Europe’s Plan to Fund Economic Recovery Runs Into Obstacles
- Germany, France proposed a $548 billion debt-financed EU fund
- Austria, Denmark, Sweden and the Netherlands oppose joint debt
A pedestrian walks through an empty Gamla Stan square in Stockholm on March 26.
Photographer: Mikael Sjoberg/BloombergLess than 24 hours after Angela Merkel and Emmanuel Macron laid out a radical plan that would see the European Union collectively finance its response to a virus-induced recession, some countries were already expressing disapproval and threatening to veto the nascent proposal.
The German and French leaders on Monday threw their weight behind a plan to allow the EU’s executive arm issue 500 billion euros ($548 billion) of bonds, with the proceeds going to help member states affected most by the pandemic. Controversially, recipients of the funds won’t need to pay the EU back and the securities would be financed collectively. That means richer countries, like Germany, would be bankrolling poorer ones.