The two countries proposed the establishment of a recovery fund in the amount of €500 billion, roughly $547 billion U.S., to help EU countries and industries impacted by COVID-19.
Unlike an earlier rescue package that was created to help EU countries that offered loans, this initiative will offer grants, officials said.
The plan is not expected to be able to send any funds until 2021 to the areas hardest hit and will likely target initiatives that the EU prioritizes, such as digitalization and fighting climate change.
“It’s a historic breakthrough,” French Finance Minister Bruno Le Maire said Tuesday. “We will be able to support the economic recovery in the countries most hit by the virus.”
“The second consequence is political: France and Germany affirm loud and clear their determination to see solidarity among European Union members placed at the heart of the European construction,” Bruno said, further calling it “a historical step for the whole European Union.”
Macron and Merkel participated in a video conference to discuss the new proposal.
Merkel said the plan will “support a sustainable recovery that restores and enhances growth in the EU, Germany and France,” as well as “support an ambitious, temporary and targeted Recovery Fund.”
The proposal still faces opposition in parts of the EU, and it is unclear at this time if the proposal would be separate from or included in the recovery plan that the European Commission was planning to roll out May 27.
Commission spokesperson Eric Mamer reportedly said the new proposal “goes in the direction we are heading in,” but the commission’s plan would not likely “copy and paste” the proposal as is.
Germany and France have the largest economies in the EU and are regarded as a political powerhouse when the nations work together.