The Franco-German proposal for a joint recovery fund to boost the economic recovery from the coronavirus crisis marks a significant step toward greater integration between EU countries, according to Mário Centeno, the president of the Eurogroup.
France and Germany on Monday proposed a €500 billion recovery fund that would give cash to EU countries to help them kick-start their economies after the coronavirus crisis.
The fund would be temporary, would borrow money on the financial markets, and be distributed to governments through the EU budget as grants, not loans.
The fund “would be a big step toward a fiscal union and a truly functioning monetary union,” Centeno told German news outlet Welt Am Sonntag, in an interview.
The Portuguese finance minister, who also chairs the informal club of euro country ministers, said he hoped the details of how the financial instrument will operate are agreed on “before summer,” but also warned that the negotiations between EU countries will be “very complicated.” The fund must be approved by all EU countries.
How the European Commission should share the cash between EU capitals is still unclear. “Before we talk about the distribution of money, we need to know how much each country needs. The money from the reconstruction fund must go to the countries most affected by the crisis,” he said.
Italy is aiming to receive €100 billion from the Franco-German proposal, an estimate many consider too high.
“We don’t know whether 100 billion is too much or too little. The answer to the crisis must be up to the challenge, and Italy is a very big country, ”said Centeno.