Germany, France reach deal on bailout


Well let's talk about Europe or countries feats are tied together in ways and that the U. S. doesn't have to think about so German chancellor Angela Merkel and French president Emmanuel macron reached a deal on a relief package but it was a long time coming it didn't happen quickly No Way Out took awhile because European leaders have disagreed on how to fund this relief plan up to now Europe southern states have wanted to be funded by the entire E. U. S. sort of collective approach where member states would share the debt but a handful of countries known in some circles as the frugal five Austria Germany the Netherlands Denmark and Sweden they wanted a more individual push that each member state would take out a loan for its own needs now the proposal that the krona Mericle agreed on this week shows the southern states got their way under this plan the E. you would borrow half a trillion dollars and share the data month all member states even though the aid would primarily benefit southern states like Italy and Spain it's important member here that this package is only a proposal and all twenty seven EU members including their national parliaments will need to approve it so this is far from a done deal but the fact that angle Americal has agreed to the shows an interesting change of heart for her what's behind that why did she agree to this big relief package of it's not going to benefit Germany that much yeah one reason is this pandemic was not the fault of Italy or Spain it's a natural disaster and unlike the eurozone crisis a decade ago this is not rooted in the fiscal policies of southern U. member states secondly angle Americal is at the end of her tenure as chancellor and her management of this crisis has restored her popularity her approval ratings are skyrocketing in Germany so she now has the political capital to solidify her legacy by supporting a recovery package that aims to unify the easier not further separated what an interesting trajectory for her Scott we don't exactly know when recovery will happen everyone kind of admits that at this point do we know what it will look like you know what with the sign to be you know it depends on the path of the virus and also on public attitudes how quickly do people feel comfortable going back to the shopping mall how quickly they feel comfortable going to restaurants or getting on an airplane again there are some small signs of improvement if you squint hard to look at him but on the other hand there are also huge holes in state and local government budgets which could trigger another round of layoffs and of course all bets are off if we see another spike in infections okay so a lot we don't know here in the U. S. rob in Germany the country starting to slowly be open is the picture a little brighter where you are yeah a little you know Germany just announced it's officially in recession and its economy has shrunk by more than two percent the first quarter of this year but you know thanks to German Germany's government and its tradition of keeping a balanced budget the country is better positioned than others you know Germany ended last year with the surplus and spending that in more on an eight hundred billion dollar relief package Germany's been able to keep workers employed thanks to its Kurds are by program instead of the US approach of unemployment checks in Germany companies are subsidized to keep workers on the payroll so workers won't lose their jobs and companies don't have to retire after the crisis nearly a million German companies have applied for this program and much of the country's recovery package is going to radically into that to keep germs employed but the question going forward is how long can Germany for to pay into these programs before the money starts to dry up be interesting to see what each country learns from others when this is all over and here's rob Schmitz in Berlin and Scott Horsley in DC thanks you guys

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