nordic countries.
But the sums are impressive, as is the determination. The new multi-annual budget and the economic recovery package are worth up to € 1.8 billion. Furthermore, despite opposition from Poland and Hungary, it is linked to the rule of law.
A joint loan is envisaged, which has long been desired by the southern members of the Community.
Those moments, such a crisis, have been recognized by Merkel herself, who seems to be withdrawing from big politics with a very strong, very European accord. In May, the German chancellor, who has so far been suspicious of the joint loan idea, emphasized: “When there are special circumstances, special measures.”
“The proposal and the agreement are very important. The mutualisation of debt is a fundamental step towards European integration.
In political terms, an attempt is being made to reverse this trend, as there is still a lot of Euroscepticism in Europe. But Germany has supported joint borrowing, which is extremely important. Merkel hesitated for a long time, but agreed, of course, that the coronavirus pandemic helped. ” 15 minutes said Carnegie Center analyst Judy Dempsey.
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