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As countries ease lockdowns and try to move toward normality, we take stock of Europe’s response to the coronavirus so far. We pick out key themes and moments, offer a behind-the-scenes peek at our coverage and look at the challenges to come.

POLITICO’s Andrew Gray reviews the past few months and senior health care reporter Sarah Wheaton adds her insights in the last of our special coronavirus episodes — at least for now. Be sure to continue listening to our regular Thursday editions of EU Confidential, which will also focus largely on the coronavirus crisis in the weeks and months to come.

The European Commission should come up with an ambitious proposal for a coronavirus recovery fund and not simply act as a mediator between the two rival camps of member countries, according to Italy’s EU affairs minister.

“Now it’s [the] time of the Commission and the Commission should take care of their own proposal,” Enzo Amendola told POLITICO in a telephone interview. “What we are expecting is an ambitious plan,” he said, and for the Commission to “lead this recovery plan.”

“I don’t think that the proposal should be a mediation between the French-German and the frugal one,” he added. On the contrary, it “should be the Commission proposal, according to what they want to achieve.”

The EU’s response to the pandemic has resulted in a split over whether the best way to help is by using grants or loans.

Last week, Berlin and Paris agreed on a blueprint for a €500 billion recovery fund to help the countries hardest hit by the pandemic get back on their feet, a proposal that would allow the Commission to borrow cash on financial markets and then distribute it in the form of grants. But the EU’s so-called frugal four — Austria, Denmark, the Netherlands and Sweden — reacted by pushing their own “loans for loans” solution.

What is important for Rome “is not to have, as the frugals proposed, just loans, but to have a majority of the amount of resources with grants, as the French-German proposal put on the paper,” said Amendola, who is a member of the center-left Democratic Party, which is in a governing coalition with the 5Star Movement.

“We are not against the loans, but as [the President of the Bundestag Wolfgang] Schäuble said, loans at this moment … are stones in the European Union economy,” because they would aggravate the situation for already heavily indebted countries, Amendola said, quoting a recent interview with Schäuble, a former finance minister who is one Germany’s most prominent fiscal hawks.

Former Italian Prime Minister Enrico Letta said in an interview that he prefers to use the French word radin (stingy) to describe the frugal four. Amendola refused to use the same word, but he criticized them for looking back rather than forward. The “object of the recovery fund is to fight the recession and to work on the capability of the European Union to be competitive in the future,” he argued. For this reason, “I felt the frugal document to be defensive, just focused on the revenue of the MFF,” the EU’s long-term budget, and not focused on realities since COVID-19 “changed the landscape.”

To make the recovery plan attractive to the frugal countries, the Commission has reportedly floated the idea of linking the funds to the European Semester, a regular health check on the bloc’s national economies.

Critics have doubts that Italy, whose economy has barely grown since it joined the euro area in 1999, is able to push through the reforms it clearly needs.

But Amendola argued that Rome wants the recovery fund also because it provides an opportunity “for everybody to make reforms” and stressed that “our government will present, in the next week, a big deal in order to change the administration of our country, and also to improve the digitalization of the public administration, in line with the European Commission agenda, and also the Green Deal.”

He said this was not “an adventure, but it’s the reality of what we are doing in our country.”

BERLIN — Good evening ladies and gentlemen, this is your captain speaking … the German federal government.

Berlin agreed to a €9 billion deal on Monday to save flag carrier Lufthansa, turning the German government into the single largest shareholder in Europe’s second-largest airline as it looks to restart flights next month following weeks of lockdown.

Underscoring the trouble facing airlines, Lufthansa’s current market capitalization is less than the size of the bailout. But as a strategic asset for an export nation, keeping its flag carrier flying is a no-brainer in Berlin with broad political support, despite some concerns from the opposition Greens and liberals.

That’s because a weakened Lufthansa would hurt Frankfurt’s position as a global aviation hub that has developed its intercontinental links over decades. It would also hand important destinations in North America and China for exporting high-value German-made goods, and the executives that run the companies that make them, to rival carriers.

The talks over the bailout, which includes a three-year €3 billion loan, were no secret, but the result is the largest airline rescue package and the biggest backstop yet from Germany’s massive Economic Stabilization Fund launched to keep the country’s economy from collapsing under the stress of the pandemic.

Turbulence could come if Lufthansa is asked to give up some of its airport slots and routes by the watchdog in Brussels.

It’s also the largest airline rescue in Europe; Air France got a €7 billion loan from the French government while Alitalia has been renationalized for €3 billion.

The cash injection gets Berlin a 20 percent stake in Lufthansa and the option to boost that by an additional 5 percent — enough to allow the government to block any unwanted takeovers. Two supervisory board seats are included, and the deal also includes restrictions on management pay and not paying a dividend to shareholders.

“When the company is afloat again, the state will sell its shares,” Finance Minister Olaf Scholz said Monday, adding he hoped to do so with a small profit.

The deal still needs approval from the European Commission’s competition authorities, and Lufthansa’s own shareholders. Turbulence could come if Lufthansa is asked to give up some of its airport slots and routes by the watchdog in Brussels.

“The aid package for Lufthansa … must not be endangered by Brussels overregulation,” said Ulrich Lange, an MP for the ruling Christian Social Union, the Bavarian sister party to the Christian Democratic Union. “The Frankfurt and Munich hubs must not be weakened in comparison with Paris and Amsterdam.”

Boarding soon

Lufthansa has been badly wounded by the coronavirus. Management said last month it is losing around €1 million an hour, and is carrying only about 1 percent of its normal passenger load.

Lufthansa Group, which also includes brands such as Austrian, Swiss, Brussels Airlines and Eurowings, was forced to ground almost all of its fleet and close its Germanwings subsidiary. The bailout puts wind behind Lufthansa’s plan to get flights going again to popular tourist hotspots such as Mallorca and Venice from next month.

The government has promised to appoint “independent experts” to its two board seats, which rules out politicians. In Germany’s multitiered corporate governance structure, which mandates worker representation on supervisory boards, keeping politicians out of the boardroom is important for executives who may need to make tough choices.

“Just because you get bailed out it doesn’t mean you won’t need to fire people,” said an industry official working in the German aviation industry, something that might be more difficult if politicians are on the board.

As with other airline rescues, the emphasis is on keeping the company going, and less on environmental goals like cutting emissions. The deal involves only a cursory reference to Lufthansa agreeing to continue with its “sustainability goals” but stops short of mandating a greener way forward.

Ryanair boss Michael O’Leary has likened Lufthansa and other flag carriers to drunks at a wedding.

“Retiring old aircraft is an easy win,” said Andrew Charlton, managing director of consultancy Aviation Advocacy. “Transferring traffic from short-haul sectors to rail has also been mooted. That will free up slots for long-haul flights, which of course, emit more emissions, but which are generally more profitable.”

The airline bailouts have attracted sharp criticism from the bosses of Europe’s low-cost airlines such as Ryanair, the Continent’s largest carrier, and Budapest-based Wizz Air.

Ryanair boss Michael O’Leary has likened Lufthansa and other flag carriers to drunks at a wedding. “They’re just hoovering up state aid to give them unlimited firepower to distort the competition market once we’re all back flying again,” he told POLITICO.

“All these airlines have been poorly managed and poorly run and now they can turn to their governments to get bailed out and it is certainly distorting the market,” József Váradi, Wizz Air’s CEO, told POLITICO before the Lufthansa deal was agreed.

Matthew Karnitschnig contributed reporting.

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