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HEALTH

Macron and Merkel propose €500 billion plan to relaunch EU economy

France and Germany on Monday proposed a €500 billion recovery fund to finance the relaunch of the European Union's economy, which is facing the biggest economic crisis since the World War II because of the coronavirus pandemic.

Financed by “borrowing from the market in the name of the EU”, the fund will flow to the “worst hit sectors and regions” in the 27-member bloc.

Countries benefiting from the financing would not have to repay the sum, said France's President Emmanuel Macron. 

“What is sure is that these €500 billion will not be repaid by the beneficiaries,” he said at a joint video news conference with Chancellor Angela Merkel.

“We are convinced that it is not only fair but also necessary to now make available the funds… that we will then gradually repay through several future European budgets,” said Merkel.

The borrowing would not amount to the so-called “coronabonds” sought by Italy and Spain because it would be made and repaid under the framework of EU budgets, rather than a direct mutualisation of debt by member states.

But it nevertheless marks a major shift by Germany, which has until now rebuffed talk of common borrowing.

Germany, the Netherlands and other rich countries had long seen coronabonds as an attempt by the indebted south to unfairly take advantage of the north's fiscal discipline.

But Merkel said the seriousness of the crisis meant that “solidarity” must be the order of the day.

“The aim is to ensure that Europe comes out of the crisis more cohesive and with more solidarity,” said Merkel, calling the proposal “courageous”.

 

'Constructive'

EU chief Ursula von der Leyen on Monday hailed the plan proposed by France and Germany to relaunch the
bloc's economy.

“I welcome the constructive proposal made by France and Germany,” said Von der Leyen who is head of the European Commission, the EU's executive arm that would implement the plan.

“It acknowledges the scope and the size of the economic challenge that Europe faces,” she said.

“This goes in the direction of the proposal the commission is working on which will also take into account the views of all member states and the European Parliament,” Von der Leyen said.

The joint stance by France and Germany is significant as it will put pressure on the EU's more frugal minded member states to contribute the extra money needed to pay for the plan.

The €500 billion will come in addition to the EU's normal spending plans for 2021 through 2027, which are currently under negotiation.

Europe has seen some of the worst effects of the pandemic, with highly indebted countries such as Italy and Spain calling for help from richer partners such as Germany and the Netherlands.

Those countries are reluctant to get into a major borrowing scheme with their southern partners that are seen as overspending and reluctant to implement necessary economic reforms.

“It is going to take willingness to reach an agreement and everyone is going to have to shift their positions,” a European official said on condition of anonymity.

The latest statements by German Chancellor Angela Merkel “will help”, the source added.

Member comments

  1. Wow, what a great plan! Borrow in the market, no doubt millions of EUs will find their way into the pockets of middlemen, then lend it to already indebted nations. Whose corrupt politicians and mafia will skim a good portion. Furthermore, why don’t they wait a few more months to act, so Italy, Spain, and Greece can sinker deeper in debt? Many knew the EU was inept, except in dictating policies, immigration rules, and inane laws, but this crisis has shown how utterly corrupt they are. Germany, France, and Holland acted like Jackals instead of a single union. Hopefully, this will quicken the demise of the EU, and a replacement will be created, which does two things – makes trade more efficient and border crossings for EUROPEANS and Visa holders seamless.

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FOOD & DRINK

Kinder pulls 3,000 tonnes of products after salmonella cases

Children in nine European countries, including 81 in France, were affected

Kinder pulls 3,000 tonnes of products after salmonella cases

More than 3,000 tonnes of Kinder products have been withdrawn from the market over salmonella fears leaving a dent of tens of millions of euros, a company official has told France’s Le Parisien.

Nicolas Neykov, the head of Ferrero France, said the contamination came “from a filter located in a vat for dairy butter”, at a factory in Arlon in Belgium.

He said the contamination could have been caused by humans or raw materials.

Chocolate products made at the factory in Arlon, southeastern Belgium, were found to contain salmonella, resulting in 150 cases in nine European countries.

Eighty-one of these were in France, mainly affecting children under 10 years old.

The factory’s closure and the health concerns were blows to its owner, Italian confectionery giant Ferrero, coming at the height of the Easter holiday season when its Kinder chocolates are sought-after supermarket buys.

“This crisis is heartbreaking. It’s the biggest removal of products in the last 20 years,” Neykov said.

But the company hoped to be able to start up the factory again, with 50 percent of health and safety inspections to be carried out by an approved “external laboratory” in the future, instead of the previous system of only internal reviews.

“We have asked for a reopening from June 13 to relaunch production as soon as possible,” he added.

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