Skip to main content

Advertisement

Advertisement

World

EU chief urges compromise on COVID-19 rescue package

EU chief urges compromise on COVID-19 rescue package

President of the European Council Charles Michel arrives for a meeting of an EU summit on a coronavirus recovery package at the European Council building in Brussels on Jul 19, 2020. (Photo: John Thys/Pool/AFP)

BRUSSELS: Squabbling EU leaders battled on into the early hours of Monday (Jul 20) to try and break the deadlock as their summit on a huge coronavirus rescue package stretched into a fourth day.

Tempers flared in the conference room as frustration boiled over after a full weekend of haggling, with French President Emmanuel Macron upbraiding the Dutch and Austrian leaders and threatening a walkout.

The marathon talks chaired by EU Council President Charles Michel have failed to yield agreement over the size and rules for a 750 billion euro (US$860 billion) package of loans and grants to help drag Europe out of a recession caused by the pandemic.

Over a working dinner with the 27 leaders on Sunday, Michel made a fresh effort to win over the coalition of "Frugals" - the Netherlands, Sweden, Austria, Denmark and Finland - which has sought to cut the size of the package and impose strict rules on how it is used.

The Frugals, led by Dutch Prime Minister Mark Rutte, have sought to slash the scale of the package of loans and grants that Brussels wants to help the countries hit hard by the epidemic.

As fears rose that the summit would collapse without agreement, Michel suggested cutting the grant portion of the deal to €400 billion - down from his initial proposal of 500 billion - and raising the loan part to 350 billion, up from 250 billion.

READ: EU struggles to agree on COVID-19 recovery deal as global deaths surge

In a heartfelt speech over dinner, Michel reminded leaders of the devastating human cost of the pandemic - 600,000 dead including 200,000 in Europe - and urged them to come together to complete a "mission impossible".

"The question is this: are the 27 leaders, responsible for the people of Europe, capable of building European unity and trust?" Michel said, according to a copy of his remarks seen by AFP.

"Or will we present the face of a weak Europe, undermined by mistrust?"

DOGGED FRUGALS

But a senior aide to Swedish Prime Minister Stefan Lofven said they were only prepared to accept a maximum of €350 billion as grants in the package, and even this was subject to conditions.

"It's about the rebates, higher climate ambitions, and that we include a mechanism that makes so that countries will not be able to get money from the EU budget or this recovery package if they do not follow the principles of rule of law," Paula Carvalho Olovsson told the TT news agency.

At the start of what she said was probably the "decisive" third day of the extraordinary summit, German Chancellor Angela Merkel had said there were still many divisions among the leaders, and so it proved.

The leaders sat down to their dinner around 7.20pm, more than seven hours after they had been scheduled to restart their full round-table meeting of all 27.

Round after round of small group meetings went on all day as Michel, aided by Merkel and French President Emmanuel Macron, tried to drag the frugals and the more indebted - and virus-ravaged - on board for a compromise, but progress was painfully slow.

A European source said there were fresh clashes over the dinner table, as the frugals demanded massive hikes in the rebates they get on their EU contributions.

Macron, who along with Michel and German Chancellor Angela Merkel, has worked to find a compromise deal, could not contain his impatience as the Frugals stuck to their guns over dinner.

According to witnesses the French leader banged the table, attacked Austrian Chancellor Sebastian Kurz for leaving the room to make a phone call and accused Rutte of behaving like former British premier David Cameron - who took a hard line at EU summits but ended up leading his country into a referendum to quit the bloc.

Officials said Macron denounced the two leaders for insisting recovery funds take the form of loans with strict conditions attached, rather than grants - and had said he would rather walk away than make a bad deal.

RULE OF LAW ROW

Meanwhile, another stumbling block emerged when Hungary's hardline premier Viktor Orban accused Rutte of waging a personal vendetta against him and his country - and vowed to prevent any agreement on efforts to tie EU spending to recipient countries' respect for EU standards.

The so-called "Rule of Law" measure - also opposed by Poland and Slovenia - could see Orban's nationalist and increasingly authoritarian government lose out if fellow members judge his alleged assault on the free media and democratic norms breaks with European values.

Both issues could thwart attempts to reach agreement at the summit, and that is even before the leaders - who began meeting on Friday and have finished after midnight for two nights running - get on to debating the draft of the seven-year, trillion-euro EU budget.

Macron urged leaders to "take responsibility" as Europe grapples with a severe recession caused by the virus and its lockdowns, saying a deal could still be found, "but these compromises cannot be made at the cost of European ambition".

VETO DEMAND

A European source said the Frugals used the dinner to demand massive hikes in the rebates they get on their EU contributions, piling up fresh tensions.

At the start of what she said was probably the "decisive" third day of the extraordinary summit on Sunday, German Chancellor Angela Merkel had said there were still many divisions among the leaders, and so it proved.

Round after round of small group meetings went on all day as Michel, aided by Merkel and Macron, tried to drag the Frugals and the more indebted - and virus-ravaged - on board for a compromise, but progress was painfully slow.

Rutte also wants member states to retain the right to veto national economic plans by the likes of Italy and Spain, in order to oblige them to pursue reforms to borrowing and their labour and pensions markets - an effort that was angrily resisted by his Italian counterpart, Giuseppe Conte.

Meanwhile, another stumbling block emerged when Hungary's hardline premier Viktor Orban accused Rutte of waging a personal vendetta against him and his country - and vowed to prevent any agreement on efforts to tie EU spending to recipient countries' respect for EU standards.

BOOKMARK THIS: Our comprehensive coverage of the coronavirus outbreak and its developments

Download our app or subscribe to our Telegram channel for the latest updates on the coronavirus outbreak: https://cna.asia/telegram

Source: AFP/ec

Advertisement

Also worth reading

Advertisement