New EU fund will offer grants rather than loans to member states hit hardest by Covid-19 after a series of bitter rows between members.
France and Germany have proposed a €500bn (£439bn) recovery fund for struggling European Union economies as they battle to quell bitter infighting over the bloc’s halting response to the Covid-19 catastrophe.
Under new plans presented by French president Emmanuel Macron and German chancellor Angela Merkel, the 27 EU members would borrow jointly on financial markets to offer grants rather than loans to struggling nations.
The move by the EU’s two most powerful economies comes after Berlin rejected previous calls for so-called “coronabonds”, jointly issued debt to pay for tackling the crisis.
It represents a concession from Germany. Ms Merkel stressed the fund was a “one off” and said: “Because of the unusual nature of the crisis, we are choosing an unusual path.”