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EU Leaders Meet To Discuss Economic Impact Of COVID-19

STEVE INSKEEP, HOST:

Germany's chancellor, Angela Merkel, has so far steered her country through the pandemic. Germany's infection rates are far lower, for example, than the United States. Now can she work out an agreement to fix Europe's economy? Today, EU leaders will meet in Brussels, but they're still divided over what to do. NPR's Esme Nicholson reports from Berlin.

ESME NICHOLSON, BYLINE: Speaking to EU lawmakers ahead of this week's summit, Angela Merkel didn't mince her words about what's at stake.

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CHANCELLOR ANGELA MERKEL: (Through interpreter) We're all plainly aware that the European Union is facing its toughest challenge yet.

NICHOLSON: While Merkel's words are less than reassuring, her leadership is. After 15 years in office, Merkel is a seasoned crisis manager whose scientific training lends her a sober, methodical approach to problem solving. But the crisis has prompted Germany's ever-cautious chancellor to take bold steps when it comes to fighting its economic impact.

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MERKEL: (Through interpreter) European solidarity isn't simply a humane gesture. It entails sustainable investment.

NICHOLSON: To the surprise of many, Merkel has abandoned Germany's policy of balancing the books and is on a spending spree both domestically and in Europe. Together with French President Emmanuel Macron, Merkel advocates funding half a trillion euros in grants that would go to the same southern European countries Germany forced into austerity during the eurozone crisis. So what heralded Merkel's fiscal U-turn? Many say it's down to a new generation of economic advisers, Marcel Fratzscher at the German Institute for Economic Research.

MARCEL FRATZSCHER: I think there is an awakening in Germany to realize, yes, we want to protect our prosperity, but we can only do so if Europe is equally successful economically as Germany is.

NICHOLSON: But Fratzcher says it's not just about self-interest. A bigger geopolitical picture is at play.

FRATZSCHER: We are living in an increasingly polarized world with increasingly self-confident China and increasingly nationalistic United States with an "America First" policy. And Europe must unite. If Europe doesn't manage now to at least build up a recovery fund where countries help one another and help convergence - if that fails, the future for Europe is pretty bleak.

NICHOLSON: During the summit, Merkel has to convince countries opposed to issuing grants instead of loans to sign off on the proposal. And even then, the recovery fund still has to be ratified by every single one of the EU's 27 member state parliaments. Merkel has public support at home. Polls say 70% of the electorate is currently in favor of the Franco-German plan. Cornelius Adebahr of the think tank Carnegie Europe says Merkel's sudden fervor for spending is due to both her sky-high popularity and the fact that she's not running for reelection.

CORNELIUS ADEBAHR: With her approval rating, with the difficulty that her party has in finding a successor, there really is this feeling that there is no one who could rival her domestically. So this gives her an aura for these upcoming six months.

NICHOLSON: Merkel is not without opposition. Franziska Brantner of Germany's influential green party says the chancellor lacks long-term vision about how the recovery fund should be spent.

FRANZISKA BRANTNER: I don't think that the current government is in favor of really strong climate protection. So I think all those who have high expectations on the long term will be disappointed.

NICHOLSON: But at this juncture in her career, Merkel's support for European unity might be enough to secure her own long-term political legacy, as long as she saves Europe in the short term. For NPR News, I'm Esme Nicholson in Berlin. Transcript provided by NPR, Copyright NPR.