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Coronavirus: Why Merkel may help fund Europe's recovery plan
May 27, 2020
Last year, in the sumptuous setting of Aachen's historic town hall, Angela Merkel and Emmanuel Macron signed a treaty. The leaders promised to co-operate more closely and to re-fire the political and economic heart of the EU, sealing the deal with a kiss for the cameras.
How times have changed.
Their attempts to jointly reform, reinvigorate and reinforce the EU against the deep currents of populism and the shock of the UK's departure have, thus far, not amounted to much; the German chancellor apparently reluctant to lend her weight to the French president's imagined agenda for Europe.
But last week they announced another Franco-German plan. There could be no public display of affection this time as, via separate video links, the leaders unveiled their economic recovery proposal for a corona-ravaged Europe. The EU Commission, they said, should borrow €500bn ($545bn; £448bn) from the financial markets to fund the venture.
Unable to stand physically shoulder to shoulder, Mr Macron and Mrs Merkel had, nonetheless, thrashed out a compromise that took many analysts by surprise - not least because it represents a significant shift in position on the part of the German chancellor.
How will it work?
The German leader has always resisted the mutualisation of EU debt.
The idea that richer member states should be responsible for the debts and defaults of poorer ones has not played well in Berlin, where the idea of "coronabonds", so vociferously demanded by a number of member states, had ministers spluttering into their coffee.
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