EU proposes $825 billion virus recovery fund

BRUSSELS — The European Union proposed a $825 billion recovery fund to help countries weather a painful recession triggered by the coronavirus and sought Wednesday to bridge divisions over the conditions that should be attached for access to the money.

The 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. “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.

“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-dollar package and trillions in dollars of aid from individual EU countries, is part of a slew of programs that countries around the world are deploying to blunt the recession. The U.S. government has put up over $2 trillion in support for companies and workers. Japan on Wednesday approved a supplementary budget that brings its fiscal support to more than $2.1 trillion.