Franco-German initiative for European economic recovery in the wake of the COVID-19 pandemic

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Author (Corporate)
Publication Date 2020
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Summary:

Official information, media reports and analyses concerning the initiative jointly put forward by France and Germany aimed at fostering economic recovery across the European Union (EU) in the aftermath of the COVID-19 (coronavirus) pandemic.

Further information:

The proposed 'reconstruction fund' amounts to €500 billion injected to EU budget funds, and later allocated to the worst hit sectors and regions. Investment would be encouraged in particular in areas connected to environmental and digital transformation. The sum would be raised by the European Commission on the capital market and channel it to crisis-affected Member States as aid (grants) within the scope of the EU's Multiannual Financial Framework (MFF).

The Franco-German plan recognises that the impact of the coronavirus outbreak vary from country to country within Europe, placing cohesion in danger. This longer-term plan adds to the immediate economic response to the impact of the pandemic.

The Franco-German initiative was met with resistance by the so-called 'frugal' Member States, which had thus far only accepted a rescue fund that gave out loans to the worst-affected countries and regions. Media outlets reported on 23 May that this group of countries had submitted proposal to counter the Franco-German initiative.

The announcement of this proposal preceded the adoption of the European Commission's own proposal for a recovery fund to address the challenges imposed by the pandemic, as tasked by the European Council.

Related Link(s)
Commentary and Analysis
Politico, 18/05/2020: Berlin buckles on bonds in €500B Franco-German recovery plan https://www.politico.eu/article/berlin-buckles-on-bonds-in-e500b-franco-german-recovery-plan/
The Local (Germany), 19/05/2020: Can Merkel rally Germans behind massive EU recovery 'U-turn' package? https://www.thelocal.de/20200519/can-merkel-rally-germany-behind-massive-eu-recovery-u-turn-package
PISM: Spotlight, 19/05/2020: Eurobonds, Finally - Germany and France Propose New Support for the EU Economy https://pism.pl/publications/Eurobonds_FinallyGermany_and_France_Propose__New_Support_for_the_EU_Economy
Euro|topics, May 2020: Will the Merkel-Macron plan die a quick death? https://www.eurotopics.net/en/240795/
Bloomberg, 20/05/2020: Germany and France Move Closer to a Euro Bond https://www.bloomberg.com/opinion/articles/2020-05-20/coronavirus-germany-and-france-move-closer-to-a-euro-bond
Foreign Policy, 20/05/2020: Are the Germans Edging Closer to True Fiscal Union? https://foreignpolicy.com/2020/05/20/germany-fiscal-union-france-euro-fund/
Politico, 20/05/2020: German conservatives’ eurobond awakening https://www.politico.eu/article/germany-conservatives-eurobond-awakening/
Foreign Policy, 20/05/2020: Are the Germans Edging Closer to True Fiscal Union? https://foreignpolicy.com/2020/05/20/germany-fiscal-union-france-euro-fund/
The Economist, 21/05/2020: Who will pay for the pandemic? The Merkel-Macron plan to bail out Europe is surprisingly ambitious https://www.economist.com/europe/2020/05/21/the-merkel-macron-plan-to-bail-out-europe-is-surprisingly-ambitious
Spiegel Online International, 22/05/2020: France and Germany Show the Way Forward in the COVID-19 Crisis https://www.spiegel.de/international/europe/france-and-germany-show-the-way-forward-in-the-corona-crisis-a-89aa5aac-5cba-429f-b982-37772161bb7f
IAI: Commentary No 20/42, 25/05/2020: When the Franco–German "Couple" Starts Making Sense Again https://www.iai.it/en/pubblicazioni/when-franco-german-couple-starts-making-sense-again
ZEW: Expert Briefs No. 07/20, 25/05/2020: Simulating the Distributive Effect of the Macron-Merkel-Recovery Fund https://www.zew.de/en/publikationen/simulating-the-distributive-effect-of-the-macron-merkel-recovery-fund/?cHash=0e870a7e55991f3191f90a6f57a8e42b
Euro|topics, May 2020: "The frugal four" versus Merkel and Macron https://www.eurotopics.net/en/241053/

