EU nations have agreed on a sum of 500 billion Euros to help the bloc’s hard-hit economies


It’s been reported that tonight France and Germany have put their foot down to stop the opposition of the Dutch after they demanded that economic conditions be tied to any emergency credit being given.

Finance ministers in the EU have agreed on a sum of 500 billion Euros worth of support to help hard-hit economies due to the coronavirus and gave assurances to Italy that the bloc would show solidarity. 

This agreement does not include joint debt issuance, which Italy, France, and Spain pushed firmly to finance their economies to recover. Instead, it refers to whether “innovative financial instruments” should be used. Bruno Le Maire said that this agreement was the most crucial plan economically in the history of the EU. 

After weeks of falling out between the EU nation-states over money, medical equipment, borders, drugs and trade countries like Germany and Italy agree that there’s an “urgent need for solidarity in Europe, which is going through one of its most difficult hours, if not the most difficult”. 

The Italian Prime Minister even said that the very EU’s existence is at stake if the EU 27 couldn’t unite to tackle the vast pandemic. Merkel made it crystal clear that any push for an agreement to jointly issued debt would not be accepted, but said other monetary avenues for finance would be available. 

Officials said Merkel had to speak to Rutte asking him to stop opposing the deal that’s intended to be a safety net for governments, companies and people against the deep recession of the pandemic that is expected this year. 

This deal would bring the total financial responsibility of the EU to an eye-watering sum of 3.2 trillion Euros which is the most spent in the world on a fiscal response. 

In summary, if you read between the lines, many countries with the most debt have also been the countries that have been most hit by this recent pandemic. Whichever way you look at this, the battle has been between wealthy and poorer nations. The problem going forward is how much will the more affluent countries have to eventually cough up to cover the debts of those indebted countries that ask for help?

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