European leaders have taken a historic step towards sharing financial burdens among the EU’s 27 countries by agreeing to borrow and spend together to pull the economy out of the deep recession caused by coronavirus.
European leaders have taken a historic step towards sharing financial burdens among the EU’s 27 countries by agreeing to borrow and spend together to pull the economy out of the deep recession caused by coronavirus. Pushed by Germany’s Angela Merkel and France’s Emmanuel Macron, leaders agreed to borrow jointly by selling bonds, using the European Union’s collective strong credit rating that keeps interest costs low. The money will fill a 750 billion euro (£676 billion) recovery fund to boost the hoped-for economic rebound next year and restore the growth and jobs lost in this year’s plunge. Two decisions – shared borrowing, and simply handing out much of the money as grants – broke through longstanding opposition from some of the financially stronger countries to exposing their finances and taxpayers to troubles in southern Europe, where bureaucracy and red tape continue to slow growth. Germany, which had long resisted shared borrowing, played a decisive role by changing its approach in the face of the crisis as Ms Merkel pressed for a deal.
