European Union leaders agreed on Thursday (23 April) to create a trillion euro emergency fund to provide immediate support for member states to help them recover from the Covid-19 pandemic and save their coronavirus-ravaged economies. “We endorsed the agreements on three important safety nets for workers, businesses and sovereigns, amounting to 540 billion euros,” said President of the European Council Charles Michel. “We call for the package to be operational by 1 June 2020. We also agreed to work toward a recovery fund which is needed and urgent.” Although Italy’s Prime Minister Giuseppe Conte hailed “great progress” after the online summit ended, French President Emmanuel Macron said differences continued between EU governments over whether the fund should be transferring grant money, or simply making loans.
With Europe facing a severe economic shock from the Covid-19 outbreak, the eurozone’s economic growth for 2020 is forecast to contract between 5-15%, as European Central Bank Governor Christine Lagarde told the leaders, which would make it the worst year since the common currency was introduced in 1999. EU leaders salso discussed a longer term recovery plan, but they were struggling to come to an agreement over debt distribution, with northern European countries, like the Netherlands and Germany, reluctant to share too much debt out of fear of having to foot the bill for others. Also French President Emmanuel Macron warned in Paris that “if Europe raises debt to loan to others, that won’t live up to the response we need,” adding that it would saddle already heavily indebted countries, notably Greece, Italy and Belgium, with yet more debt.
Meanwhile, as Covid-19 infection rates across the continent have begun to fall, some European countries, including Germany, Czech Republic and Austria, are cautiously easing their societies back to some semblance of daily life. But German Chancellor Angela Merkel has cautioned that the pandemic has only just begun, adding that the country should be prepared to open its pocketbook to help the EU. “We’re not living in the final phase of the pandemic, but still at the beginning,” Merkel said, adding that “We will be living with this virus for a long time.” And this will be particularly true in the case of southern EU members that are heavily dependent on tourism, which led French MEP Younous Omarjee to warn that this year‘s tourist season in Europe is shaping up to be „a disaster“. Speaking at a specially-convened meeting of Parliament’s regional development committee earlier this week, Omarjee also said that “We do not need a small budget but precisely the opposite: a big budget with great European ambition across all EU policies.”
