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EU bailout package 'would be a game-changer' for Europe, analyst says

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Guntram Wolff -- Director of the European think tank, Bruegel
Guntram Wolff -- Director of the European think tank, Bruegel   -   Copyright  Euronews
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A one trillion euro bailout package for the European Union to help cope with the fallout from the coronavirus pandemic would be a game-changer for the bloc, an analyst told Euronews.

Guntram Wolff, director of the European think tank, Bruegel, said that the financial package currently being debated in Brussels would be "a completely new ball game".

"[It would show] that the EU actually does borrow money and then passes on that kind of money to those most in need through grants," he said.

Watch live: EU Commission announces 1.85 trillion euro recovery fund

"If this is agreed, it would be a huge step forward to a stronger eurozone."

Ursula von der Leyen, President of the European Commission, announced a 750-billion Euro bailout fund for the bloc at a presser on Wednesday. She confirmed that 500 billion would be given as grants to help Europe's struggling economies recover from COVID-19. An additional 250 billion will be available in loans. It's all part of a 1.85 trillion euro package.

Speaking about the success of the bailout Wolff said a compromise is possible but agreements are extremely difficult to achieve. Even normal EU budgets always go down to the wire, Wolff said, and can be a fractious process.

The frugal four - Austria, Denmark, the Netherlands and Sweden - know that a deal is needed, he said. Adding that they also know that their economies benefit from an integrated market and a strong trading bloc.

But he speculated that an agreement might not be stuck by mid-June, when EU leaders plan to meet. Wolff said that Germany, which has softened its previously hard-line position, has realised that the success of the union is at stake.