Macron and Mitsotakis call for extending EU Covid debt repayment, more investment financing
French and Greek leaders, heading Europe's most indebted countries, push for debt rollover and new EU bonds at tense budget negotiations
Quick Look
- French President Emmanuel Macron and Greek Prime Minister Kyriakos Mitsotakis on Saturday called for extending the repayment of the EU's post-pandemic Recovery Fund and issuing new EU debt to finance investment in defense, space and AI.
- The leaders of the EU's most and third most indebted countries argued against rapid repayment, with Macron calling such a stance "idiotic." They face opposition from frugal northern EU members, particularly Germany, ahead of tense negotiations on the €1.8 trillion budget for 2028-2034.
AI-generated summary
Why It Matters
The EU issued joint debt during the Covid-19 pandemic to fund the Recovery Fund, with repayment due to start in 2028 at €25 billion annually. France and Greece are the most and third most indebted EU countries respectively, making them natural advocates for extending repayment timelines.
ATHENS — French President Emmanuel Macron and Greek Prime Minister Kyriakos Mitsotakis on Saturday both called for spreading out the repayment of the EU's post-pandemic recovery plan and for more EU debt to finance the bloc's investment priorities. "We got indebted during Covid. Today some tell us that we need to reimburse fast. It is idiotic," Macron said during a press conference at the Maximos mansion in Athens alongside Mitsotakis. "Let's extend that debt or let's have some new debt issuance," he said. Macron also renewed his call for the use of more EU debt to finance investment in key sectors like defense, space and artificial intelligence. The Greek prime minister was on the same page. “What sense does it make right now to go and repay the Recovery Fund, thereby eating into the budget for the next six years, when we have no reason to do so and when there is strong demand for European bonds that will also make us stronger as a European Union?” said Mitsotakis. Mistotakis and Macron, who lead respectively the most-indebted and third most-indebted countries in the EU, are expected to defend their position in tense negotiations around the EU's €1.8 trillion multi-annual budget for 2028-2034. The option of rolling over the Recovery Fund debt was mentioned by several EU leaders on Friday during an informal meeting in Cyprus as the EU is due to start repaying €25 billion a year from 2028 on the joint debt it issued to tackle the economic fallout from the Covid pandemic. But frugal countries have pushed back strongly. “This is not going to happen,” one EU diplomat said on the sidelines of the Council meeting. German Chancellor Friedrich Merz on Friday also spoke against more EU debt. "Today, many will tell you 'no way'," Macron said. "But I am sure that in the end we will get there because Europe wants to be in the race." Earlier Saturday, France and Greece strengthened their bilateral ties by signing nine deals, including an overarching defense pact that includes a mutual defense clause and partnerships spanning from defense to nuclear technology and education. Also Saturday, French defense giant MBDA signed a contract to renew the Mica missiles of the Greek army.
What to Watch
AI outlook — possibilities, not facts
EU budget negotiations for 2028-2034 will become increasingly tense over debt repayment terms
Very likely · Within months
France-Greece defense cooperation will deepen with additional agreements
Likely · Within months
Open Questions
- Will frugal countries妥协 on their opposition?
- What specific investment sectors will receive new EU debt funding?
- How will the €1.8 trillion budget negotiations unfold?
