European Union leaders have created a $858 billion recovery fund to rebuild EU countries struck by coronavirus, the BBC reported. Combined with an increased EU budget of $1.3 trillion, the EU now has an unprecedented $2 trillion in spending power.
This was completed after four days of fraught discussion between the EU leaders.
French President Emmanuel Macron described the deal as “historic.”
“We showed collective responsibility and solidarity and we show also our belief in our common future,” said Charles Michel, European Council president.
Funds will be spread across three areas, reported CNN. They will be used to roll out new measures for economic reform, to help businesses that have been affected by the virus, and to invest in protection against “future crises.”
The recovery plan involves €$858 billion in grants and loans, including $446 billion in grants for countries hit hardest by the virus. Italy and Spain are expected to receive the most aid, according to the BBC.
Michel said this was “the right deal for Europe right now.”
“We did it! Europe is strong. Europe is united,” he said.
— Charles Michel (@eucopresident) July 21, 2020
The plan was completed after tense negotiations over the past four days. Lasting more than 90 hours, the summit became the second longest in EU history. European Commission President Ursula von der Leyen said the lengthy negotiations were “worth it,” noted CNN.
Sweden, Denmark, Austria and the Netherlands — known as the “frugal four” — opposed the original grant amount, concerned the debt would strain their local economies at the expense of funding other countries.
During discussions, Macron reportedly banged his fists on the table and told the “frugal four” they were putting the project in jeopardy. However, he has since praised the efforts of his fellow leaders, according to NBC.
“There are 27 of us around the table and we managed to come up with a joint budget. What other political space in the world is capable of that? None other,” he said.
France and Germany were close negotiating partners during the summit, with Macron and German Chancellor Angela Merkel pushing for grants to be raised to $573 billion.
“We have laid the financial foundations for the EU for the next seven years and came up with a response to this arguably biggest crisis of the European Union,” said Merkel.
The European Commission will borrow the $858 billion from international markets, with plans to repay the borrowed amounts by 2058.
The deal still needs to be approved by the European Parliament, NBC reported.
In light of Brexit, the United Kingdom was not involved with the negotiations, although they have recorded more coronavirus deaths than any European country.