EU, Japan roll out trillions in coronavirus recovery funds
Brussels: The European Union proposed a €750 billion ($1.2 trillion) recovery fund to help countries weather a painful recession triggered by the coronavirus and sought on Wednesday to bridge divisions over the conditions that should be attached for access to the money.
Ursula von der Leyen, president of the European Commission: the EU is challenged like never before.Credit:Bloomberg
The proposal came hours after Japan approved a supplementary budget bringing its fiscal support for the economy to over ¥230 trillion yen ($3.2 trillion).
The European fund, to be mostly made up of grants and tied to the common budget of EU's 27 member nations, comes as the world's biggest trading bloc enters its deepest- ever recession, weighed down by the impact of the virus pandemic.
Virtually every country has broken the EU's deficit limit while spending to keep health care systems, businesses and jobs alive.
"Our unique model built over 70 years is being challenged like never before in our history," European Commission President Ursula von der Leyen told EU lawmakers as she unveiled the plan.
"I will defend the Japanese economy at any cost against this once-in-a-century crisis," Shinzo Abe said.Credit:Getty
"This is Europe's moment. Our willingness to act must live up to the challenges we are all facing."
As Europe's residents slowly return to workplaces and classrooms, countries hit hardest by the pandemic such as Italy and Spain remain in desperate need of funds and want to avoid long-term wrangling.
Barely off the press, the EU's recovery proposal received mixed reviews, with Dutch officials notably cool on it.
Von der Leyen said the fund, which is dubbed Next Generation EU and must be endorsed by every country, is "providing an ambitious answer."
She urged European nations to set aside their divisions.
Police face a group of demonstrators protesting against the hard economic conditions in front of the Lombardy region headquarters, in Milan, Italy. Credit:AP
"We either all go alone, leaving countries, regions and people behind, and accepting a Union of haves and have nots. Or we take that road together, we take that leap forward. For me, the choice is simple. I want us to take a new bold step together," von der Leyen said.
The European aid, which would come on top of another half-trillion package and trillions of aid from individual EU countries, is part of a slew of programs that countries around the world are deploying to blunt the recession.
Japan's Cabinet approved a proposed ¥32 trillion ($448 billion) supplementary budget Wednesday in measures to cushion the blow to the economy from the coronavirus pandemic.
The extra funding under consideration includes support for small businesses, funding for improved medical systems and subsidies for local governments. The budget also will pay for measures to help prepare for possible future waves of infections.
Japan's economy, the world's third largest, slipped into recession in the last quarter and was already slowing before the pandemic hit thanks to weakening global demand and consumer spending.
The combined stimulus enacted so far amounts to a total of more than 230 trillion yen ($3.2trillion), or about 40 per cent of Japan's economy, Prime Minister Shinzo Abe told a meeting of officials on Wednesday.
"I will defend the Japanese economy at any cost against this once-in-a-century crisis," Abe said.
A pandemic state of emergency still in effect for Tokyo and several other areas ended Tuesday as the government began trying to get back to business.
The government only imposed voluntary requests for people stay home, but the precautions hit consumer spending and other business activity. The virtual shutdown of tourism has also taken a huge toll, while the global economic fallout from the pandemic is hammering businesses everywhere.
Japanese are still being asked to take care to avoid spreading the coronavirus, which has infected more than 16,650 people in Japan and killed 858.
The finance minister, Taro Aso, said quick action was needed, noting that it would likely take a long time for things to get back to normal.
"Under such conditions, we need to firmly protect businesses that are continuing to operate, and employment, and to be fully prepared for any so-called 'second wave,"' he said.
AP