A major recovery fund worth €750bn (£670bn; $825bn) has been proposed by the EU’s executive Commission to help the EU tackle an “unprecedented crisis”.
The package will be made up of grants and loans for every EU member state.
Economies across the 27-nation EU bloc have been ravaged by the Covid-19 pandemic, but several southern states had big debts even before the crisis.
Commission President Ursula von der Leyen said “this is Europe’s moment”.
“Things we take for granted are being questioned. None of that can be fixed by any single country alone,” she told the European Parliament. “This is about all of us and it is way bigger than any of us.”
The Commission has dubbed the plan Next Generation EU. Without the backing of all 27 EU member states, it cannot go ahead. But Germany and France have backed plans for the money to be raised on the capital markets.
Economy Commissioner Paolo Gentiloni said the fund was a “European turning point” that would be added to instruments that had already been launched.
Several “frugal” states object to taking on debt for other countries. Austria, the Netherlands, Denmark and Sweden reject the idea of cash handouts to relatively poorer countries rather than low-interest loans.
What did the Commission leader say?
Mrs von der Leyen said the €750bn fund would be made up of €500bn in grants and €250bn in loans. It would be raised by lifting the EU’s resources ceiling to 2% of EU gross national income and would be reliant on the EU’s strong credit rating.
When added to a proposed €1.1 trillion budget for 2021-27, the €750bn recovery fund would bring to €1.85tn the total amount that the Commission says will “kick-start our economy and ensure Europe bounces forward”.
The Commission President said the EU’s much-cherished four freedoms had to be fully restored – those of freedom of people, goods, services and capital.
She said “this is an urgent and exceptional need for an urgent and exceptional crisis”.
The money raised on the capital markets would be paid back over 30 years between 2028 and 2058, but not later.