EU leaders have struck a deal on a landmark coronavirus recovery package that will involve the European Commission undertaking massive borrowing on the capital markets for the first time.

After days of sometimes bitter debate, the bloc’s heads of government agreed on a €750bn package aimed at funding post-pandemic relief efforts across the EU. The deal was announced in a tweet from Charles Michel, the European Council president at 05.31am (CET) on Tuesday and was hailed by Emmanuel Macron, the French president, as a “historic day for Europe”.

The recovery fund centres on a €390bn programme of grants to economically weakened member states — a significantly smaller sum than the €500bn package originally proposed by Berlin and Paris in May. Leaders also signed off on the EU’s next seven-year budget, which will be worth €1.074tn.

The deal, orchestrated by Angela Merkel, the German chancellor, and Mr Michel, is the fruit of marathon negotiations which began in Brussels on Friday morning. The summit was the second longest in the bloc’s history, falling just shy of the record set at a meeting in Nice in 2000.