Monday, Emmanuel Macron and Angela Merkel proposed a European recovery plan of 500 billion euros. Via a debt pooling mechanism, this must help the European Union to overcome the economic crisis caused by the coronavirus epidemic. 


The original initiative aims to help the European Union overcome the historic crisis caused by the coronavirus pandemic. Monday, Emmanuel Macron and Angela Merkel proposed a recovery plan of 500 billion euros, via a mechanism for pooling the European debt, which Germany had however opposed several times in the past. Europe 1 explains the details of this plan, for which negotiation between the 27 Member States could prove complicated. 

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What did Macron and Merkel offer?

The Franco-German couple is proposing a plan, which would take the form of a temporary and targeted stimulus fund. Endowed with "500 billion euros", this plan comes within the framework of the next budget of the European Union. The objective, explained Angela Merkel and Emmanuel Macron, is in particular to "support a sustainable recovery which restores and strengthens growth in the EU". 

These 500 billion would be added to the approximately 500 billion already decided by the finance ministers of the euro zone and made up of lending capacities in particular. 

Who will benefit from this money?

The funds "will be targeted at the difficulties linked to the pandemic and its repercussions". It will be an exceptional supplement, "with a volume and an expiration date clearly specified", according to the proposal. Paris and Berlin also insist that the funds will be allocated "in accordance with European priorities". 

France itself could use this recovery plan. On LCI, the Minister of Economy Bruno Le Maire thus indicated that this plan could be used to "renovate the hospital" and support the sectors hit by the crisis. "When we need, for example, to renovate our hospital, we can rely on this support (...) and funding from the European Commission," he said. Other sectors, still according to the minister, could also benefit from this plan, such as tourism, the automobile industry and aeronautics. Emmanuel Macron, for example, gave the example of Italian tourism.

If the Franco-German proposal is adopted, it will in all cases be for the Commission to hold the purse strings, therefore to give its opinion. "The Commission will have to define where this money will be spent," said Angela Merkel.

How will it work?

The fund would be financed by European Commission market loans "on behalf of the EU". Once collected, this money would then be paid back into "budgetary expenditure" to European countries and "to the sectors and regions most affected" by the crisis. And these sums will not be reimbursed "by those who use this money", assured Emmanuel Macron. In this, it is therefore not a question of "loans", but of "endowments" direct to the countries most affected.

How, then, will reimbursement work? First option: these endowments "may be reimbursed by the Member States by a distribution key which depends on your weight in the budget", explained Emmanuel Macron. The other possibility is to set up a system of "contributions". Finally, Emmanuel Macron left the door open to "other mechanisms" which have yet to be defined "in conjunction with the European Commission".


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Why is it new?

If adopted, such a plan would constitute an unprecedented step towards pooling debt at European level. "There will indeed be, for the first time in European history, common debt, raised to finance direct expenditure in the Member States", summed up Bruno Le Maire. 

An option to which Berlin, but also several countries of Northern Europe, have long been hostile. During the financial crisis and the threat of Grexit, the EU was torn apart, almost to the breaking point, on this thorny issue. 

The original aspect of this recovery plan therefore also resides in this weakening of the German position. Why, then, did Berlin agree to join forces with such a project? Invited on Monday from Europe 1, Secretary of State for European Affairs Amélie de Montchalin, recalled that "a few weeks ago, what was announced this evening seemed completely unattainable". For this member of the government, the coronavirus crisis showed Germany that it "depended on its neighbors", and that it "could not restart alone". 

What are the reactions in Europe?

If the presentation of this plan is already an important first step for the Franco-German couple, it now remains for the latter to convince all the Member States. However, between the 27, negotiation could prove delicate, following the traditional lines of the Union between countries of the "North" and "South". 

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On Twitter, Austrian Chancellor Sebastian Kurz thus reaffirmed that he was only in favor of "loans", and not a pooling of debt. Conservative, Kurz opposes an increase in the EU budget and prefers to redistribute his resources. He met on this subject with the leaders of Denmark, the Netherlands and Sweden, other countries likely to oppose the Franco-German proposal.

In the entourage of Italian Prime Minister Giuseppe Conte, we welcome the proposal of Emmanuel Macron and Angela Merkel, described as "a step in the right direction, that Italy had hoped for from the start". Same story in Spain with the socialist government of Pedro Sanchez.

For her part, the President of the European Commission, Ursula von der Leyen, who is to present her own plan for the economic recovery of the EU on 27 May, "welcomed the constructive proposal from France and of Germany". This proposal, she added, "goes in the direction of that prepared by the Commission, which will also take into account the views of all Member States and the European Parliament".