Merkel and Macron warned EU fund ‘not going to fix’ eurozone imminent collapse

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Daniel Stelter, Founder of the discussion group Think Beyond The Obvious, explained divergence between the EU27 means that the economic recovery fund will not fix the issues the European Union had before the coronavirus pandemic. The rescue and recovery plan is bolted onto a revised seven-year budget proposal, the EU’s Multiannual Financial Framework (MFF) which totals €1.1 trillion for the years 2021 to 2027. The proposal relies on borrowing from the financial markets.

Speaking to France 24, Mr Stelter said: “€750 billion is not going to fix the problem and it’s not addressing the real causes.

“Yes, we had coronavirus, it was a human tragedy and an economic crisis for Europe but mainly a human tragedy for Italy.

“On the other hand, we have to accept the high death levels of Italy, Spain, Portugal and France had issues before coronavirus.

“In addition, we had divergent competitiveness, the eurozone economics have not converged.

“We have two problems and by just installing transfers from Germany to other countries, we are not going to address this issue.”

Director of European Alternatives, Lorenzo Marsili, added: “You could say better late than never.

“We have been through over a decade of European crisis through which European leaders have been utterly unable to respond in any way that strikes as ambitious, visionary, imaginary or even effective.

“The Franco-German axis occasionally, once in a decade, manages to do just about what it takes not to let the Eurozone collapse.”

It comes as negotiators from the UK and European Union have met face to face in an effort to make progress on a post-Brexit trade deal.

Teams led by the Prime Minister’s Europe adviser, David Frost, and the EU’s Michel Barnier held talks in Brussels for the first time since the coronavirus crisis forced them to be held remotely.

Mr Barnier said they would “make the most” of the intensified process over the coming weeks and months.

He said the EU remains “calm and united in its principles and values”.

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Key stumbling blocks in the talks include the “level playing field”, aimed at preventing the UK lowering standards on workers’ rights, environmental protection and state subsidies.

The UK side has claimed the proposed measures would leave it tied to Brussels’ rules despite leaving the EU.

The meeting – held with participants spaced around the conference table due to social distancing measure – came a day after it was announced that Mr Frost would replace Sir Mark Sedwill as national security adviser alongside his responsibilities on Europe.

Downing Street indicated that it wanted a post-Brexit deal largely concluded by the time he takes up the new role at the end of August.

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