Merkel: "EU Member States Still Like Grains of Sand... Must Agree on COVID-19 Recovery Fund"

EU Presidency Term Begins... Likely to Face First Challenge of Establishing COVID-19 Recovery Fund

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] German Chancellor Angela Merkel expressed difficulties to European Union (EU) countries in establishing a recovery fund to overcome the economic slowdown caused by the novel coronavirus disease (COVID-19).

According to Bloomberg, on the 1st (local time), Chancellor Merkel, on the first day of Germany's presidency of the EU Council in the second half of this year, responded to criticism from lawmakers in Berlin by stating, "I want to make it clear that EU member states still have significant differences of opinion regarding the establishment of the recovery fund." The 27 EU member state leaders are scheduled to hold talks on the 17th to create a recovery fund worth 750 billion euros (approximately 1,011 trillion won), but have yet to reach an agreement.

In her opening remarks, Chancellor Merkel pointed out the limitations of progress by saying, "We must also prepare for the possibility that the Brexit agreement (the UK's withdrawal from the EU) may not come to fruition."

Earlier this month, EU member states agreed on the urgent need for measures to recover the economies of countries affected by COVID-19 and discussed a joint recovery fund. The European Commission plans to borrow money from financial markets and support member states, with two-thirds of the 750 billion euros provided as grants and the remainder as loans. However, EU member states have shown disagreements over the size of the fund and the methods of grants and loans. In particular, four countries?Austria, the Netherlands, Sweden, and Denmark?oppose large-scale joint debt.

Bloomberg commented, "The issue of establishing the recovery fund will be the most contentious during the first month of the rotating presidency," adding, "The situation will become more complicated due to the financial gap left by the UK's departure."

This content was produced with the assistance of AI translation services.