German Chancellor Angela Merkel has said her country must remain “clever and cautious” in handling the coronavirus crisis, as it is “not the end phase but still just the beginning”.
“We’ll have to live with this virus for a long time,” Ms Merkel told parliament ahead of an EU summit, via videolink.
She said Germany should be ready to “make very different, meaning much higher contributions to the EU budget”.
The video summit – the EU’s fourth on coronavirus – is now under way.
EU leaders are expected to sign off on a new €540bn (£470bn; $575bn) emergency fund to protect European workers, businesses and countries worst affected by the coronavirus outbreak. The details are yet to be worked out.
The €540bn would be released through EU institutions that already exist, including the European Stability Mechanism (ESM), the main bailout fund set up in response to the 2008 financial crisis.
European Council President Charles Michel told leaders they should aim to start releasing the funds by 1 June.
But a thornier issue is how much extra to commit to the EU budget to deal with this crisis, and how much the 27 member states will spend jointly. There are plans for a special recovery fund, like the post-1945 Marshall Plan.
Italy and some other states want EU help in aid grants, not loans. The scale of the crisis is such, they argue, that at least €1.5 trillion will be needed.
Mrs. Merkel said extra EU budget funds should be provided “in a spirit of solidarity” and for a limited time.
Italy, at the epicenter of the pandemic in Europe, has been especially vocal in urging its EU partners to jointly guarantee debt.
But Germany, the Netherlands and Austria oppose any mutualization of debt, in the form of so-called “coronabonds”. Under current EU rules countries cannot be made liable for each other’s debts.
Source:Â bbc.com