French President Emmanuel Macron is seen before a cabinet meeting on the COVID-19 in Paris, France, on Feb. 29, 2020. (Photo by Aurelien Morissard/Xinhua)

The proposal is seen as unprecedented since it overcomes objections from Germany and several other rich EU countries to the concept of collective borrowing.

PARIS/BERLIN, May 18  -- France and Germany on Monday jointly proposed that the European Commission borrow money on capital markets in the European Union's (EU) name and create a 500-billion-euro (546 billion U.S. dollars) recovery fund to help the coronavirus-battered European economies and regions.

Describing the proposal as "a major step forward," French President Emmanuel Macron told a joint video press conference with German Chancellor Angela Merkel that it was the first time France and Germany agreed to let the EU raise debt jointly.

The proposal is seen as unprecedented since it overcomes objections from Germany and several other rich EU countries to the concept of collective borrowing.

Merkel said the unusual nature of the COVID-19 crisis made the two countries choose an unusual way. "The goal is for Europe to emerge from this crisis stronger, more cohesive and in solidarity," she said.