The summit of presidents and prime ministers of the European Union continued on Sunday for the third day with a difficult search for compromises on key controversial topics. The heads of state and government sought to move closer to the parameters of the economic recovery fund and the future seven-year budget of the bloc.
According to diplomats, the key dispute is over the ratio of grants and loans in the fund with a total volume of 750 billion euros (about 20 trillion crowns). The so-called green countries, such as the Netherlands, Austria, Denmark and Sweden, with the support of Finland, want the smallest possible share of direct subsidies and a lower total amount, while Italy and Spain want to keep grants as much as possible as the largest recipients of the package.
The joint meeting of all the leaders together has been postponed repeatedly since noon on Sunday, instead the President of the European Council Charles Michel met for more than seven hours separately with the leaders of the individual countries in an effort to persuade them to make concessions and prepare a compromise proposal. According to the Politico daily, Italy and the Netherlands also acted separately.
“You may be a hero in your country for a few days, but in a few weeks you will be held accountable to all European citizens for blocking an adequate and effective European response,” his Italian counterpart Giuseppe Conte told Dutch Prime Minister Mark Rutte.
The leaders continue a sharpened exchange of views even during the evening meetings of all countries. It started shortly before half past seven. The Netherlands and other thriving states before it came up with their “last offer”, wrote the Politico server and the DPA agency. They would be willing to agree to aid of EUR 700 billion, which would consist of half of loans and half of direct payments, ie grants. On Saturday, the head of the EU summits adjusted the ratio of grants and loans to 450 billion to 300 billion euros in favor of loans.
However, according to a diplomatic source Reuters, most other states are against such a proposal, including the two largest economies in Germany and France. They are working to approve the proposal as soon as possible in the light of the acute economic crisis.
German Chancellor Angela Merkel and French President Emmanuel Macron were so outraged by the reluctance of the austerity countries to compromise on Saturday that they left the talks prematurely. In addition, according to Reuters, the saving northern countries demand that their own contributions to the European budget be smaller in return.
Gentle “Mr. No”
The parliamentary elections planned for next year also play a role in the friendly position of the Netherlands, whose prime minister, diplomats from the southern countries renamed “Mr. Ne” according to Reuters. The Dutch taxpayers are aware that they are among the largest contributors to the EU budget, so the idea of an even larger contribution is not met with enthusiasm. In addition, Rutte’s center-right coalition does not have a parliamentary majority, so there is a risk that whatever agreement is reached in Brussels, the Dutch parliament will not ratify it.
European Central Bank chief Christine Lagarde, meanwhile, has called on leaders to support a proposal that is in line with the European Commission’s original and therefore more generous plan. “From my point of view, it is better to agree on an ambitious fund according to the proposal, even if it takes a little more time. I would like the leaders to agree on something that will be ambitious than to be quick.” she told Reuters. The Commission intends to borrow money to help economies from the financial markets, which would mean that all Member States will guarantee this debt.
Although diplomats tell the media that the negotiations are slowly approaching an agreement, they estimate that this will not happen in the next few hours. Luxembourg Prime Minister Xavier Bettel, for example, “bounced” home in the early evening to a meeting of his own cabinet, with a plan to return to Brussels later. Some estimate that the summit could continue until Monday. Finnish Prime Minister Sanna Marin, for example, told Politico. If no agreement could be reached by then, the leaders would probably meet again by the end of July.
Central Europe also has objections
The Dutch Prime Minister Mark Rutte and the Finnish Prime Minister also insist on the strictest possible control of how the countries benefiting from the fund will implement the set reforms. Even on this point, Michel took a helpful step on Saturday, but Rutte did not indicate that he would be satisfied with the proposal.
There is also a debate about the conditionality of drawing on the fund by complying with the principles of the rule of law. While Western European countries insist on being as strict as possible, Hungary and Poland want to drop it. The Union institutions are conducting proceedings against these two states for violating European values. On Saturday, Hungarian Prime Minister Viktor Orbán presented a proposal that does not mention the “rule of law” at all. He told reporters on Sunday that he was not opposed to the merger in principle, but that it must be secured by a “new legally binding instrument”, which Orbán said will take a long time to find. Rutt then said on Sunday evening that he was “responsible for all the chaos” during the negotiations.
Polish Prime Minister Mateusz Morawiecki also categorically denied that he could support the current proposal, in which a qualified majority of member states could decide to cut off a state from financial resources. “It’s an instrument of stronger countries that other states can start blackmailing,” the conservative politician told reporters when he arrived at the meeting. He added that Poland also does not agree with combining investments with the achievement of so-called climate neutrality, to which Poland, as the only EU country, has not yet committed itself.
In the afternoon, Michel also met with the premieres of the so-called Visegrad Group, which includes the Czech Republic and Slovakia in addition to Poland and Hungary. On Sunday morning after Saturday’s meeting, the Czech Prime Minister Andrej Babiš expressed his satisfaction with the fact that the Czech Republic managed to obtain more than two billion euros more than the original package thanks to a change in the key for distributing money from the fund.
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