legrain32_STEPHANIE LECOCQPOOLAFP via Getty Images_eu recovery fund Stephanie Lecocq/Pool/AFP via Getty Images

Europe Rescues Itself

Once again, the European Union has shown that it is capable of rising to the occasion and coming to the assistance of Europeans in a time of need. A groundbreaking agreement for a new EU-financed recovery fund may not satisfy all of Europe's needs; but it is precisely what the bloc needs now.

LONDON – After four days and nights of tough negotiations and many painful compromises, European leaders have reached a deal on a groundbreaking €750 billion ($868 billion) recovery fund. As a gesture of solidarity toward Italy, Spain, and other countries still reeling from the COVID-19 crisis, the agreement is a major step forward for the European Union. Even so, it does little to address the eurozone’s deepest problems.

The COVID-19 crisis has strained the monetary union to breaking point. While the pain has been widely shared, some countries have been hit harder than others. Italy, France, and Spain have suffered the most deaths and the deepest recessions, and tourist-reliant southern Europe seems headed for an especially slow recovery.

Worse, while government debt is soaring across the eurozone, it is reaching perilously high levels in many southern countries, particularly Italy. The initial response to the pandemic left Italians feeling aggrieved, owing to the perception (not unjustified) that northern Europeans had been quicker to blame them for their plight than to offer assistance. Even the pro-European Italian mainstream – from President Sergio Mattarella on down – felt politically alienated from the EU at the height of the crisis.

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