BRUSSELS (Reuters) – The Franco-German idea that the European Union should borrow to issue grants for its economic recovery is a historic step as it would be the first time that budget spending is financed through EU debt, French Finance Minister Bruno Le Maire said.

“This is a historic step for France and Germany and also a historic step for the whole European Union because it is the first time when France Germany stand together to have funding through debt for the spending of EU countries,” he said in a joint statement with his German counterpart.

France and Germany proposed on Monday a 500 billion euro fund, financed through European Commission borrowing on the market, to issue grants to EU regions and sectors worst hit by the coronavirus pandemic to help them recover.

(Reporting by Jan Strupczewski)