EU leaders have agreed to create a fund that could raise at least 1 trillion euros ($1.1 trillion) to rebuild regional economies ravaged by the coronavirus pandemic.
"This fund shall be of a sufficient magnitude, targeted towards the sectors and geographical parts of Europe most affected, and be dedicated to dealing with this unprecedented crisis," leaders of the 27 EU countries said in a statement after they met via video conference on Thursday.
The heads of the EU governments asked officials at the European Commission to come up with detailed proposals "urgently" that will include how the recovery fund will relate to the bloc's budget for 2021-2027, they added.
The EU is planning to expand its budget from about 1.2% of GDP to 2% of GDP and then use those additional funds as a guarantee to borrow at low rates from financial markets.
Asked by reporters how much could be raised, European Commission President Ursula von der Leyen said: "This has to be looked at thoroughly ... but we are not talking about billion[s], we are talking about trillion[s]."
The EU leaders also signed off on an immediate package of rescue measures worth at least €500 billion ($538 billion) drawn up earlier this month by finance ministers. That package includes up to €100 billion ($110 billion) in wage subsidies aimed at preventing mass layoffs, as well as hundreds of billions in loans to businesses and credit for EU governments.
"There are reasons for some optimism that, even if we don't get as joined-up a response as we'd like overall, the European fiscal response to this crisis may yet end up being sizeable," commented Societe Generale strategist Kit Juckes in a research note on Friday.