News
Deutsche Welle, 18/05/2020: Coronavirus: France, Germany propose €500 billion recovery fund https://p.dw.com/p/3cQsd
Reuters, 18/05/2020: France, Germany propose 500 billion euro EU Recovery Fund https://www.reuters.com/article/idUSKBN22U275
EurActiv, 18/05/2020: Merkel and Macron roll out €500 billion COVID-19 recovery initiative https://www.euractiv.com/section/economy-jobs/news/merkel-and-macron-roll-out-e500-billion-covid-19-recovery-initiative/
BBC News, 18/05/2020: Coronavirus: France and Germany propose €500bn recovery fund https://www.bbc.co.uk/news/world-europe-52712370
Politico, 18/05/2020: France, Germany propose €500B EU recovery fund https://www.politico.eu/article/france-germany-propose-e500b-eu-recovery-fund/
Deutsche Welle, 19/05/2020: Germany, France lobby hard for EU recovery plan https://p.dw.com/p/3cSpy
EUObserver, 19/05/2020: Macron and Merkel propose €500bn EU recovery fund https://euobserver.com/coronavirus/148405
EurActiv, 20/05/2020: Europe’s Franco-German ‘motor’ sputters back to life https://www.euractiv.com/section/future-eu/news/europes-franco-german-motor-sputters-back-to-life/
EurActiv, 20/05/2020: ‘Frugal Four’ working on counter-proposal to Franco-German recovery fund https://www.euractiv.com/section/economy-jobs/news/frugal-four-working-on-counter-proposal-to-franco-german-recovery-fund/
The Local (Denmark), 23/05/2020: Coronavirus: 'Frugal' Denmark, Sweden and Austria outline alternative EU recovery plan https://www.thelocal.dk/20200523/frugal-four
Deutsche Welle, 23/05/2020: 'Frugal four' nations counter Franco-German EU initiative https://p.dw.com/p/3cfZw
Reuters, 24/05/2020: Franco-German 500 billion euro recovery fund step towards EU fiscal union: Centeno https://uk.reuters.com/article/idUKKBN2300HC
Bloomberg, 26/05/2020: EU Recovery Plan Set for Tough Talks With Sweden Voicing Doubts https://www.bloomberg.com/news/articles/2020-05-26/eu-recovery-plan-set-for-tough-talks-with-sweden-voicing-doubts
Euronews, 26/05/2020: Frugal four take on France and Germany as coronavirus recovery plan divides EU https://www.euronews.com/2020/05/26/frugal-four-take-on-france-and-germany-as-coronavirus-recovery-plan-divides-eu
The Guardian, 26/05/2020: Franco-German plan for European recovery will face compromises https://www.theguardian.com/world/2020/may/26/franco-german-plan-for-european-recovery-will-face-compromises

Official
Germany: Federal Chancellor: News, 18/05/2020: Franco-German Initiative: Emerging stronger from the crisis https://www.bundeskanzlerin.de/bkin-en/news/dt-franz-initiative-1753890
Germany: Federal Chancellor: Statement on the Video Conference (18 May 2020) - Overcoming the crisis united and emerging from it stronger https://www.bundeskanzlerin.de/bkin-en/news/statement-nach-corona-kabinett-1754044
France: Foreign Ministry: Article, 18/05/2020: European Union – French-German initiative for the European recovery from the coronavirus crisis https://www.diplomatie.gouv.fr/en/coming-to-france/coronavirus-advice-for-foreign-nationals-in-france/coronavirus-statements/article/european-union-french-german-initiative-for-the-european-recovery-from-the
European Commission: Statement by the European Commission, 18 May 2020 https://ec.europa.eu/commission/presscorner/detail/en/statement_20_902

ESO Records
European reaction to the outbreak of Coronavirus (COVID-19) https://www.europeansources.info/record/european-reaction-to-the-outbreak-of-coronavirus/

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