Merkel and Macron want to free up 500 billion euros for the EU countries that have been badly hit by Corona. The south is happy about the planned EU aid, the north is not amused. The renewed Franco-German tandem has to fight.
Berlin (dpa) - To help EU countries in need after the Corona crisis, Germany and France want to put together a European aid package with a volume of 500 billion euros.
According to Chancellor Angela Merkel and France's President Emmanuel Macron, there should be massive debt borrowing from the EU budget. Crisis states like Italy or Spain could get grants. Merkel said on Monday that this was an "extraordinary, one-off effort" - Berlin had long resisted common debts over the EU budget.
But there is already resistance to the Franco-German plan. Austria, the Netherlands, Denmark and Sweden insist that the EU only issues repayable loans and no grants. Austria's Chancellor Sebastian Kurz said in the evening that he had exchanged views with the heads of government of the Netherlands, Denmark and Sweden. "Our position remains unchanged," Kurz wrote on Twitter. This is a problem for Merkel and Macron, because: The plan must be approved unanimously by all 27 EU countries.
This Tuesday, Merkel wants to promote the relief plans in a video conference with the heads of government of Poland, Hungary, the Czech Republic and Slovakia. Exactly what it is about:
TOGETHER IN THE RED: The reconstruction is to be financed through loans that the EU Commission borrows as debt on the capital market. The EU countries would have to provide guarantees for this in the next multi-year joint financial planning. Because if the countries stand together, they can borrow money on more favorable terms than many governments would be able to do on their own.
FINANCIAL SPRAYING FOR CRISIS COUNTRIES: Sectors and regions particularly affected should receive grants from the fund - no loans. The recipient countries therefore do not have to transfer the money back. Indirectly, however, they are asked to pay, because they continue to pay into the EU budget, from which the debt is repaid over a period of around 20 years. How much a country pays here depends on the economic power. Germany is the largest net contributor with a share of around 27 percent. The bottom line is that financially weaker states benefit particularly.
GOALS: The aim of the money is to prevent regions from being left behind in the Corona crisis. In particular, it is intended to promote the change to a more digital and environmentally compatible economy as well as research and innovation.
BUDGETARY RULES: Germany has long resisted such shared debts through the EU budget. The German government rejected joint bonds ("corona bonds"). Financing via the EU budget now means that the usual EU budget rules apply, only projects are financed and not the state budget of individual member states. The difference to corona bonds is that joint liability for the debt is limited to the scope of the guarantees in the household.
PREVIOUS AID: A first package of loan assistance of up to EUR 540 billion had already been agreed by the EU countries in early April. The planned fund is about long-term support for the reconstruction.
FRIENDS OF THE PLAN: At least there was prompt applause from Brussels. "This goes in the direction of the proposal the Commission is working on," said EU Commission President Ursula von der Leyen. In April the EU member states asked them to develop a model for the reconstruction plan. The proposal will be presented on Wednesday next week. EU Council President Charles Michel spoke of a step in the right direction and called for a willingness to compromise on the part of all 27 EU countries.
Italy and Spain see Merkel and Macron's initiative positively. However, there is still room for improvement, government officials said in Rome. The Spanish Prime Minister Pedro Sánchez wrote on Twitter about an "initiative that is in line with our demands and in which we have to move forward".
OPPONENTS OF THE PLAN: Some EU countries, including the Netherlands and Austria, continue to have reservations about taking on joint debts and giving this money as a donation to crisis regions. The funds borrowed should also only be passed on as a loan, the Austrian government said on Monday, for example. Persuasion is still required here. Because the plan has to be adopted unanimously by all 27 states because it is linked to the seven-year EU budget framework. The increase in the own funds ceiling must also be ratified in all 27 states, in Germany by the Bundestag.
WHAT THE EASTERN EUROPEAN SAY: Merkel's Eastern European counterparts from Poland, Hungary, Slovakia and the Czech Republic are taking at least one main concern: the planning of the funds in the next multi-year EU budget, which has to be drawn up this year, should not be affected. This is particularly important for the Eastern European countries as recipients of extensive structural aid.