After weeks of delay and controversy, France and Germany have agreed to create a European stimulus fund endowed with 500 billion euros and intended to help regions, sectors and the countries hardest hit by the coronavirus crisis.
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For this, Germany accepts for the first time the principle of pooling the European debt. The announcement was made by Angela Merkel and Emmanuel Macron after a bilateral meeting held Monday afternoon by videoconference. "This is a colossal effort," said the Chancellor, for whom "Europe must now come together" . The President of the Republic for his part spoke of a "major step forward" .
For weeks, a simple concept and a financial tool - coronabonds or eurobonds - have been poisoning the bilateral relationship and threatening to widen political differences within the European Union. France, Italy and Spain defended the idea of European loans pledged on the signatures of the 27 member states, which would have notably enabled Rome and Madrid to refinance their investment needs at lower cost. The northern European countries, in particular Germany, for their part refused to sign a blank check for these cicada countries, by lending their signature to a joint loan. This difficulty has been circumvented: it is European money pledged from the Community budget which will ultimately be committed, and not part of the national budgets.
Reassure investors
The European Commission itself - led by German Christian Democrat Ursula von der Leyen - will sign to raise the equivalent of 500 billion euros from the markets. A signature to reassure investors and to borrow at low rates. This sum will then be allocated to the regions in need and will be reimbursed, not by the Member States individually, but by the pool common to the Twenty-Seven. "This is a new route taken in the face of an unprecedented crisis , " said Angela Merkel. The precise terms of these budgetary allocations and future reimbursements remain to be negotiated. With this Franco-German contribution, the Brussels executive will make a proposal to the other Member States.
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"It is no longer the money of Germany that is at stake. This time we go through the European budget which Berlin is not a priority. This initiative makes it possible to get out of this stupid quarrel over coronabonds ” , decrypts Henrik Utterwede, director of the Franco-German Institute. This 500 billion euros will be added to another 540 billion loans to be committed via other procedures such as the European Stability Mechanism or loans from the European Investment Bank.
In addition, Paris and Berlin are committed to accelerating the ecological transition and increasing European economic sovereignty, in particular to reduce its dependence on China. The two partners also commit to developing a "Europe of health", notably through the constitution of strategic community stocks. "This Europe of health has never existed, it must become our priority," said Emmanuel Macron. The initiative was also an opportunity for the two leaders to reaffirm the value of the European project in the face of ideological competition displayed by other powers. “We are engaged in a struggle. We are fighting to defend the European ideal, ” said Angela Merkel, who thus took control of the diplomatic field.
