April 24 (UPI) -- European leaders have agreed to a $582 billion economic rescue package but failed to reach a consensus on how to finance a longer-term post-coronavirus recovery plan.
The European Council agreed to the short-term package on Thursday at its fourth teleconference meeting since the start of the pandemic.
"We endorsed the agreement on three important safety nets for workers, businesses and sovereigns, amounting to a package worth [$582 billion]," European Council President Charles Michel told reporters. "We called for the package to be operational by June 1."
The money, from the European Stability Mechanism emergency fund, includes expanded credit lines, increased lending capacity for the European Investment Bank and a new $108 billion unemployment insurance program.
Leaders, however, again failed to find a consensus on a broader plan to rescue the bloc's most affected economies, especially those of Spain and Italy. Those countries want the effort financed by common EU debt -- a plan strongly rejected by northern EU nations such as Germany and the Netherlands. The disagreement raises concerns about long-term damage to the bloc's solidarity.
While they reached no decision there, the leaders generally endorsed a broad concept introduced by Spain and backed by EC President Ursula von der Leyen to finance a potential package through the coalition's regular seven-year budget, in essence turning the document into a coronavirus recovery tool.
"I am convinced that there is only one instrument that can deliver this magnitude of tasks behind the recovery and that is the European budget, clearly linked to the Recovery Fund," Von der Leyen said. "The budget is time-tested, everybody knows it, it is trusted by all member states, and it is per se designed for investment, for cohesion and convergence."
It's now up to the commission, the EU's executive body, to develop proposals on whether budgetary aid will be available in form of grants, loans or a combination, and determine how it should be distributed. Their recommendations require approval from all 27 member states.