COVID-19

European leaders strike deal on COVID-19 recovery fund

Sabri Ben-Achour, Victoria Craig, and Alex Schroeder Jul 21, 2020
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John Thys/Pool/AFP via Getty Images
COVID-19

European leaders strike deal on COVID-19 recovery fund

Sabri Ben-Achour, Victoria Craig, and Alex Schroeder Jul 21, 2020
Heard on:
John Thys/Pool/AFP via Getty Images
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After a marathon four days of at times acrimonious negotiation, European leaders in the early morning hours Tuesday reached a deal on an economic rescue package for EU nations battered by the pandemic.

The BBC’s Victoria Craig spoke with Marketplace’s Sabri Ben-Achour, and the following is an edited transcript of their conversation.

Sabri Ben-Achour: So what did these 27 leaders agree to?

Victoria Craig: Well, they’ve officially signed off on a plan to distribute $850 billion to member countries to help them recover from the impact of shutdowns, loss of tourism and loss of local spending during this coronavirus crisis. And they’ll raise this money through the first-ever collective bond issuance program. Usually the EU prefers member states to raise money individually.

Ben-Achour: One of the big sticking points was whether to loan money to struggling countries or just give those countries money. Why was that such a big deal?

Craig: Well, southern nations like Italy and Spain, which have been badly hit by the coronavirus pandemic, had advocated to get a bigger portion of the overall funding to be distributed through grants. That would have meant that they wouldn’t have to take on extra debt after they’ve already kind of slowly recovered from the eurozone debt crisis from several years ago. The so- called “frugal four” group of nations in the north — those are the Netherlands, Austria, Sweden and Denmark with support from Finland — they wanted more control in how the money is distributed. In the end, leaders agreed to allocate more money in grants than in loans, but the total amount of money that will be distributed in grants is more than $100 billion less than was originally floated back in May. So it was sort of a win-win situation for everyone.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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