Yahoo Finance Coronavirus: EU to deploy €750bn to boost bloc’s recovery
The European Commission is planning to unveil a €750bn (£670bn, $826bn) stimulus plan on Wednesday afternoon to help the bloc jumpstart its economic recovery from the coronavirus pandemic.
According to Spiegel and the German Press Agency (DPA), the package earmarks €500bn as non-repayable grants, and €250bn as loans.
Commission president Ursula von der Leyen will officially present the recovery plan to the European Parliament in the afternoon. She will also put forward a proposal for the EU’s next budget covering 2021-2027, reportedly of around €1tn.
European Central Bank chief Christine Lagarde said in Frankfurt on Wednesday that the eurozone GDP is likely to fall by between 8% and 12% in 2020.
The matter of issuing grants to EU countries struggling from the COVID-19 outbreak is a contentious one, as it pits member states against each other.
Last week, German chancellor Angela Merkel and French president Emmanuel Macron made a similar proposal, including that the Commission should be authorised to borrow on the financial markets for the grants. It marks the first time Germany has supported the idea of any form of joint debt responsibility across the bloc.
READ MORE: Merkel and Macron propose €500bn EU recovery fund
The “ambitious, targeted and temporary” €500bn recovery fund, as Merkel described it, would finance the relaunch of the EU economy.
Merkel was quick to underline that the German-Franco proposal would be a temporary solution. However four northern nations are strongly opposed.
Austria, the Netherlands, Denmark and Sweden — the so-called “Frugal Four” — say they will only support an emergency fund made up of loans, not grants.
