At a cost of 550 billion dollars ... a European emergency plan to confront Corona

After weeks of controversy, European Union member states have overcome their differences and agreed to a 500 billion euro ($ 550 billion) contingency plan to revive the European economy collapsed due to the outbreak of the new Corona virus.

Reuters quoted French Finance Minister Bruno Lemerre as describing the agreement as the most important economic plan in European history.

And Italian Prime Minister Giuseppe Conte had warned that the presence of the European Union itself would be in danger if the countries of the European Union did not come together to combat the pandemic.

For weeks, the countries of the Union suffered from difficulties to stand united in facing the crisis, amid disputes over funds, medical equipment, medicines, procedures at borders and trade restrictions, to reveal painful discussions among the members.

Reuters reported that Germany and France threw their weight to end the opposition of the Netherlands, which was insisting on economic conditions to provide emergency loans to the governments of countries that bear most of the repercussions of the pandemic, and after reassurances to Italy that the union will show greater solidarity.

Individual spending plans
Finance ministers of the 27 member states of the European Union agreed to welcome a set of individual national spending plans that were adopted by various countries of the continent and totaled about 3% of the Union's GDP, or nearly 600 billion euros.

Reuters described these plans, which were adopted before any coordination, as revealing the inherent inequality in Europe, with a clear distinction for rich countries such as Germany and the Netherlands that have the means to spend large sums of money in exchange for heavily indebted member states such as Spain and Italy that are in the front line with the Corona epidemic and do not have This means and risks scaring the markets if spending on crises increases.

Stability mechanism
The challenge for European finance ministers was to devise a plan to better share the burden without adversely affecting markets.

Germany has proposed a stabilization mechanism that is essentially based on the bailout fund created by the euro zone in 2012 during the debt crisis to help countries facing problems obtaining financing in the markets.

The total amount at the disposal of the European Stability Mechanism is about 420 billion euros, on condition that the needy governments implement reforms and receive the auditors sent by the European Union to the national capitals to audit their accounts.

Italy and Spain resisted this path because of these conditions that the "strict" Netherlands insisted on, but in the end it was agreed to open limited lines of credit for any country that requested them, on condition that they only spend on costs directly and indirectly related to fighting the Corona epidemic.

Suspension of debt and debt provisions
It was agreed to suspend the provisions of deficits and debts during the crisis, in addition to lifting the ban on government aid, even though the member states that considered their debts safer, led by Germany, had long refused to share their risks in favor of the financially weaker countries.

The European Investment Bank, run by member states, has proposed a European guarantee fund to be backed by guarantees from member states, which would make it possible to raise an additional 200 billion euros, mainly targeting European small companies.

Unemployment benefits
It was agreed to obtain a union-wide guarantee that could raise 100 billion euros to help certain types of national unemployment benefits programs with millions losing their jobs and jobs due to the epidemic.

The European Commission has also proposed to use the EU's long-term budget for the period from 2021 to 2027, and it is currently under negotiation, which could be strengthened, to serve as a "Marshall Plan" to deal with the crisis.