“We need to reach an agreement over the summer, I absolutely cannot imagine any other option,” said Merkel, whose country has just taken over the rotating EU presidency for six months.
The leaders of the 27 EU member states will meet in Brussels on July 17th, their first physical summit since the coronavirus lockdown began, to discuss the plan.
A group of countries, a so-called “Frugal Four”, are trying to rein in spending, which is earmarked mainly for the poorer countries of southern Europe hardest hit by the COVID-19 epidemic.
The Netherlands, Austria, Denmark and Sweden insist that loans with tough conditions attached, rather than grants, should be the prefered method of rescue and are not in a rush to make a deal.
Other countries argue that the commission's plan misallocates the money, giving too much to eastern Europeans who were never on the front lines of the pandemic.
“Every day counts” and “to succeed in this gigantic task, each member state must look beyond its own small interests”, EU commission chief Ursula von der Leyen said at a press conference with the German leader by video link.
'A big win'
Merkel has urged holdout nations to show unprecedented solidarity with hard-hit neighbours, warning that an uneven recovery could undermine the EU single market and end up harming stronger economies too.
But “member states' positions are still very far apart” on the matter, she admitted on Wednesday in a speech kicking off the EU-presidency.
If accepted, the rescue fund would be a milestone for EU unity.