A recovery fund worth €750bn (£670bn; $825bn) has been proposed by the EU’s executive Commission to help the EU tackle an “unprecedented crisis”.
The package will be made up of grants and loans for every EU member state.
Economies across the 27-nation EU bloc have been ravaged by the Covid-19 pandemic, but several southern states had big debts even before the crisis.
Commission President Ursula von der Leyen said “this is Europe’s moment”.
“Things we take for granted are being questioned. None of that can be fixed by any single country alone,” she told the European Parliament. “This is about all of us and it is way bigger than any of us.”
The Commission has dubbed the plan Next Generation EU. Without the backing of all 27 EU member states, it cannot go ahead. But Germany and France have backed plans for the money to be raised on the capital markets.
Economy Commissioner Paolo Gentiloni said the fund was a “European turning point” that would be added to instruments that had already been launched.
Spain and Italy have seen the highest number of deaths in the EU during the coronavirus crisis and, in the wake of the financial crisis, are particularly keen on grants rather than loans being added to their public debt.
Several “frugal” states object to taking on debt for other countries. Austria, the Netherlands, Denmark and Sweden reject the idea of cash handouts to relatively poorer countries.