European Union leaders recently reached a historic agreement for economic recovery in the post-Coronavirus pandemic, after hard negotiations in Brussels that lasted four days and were characterized by a pergence of positions between their countries. The plan is worth 750 billion euros, which will be financed by a group loan.
The plan includes a 750 billion euro fund to support the European economy, which faces a historic recession, an amount which the European Commission can borrow. This amount is distributed between $ 390 billion in aid and 360 billion euros in loans.
Aid is to be granted to the hardest hit countries in terms of Covid-19 pandemic, and it represents a shared debt that the 27 countries must pay collectively. As for loans, the beneficiary countries must repay them.
The issuance of this joint debt is the first step of its kind to be taken by the Union. It is based on a French-German proposal that clashed with strong opposition from certain countries, as we saw in a previous article, which are: the Netherlands, Austria, Denmark and Sweden, and Finland.
The plan also adds to the European Union's long-term budget for the period 2021-2027, which amounts to 1074 billion euros, distributed to 154 billion euros per year.
During this difficult European summit, those unsatisfied countries, that some call "stingy", have threatened to thwart the economic recovery plan that particularly benefits southern countries such as Italy and Spain, which are the hardest-hit countries by the pandemic, let alone they consider them very unstrict at the financial level.
In general, there are three countries particularly affected by the recession: Italy, Spain and France, with GDP declining by more than 10 percent in 2020. Italy will see also its GDP dropping by 11.2 percent in 2020 before improving in 2021 (+6, 1%), while it will decline in Spain by 10.9% in 2020 and then improve in the following year to reach + 7.1%. In France, it could decline by 10.6% this year, and then recover to 7.6% the following year.
Typically, after the hard success of such summits which follow marathon meetings, French President Emmanuel Macron and German Chancellor Angela Merkel welcomed the European Union’s “historic day”. Macron saw it as “a historic change for our European continent and the eurozone”. On her part, Merkel expressed her “satisfaction”, as Europe, after difficult negotiations, could eventually move together.
This remarking return to the Franco-German bilateral influential role, after months of cold relations, has revived the European project itself which suffered, and still, from the Covid-19 crisis.
Despite what can be written and said, the European Union is an institutional and monetary unit, mostly unparalleled, in spite of the successive crises it witnesses.
It is a geographical and intellectual project that has been thought of by prominent intellectuals, philosophers, scholars and jurists, before it becomes a real political project with strong institutions that bring together heads of state, government ministers, experts and parliamentarians of nations.
Although the union’s countries varied in terms of the degree of economic and financial progress and the prevailing political and social philosophy, they were able, together through the wisdom of some of their members and lofty monotheistic principles, to issue a single European currency that replaced the national currencies, and contributed to the gradual establishment of a real economic unity, and the transformation of the markets of the member states, through European integration, into one single internal market.
The European Union has been able to achieve these and other achievements thanks to the prevailing confidence factors, and thanks to political, economic and legislative factors.
The crises that the EU have been witnessing are natural for these kinds of blocs. Any union must be frustrated by some things, the important thing, however, is how it can overcome it and what are the pivotal states that are considered umbrellas. In the case of the European Union, Germany and France (despite three brutal wars between them in their common history) are the two main countries that direct and indirectly lead the ship of the European Union.
Anyone who follows developments can notice that whenever there is a serious crisis in any of the countries of the Union, the two heads of state met in controversial conditions and developed a smart road map to confront them before the European Union institutions even meet, and here lies the secret of success.
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