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Europe coronavirus rescue proposal: How it works and why it may fail - Business Insider

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France and Germany's $550 billion coronavirus rescue proposal is a 21st century Marshall Plan, but it could be dead before it even gets started

Germany and France on Monday proposed a European Recovery Fund worth €500 billion to tackle the economic fallout from the coronavirus pandemic.

"We have to act - we have to act European so that we can get out of this crisis well," German Chancellor Angela MerkelThe idea is that the funds will be raised and distributed by EU's executive body, the European Commission, and be handed out in the form of grants to sectors like travel and hospitality, which have been ravaged by the pandemic.

Such a plan would require consent of all 27 EU countries, with some already indicating that they will not back it. "We view the French-German proposal as a very significant step forward in the European institutional architecture. If adopted as outlined, the grant-based recovery fund will be of similar importance as the Marshall Plan was for the receiving countries in the late 1940s/early 1950s."

 

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Whenever a word “Marshall Plan” appears instantly a question pops out: how fair is it going to be to each of EU economies?

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