European Union leaders reached a landmark agreement on a massive €750 billion (Dh3.2 trillion) stimulus package to help its member states cushion the blow of the coronavirus pandemic.
The agreement, reached in the early hours of Tuesday morning, comes after a difficult four-day summit in Brussels that required the unanimous approval of all 27 member states.
"We did it! Europe is strong, Europe is united," Charles Michel, president of the European Council said on Tuesday.
"This is a good deal, this is a strong deal and most importantly, this is the right deal for Europe right now."
The deal marks a win for French President Emmanuel Macron and German Chancellor Angela Merkel, who drafted an early outline for the proposal in May.
"This is an important signal beyond Europe’s borders that the EU, even with all the varying backgrounds [of member states], is able to take action,” Ms Merkel said on Tuesday during a joint news conference with Mr Macron.
The French president tweeted that it was a "historic day for Europe!" after the agreement.
The agreement came after days of difficult negotiations between the EU leaders. Talks neared collapse at several points during the summit, as national interests clashed and a split emerged between fiscally frugal northern states and their southern counterparts.
"Europe as a whole has now a big chance to come out stronger from the crisis," Ursula von der Leyen, president of the European Commission, said.
"Today we have taken a historic step we can all be proud of. But another important step remains ahead of us: first and foremost, we now have to work with the European parliament to secure agreement. We have a lot of work ahead of us but tonight is a big step forward towards recovery."
The recovery plan will need to be ratified by all member states, which will mean a further delay in the disbursement of the funds.
EU states agreed to borrow and spend hundreds of billions of euros in the next few years and pay them back from new taxes.
The emergency fund will provide €390bn of grants and €360bn of low-interest loans.
Globally, the number of Covid-19 cases has exceeded 14.7 million while the death toll stands at more than 600,000, according to the Johns Hopkins University's coronavirus tracker. About 8.2 million people have recovered.
The deadly virus has devastated economies, paralysed air travel, hindered global trade and changed the norms of daily life.
Italy, which was hit hardest by the coronavirus outbreak early on, is expected to be the biggest beneficiary of the plan.
The country is expected to receive about €82bn in grants and about €127bn in loans, Bloomberg quoted Italian officials as saying.
European stocks also climbed after the deal was announced, with the Stoxx Europe 600 Index adding 1 per cent as of 11.10am UAE time.
"It’s a big deal for the bloc, which will see countries borrow together for the first time," said Jasper Lawler, head of research at London Capital Group.
"Now that the recovery fund is secured, one could make the argument there is a better chance an EU/UK trade deal can be secured now too, which is more sterling than euro-positive."