The EU's 500 billion euro coronavirus bailout plan could be a big step towards a federal Europe

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• France and Germany have proposed a massive EU rescue plan worth 500 billion euros to fund the bloc's recovery from the Covid-19 pandemic. 
• The plan would represent a huge outright transfer of money from richer countries in northern Europe to poorer ones, and the funds would not need to be repaid. 
• It could reshape the future of Europe, representing a centralisation of Brussels power which some member states have long been pushing for, and which others remain deeply sceptical of.
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Standing alone, with Emmanuel Macron beamed in beside her on television, Angela Merkel held a press conference in May at which the pair made a proposal so radical it could determine the fate of the European Union.

The Franco-German proposal was a 500 billion euro ($555 billion) coronavirus rescue fund, raised from the financial markets and guaranteed by the EU budget, to fund the bloc's recovery from the COVID-19 pandemic. Countries worst-affected by the crisis would receive billions of euros in direct cash transfers. There would be few strings attached. It would not need to be repaid. A further 250 billion euros would be made available in the form loans, the EU Commission has since suggested.

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