London Daily

Focus on the big picture.
Thursday, Sep 18, 2025

EU leaders agree on a massive, €750bn covid-19 recovery deal

EU leaders agree on a massive, €750bn covid-19 recovery deal

E.U. Adopts Groundbreaking Stimulus to Fight Coronavirus Recession. For the first time, the 27 countries will borrow and spend vast sums collectively. The $857 billion package includes unprecedented steps to help less wealthy countries, including selling collective debt and giving much of the money as grants, not loans.
The European Council, composed of the leaders of the EU’s 27 member states, agreed on a €750bn ($858bn) package to help countries’ economies recover from covid-19, part of a €1.8trn EU budget for the next seven years. The hard-fought deal shows that the bloc’s members have the sense of solidarity needed to respond collectively to disasters, despite internal political splits and grumbling from some of the rich members that foot most of its bills.

The covid-19 recovery package began as a proposal by Germany’s chancellor, Angela Merkel, and France’s president, Emmanuel Macron. It responded to the threat that the coronavirus could exacerbate the EU’s economic divisions: countries with severe epidemics, or heavy debt loads constraining government spending (such as Italy), faced much worse recessions than those with light epidemics and little debt (such as Germany).

The European Commission, the EU’s executive arm, had originally envisioned €500bn in grants and €250bn in loans. Most significant, the package was to be financed with bonds issued by the commission—the first time EU countries would issue such an enormous amount of collective debt.

The proposal for grants was bitterly opposed by a group of wealthy, mostly northern net-contributor states (nicknamed the “frugals”), led by the Netherlands and joined by Austria, Denmark, Finland and Sweden.

Mark Rutte, the Dutch prime minister, insisted that countries receiving grants carry out economic reforms, and that each individual country be empowered to veto every other country’s plan to spend the aid. As the summit stretched into a third and then a fourth day, the countries most eager for aid—Italy, Spain and Portugal—reproached the “frugals” for failing to compromise.

Another dispute centered on Hungary, where the increasingly autocratic government of Viktor Orban faces EU disciplinary proceedings over the rule of law, and where EU investigators have found extensive corruption. The commission (backed by France, the Netherlands and others) wanted measures to cut off aid if countries failed to respect the rule of law. For Hungary and Poland, which also faces rule-of-law proceedings, this was a red line.

In the end, these seemingly principled disputes were resolved through old-fashioned horse-trading. Mr Rutte and the frugals saw the amount of grants cut to €390bn, while loans were raised to €360bn. The rebates they get to lower their net contributions to the EU budget were increased, along with the amount they get to keep from customs revenue (most of which goes to the EU).

To placate their demands to hold down the overall EU budget, there were cuts to scientific research, industrial investment, rural development and other programmes. Mr Orban and Charles Michel, the European Council president, settled on language putting off mechanisms for rule-of-law sanctions to another day.

The overall result fell short of what some had hoped for. But it was greeted as a triumph in Paris and Berlin, and elsewhere by believers in a more powerful and more federal EU. The programme is equivalent to 4.7% of the EU’s GDP, a macroeconomically significant amount that comes on top of large stimulus spending by national governments. Stockmarkets were buoyed by the news. And it means the EU will engage in large-scale joint borrowing for the first time, giving the bloc significant fiscal resources to fight a recession collectively.

The resistance of Mr Rutte and the frugals was based on the fear that once Europe has agreed to use collective debt once, it will probably do so again. For advocates of a stronger EU, that is not a fear but a hope.
Newsletter

Related Articles

0:00
0:00
Close
Macron and his wife to provide 'scientific photographic evidence' that she is a real woman
US Tech Giants Pledge Billions to UK AI Infrastructure Following Starmer's Call
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
DeepMind and OpenAI Achieve Gold at ‘Coding Olympics’ in AI Milestone
SEC Allows Public Companies to Block Investors from Class-Action Lawsuits
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Federal Reserve Cuts Rates by Quarter Point and Signals More to Come
Effective and Impressive Generation Z Protest: Images from the Riots in Nepal
European manufacturers against ban on polluting cars: "The industry may collapse"
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Trump: Cancel quarterly company reports and settle for reporting once every six months
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
US Launches New Pilot Program to Accelerate eVTOL Air Taxi Deployment
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
×