In an interview with German weekly Welt am Sonntag, Eurogroup head Mario Centeno said that the Franco-German proposal of EUR 500B recovery fund could be a “critical part” in the “larger and coordinated” coronavirus response”. It would “allow us to protest the single market in the recovery phase”. He added that “the German-Franco proposal would be a great step towards a fiscal union and a properly functioning currency union, even if the recovery fund is only temporary.”
He admitted that “we will all come out of this crisis with higher debts”. Hence, it’s important for the Eurogroup to agree on a recovery fund that “spread the costs of the crisis over time”. The France-German initiative was also “one step forward in addressing the debt overload issue by proposing common debt issuance.”
On the economy, Centeno said the forecasts so far do not take into account the EUR 500B reconstruction funds and the frontloaded EU budget. He added, “this enormous stimulus will strongly accelerate economic recovery”. “By the end of 2022, most – if not all – EU countries will return to 2019 GDP levels”.