Angela Merkel

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  3. Tough negotiations expected over EU rescue plan

    Laurence Peter

    BBC News, Europe desk

    Printing worker in Madrid, June 2020
    Image caption: A printing worker in Madrid - the crisis threatens businesses EU-wide

    German Chancellor Angela Merkel is trying to rally the rest of the EU to back a huge recovery fund, faced with the severe economic impact of the coronavirus crisis.

    EU leaders are to begin tough negotiations on Friday in a video summit, but already there are concerns about countries getting even deeper into debt.

    The EU Commission is proposing a €750bn (£676bn; $843bn) fund, made up of €500bn in grants and €250bn in loans. But it requires unanimous EU approval.

    Most of the aid would go to countries hardest hit by the coronavirus crisis, notably Italy and Spain. It would be added to the planned €1.1 trillion seven-year EU budget, not yet agreed.

    Merkel and France’s President Emmanuel Macron strongly back the controversial plan for €500bn in grants. But grants, unlike loans, would mean taking on shared debt – something Germany previously opposed doing.

    The Netherlands, Denmark, Sweden and Austria, nicknamed the “frugals”, want a smaller aid total, and only in the form of loans. Others, especially Italy, argue that solidarity is needed now, to keep the single market working and stop the EU fragmenting.

  4. Franco-German plan for €500bn aid fund

    President Macron and Chancellor Merkel, 18 May 20
    Image caption: President Macron and Chancellor Merkel gave a joint press conference by video link

    The leaders of France and Germany have proposed a European recovery fund worth €500bn (£447bn; $545bn) to help EU countries hit hardest by the coronavirus crisis.

    It would be in addition to a huge loan package worth €540bn set to be released through existing EU mechanisms from 1 June.

    The new fund still requires approval by all 27 member states to be launched.

    It was announced at a joint video conference by French President Emmanuel Macron and German Chancellor Angela Merkel.

    Mr Macron said this aid would be made up of grants, not loans. And Mrs Merkel said the cost could be spread across future EU budgets.

    It is seen as the EU's worst crisis to date - eclipsing the 2008 financial crisis.

    Correspondents see the proposed fund as a move by Germany, under pressure from France, Italy and some other states, towards mutualising debt. That has long been a source of friction in the EU.

    Both leaders regretted that Europe's lockdowns - including drastic border closures - had not been co-ordinated.