'It's up to us': how Merkel and Macron revived EU solidarity

It took a courtroom of scarlet-robed judges to spur Angela Merkel to make one of her boldest moves in 15 years as German chancellor: propose huge cash handouts to the European Union’s weaker economies.

Merkel was already worried about the future of the Union after the coronavirus pandemic struck Europe in February, triggering a wave of deaths and crippling lockdowns.

But it was Germany’s own Constitutional Court that tipped her hand, sources said. Its bombshell ruling on May 5 challenged the EU’s reliance on European Central Bank (ECB) money-printing to keep its weaker members’ economies afloat - and the EU’s governance.

Until then, Merkel had opposed a proposal by French President Emmanuel Macron for a Recovery Fund that would, for the first time, bind all 27 member states to raise debt jointly.

“Initially they were on quite different positions,” said one senior diplomat. “They reviewed the risk of a split in the EU. But then the Constitutional Court decision came and Merkel ... said: ‘It’s up to us, the governments’.”

A series of video calls between Merkel and Macron led to a plan for the European Commission, the EU executive, to borrow 500 billion euros ($550 billion) as common debt and transfer it to the regions and industries hit hardest.