Franco-German recovery fund proposal goes same way as EU executive's

BRUSSELS (Reuters) - A Franco-German proposal for a recovery fund that would issue grants to EU countries worst hit by the coronavirus pandemic goes in the same direction as the European Commission’s proposal on such a fund to be unveiled next week, the Commission said.

France and German made a joint proposal on Monday to create a 500 billion euro fund, financed through European Commission borrowing and repaid via the joint European budget.

The recovery plan would be supported by commitments from EU governments to undertake healthy economic policies and reforms.

“I welcome the constructive proposal made by France and Germany,” Commission President Ursula von der Leyen said in a statement.

“It acknowledges the scope and the size of the economic challenge that Europe faces, and rightly puts the emphasis on the need to work on a solution with the European budget at its core,” she said. “This goes in the direction of the proposal the Commission is working on which will also take into account the views of all member States and the European Parliament.”

The Commission is to unveil its own plan on May 27th.

Reporting by Jan Strupczewski; Editing by John Chalmers