Euro rises as heads of state finally thrash out agreement on day five
European Union leaders clinched an “historic” deal on a massive stimulus plan for their coronavirus-throttled economies in the early hours of Tuesday, after a fractious summit lasting almost five days.
The agreement paves the way for the European Commission, the EU’s executive, to raise billions of euros on capital markets on behalf of all 27 states, an unprecedented act of solidarity in almost seven decades of European integration.
Summit chairman Charles Michel called the accord, reached at a 5.15 a.m. (0315 GMT), “a pivotal moment” for Europe.
Many had warned that a failed summit amid the coronavirus pandemic would have put the bloc’s viability in serious doubt after years of economic crisis and Britain’s recent departure.
European shares rallied to four-month highs on Tuesday and the euro touched a four-month high of $1.1470.
“This agreement sends a concrete signal that Europe is a force for action,” a jubilant Michel told reporters.
French President Emmanuel Macron, who spearheaded a push for the deal with German Chancellor Angela Merkel, hailed it as “truly historic”.
Leaders hope the 750 billion euro ($857.33 billion) recovery fund and its related 1.1 trillion euro 2021-2027 budget will help repair the continent’s deepest recession since World War Two after the coronavirus outbreak shut down economies.
Germany Economy Minister Peter Altmaier said that, with the agreement, the chances of “a cautious, slow recovery” in the second half of this year had increased enormously.
While strong in symbolism, the deal came at the cost of cuts to proposed investment in climate-friendly funds and did not set conditions for disbursements to countries, such as Hungary and Poland, seen as breaching democratic values.