EU leaders resume ‘grumpy’ summit to reach deal on coronavirus recovery fund

Dutch Prime Minister Mark Rutte and Luxembourg's Prime Minister Xavier Bettel speak during the first face-to-face EU summit since the coronavirus pandemic
REUTERS

EU leaders have been hunting for compromises as a summit aimed at reaching a new deal on a coronavirus recovery fund entered its second day.

The 27 leaders spent a full day and night on Friday discussing an unprecedented €1.85 trillion (£1.68 trillion) EU budget and coronavirus recovery package.

But tensions began running high over how the huge sums should be spent and what strings should be attached.

The atmosphere “was grumpier this evening than this afternoon,” Dutch prime minister Mark Rutte told Dutch reporters after Friday’s marathon talks. “This is going to take a while, I think.”

The EU executive has proposed a €750 billion (£682 billion) fund, partly based on common borrowing, to be sent as loans and grants to the most needy countries.

That comes on top of the seven-year EU budget that leaders were fighting over when Covid-19 hit.

Hungary's Prime Minister Viktor Orban arrives for an EU summit at the European Council building in Brussels
POOL/AFP via Getty Images

The summit broke up around lunchtime on Saturday so that each delegation could discuss the new proposals from host Charles Michel, according to a European diplomat.

The new proposals reduce the proportion of straight-out grants in the rescue package and raise the proportion of loans that will need to be paid back, in an apparent nod to a grouping of “frugal” nations led by the Netherlands, the diplomat said.

A general view prior to the start of the first face-to-face EU summit since the coronavirus pandemic
REUTERS

But the issue of how to track the rescue money remains the key sticking point, the diplomat said. Mr Michel, the current president of the European Council, proposed a measure that would stop short of allowing any country a veto on how governments spend the money.

Another diplomat described Mr Michel’s new proposals as just the first step in what could be a long journey to agreement.

Dutch Prime Minister Mark Rutte, second right, speaks with Sweden's Prime Minister Stefan Lofve
AP

Mr Rutte is seen as a leader of the four so-called “frugal” nations urging conditions such as economic reforms attached to EU handouts to help countries recover from the hammer blow of the coronavirus.

Ahead of the summit, he took part in crisis talks with German chancellor Angela Merkel, French president Emmanuel Macron, Italy’s Giuseppe Conte as well as the leader of the EU’s executive, Ursula von der Leyen, and Mr Michel.

One of Mr Rutte’s allies, Austrian chancellor Sebastian Kurz, said the talks were not totally stalled. “There is more and more movement in our direction,” he told ORF television.

France's President Emmanuel Macron, Luxembourg's Prime Minister Xavier Bettel and European Council President Charles Michel speak next to Austria's Chancellor Sebastian Kurz during the first face-to-face EU summi
REUTERS

The pandemic sent the EU into a tailspin with 27-nation bloc’s economy contracting by 8.3 per cent this year, according to the latest predictions. Around 135,000 of its citizens have died from Covid-19.

As leaders met in person for the first time since February, they wore face masks, bumped elbows and sat in a cavernous meeting hall so they could maintain social distancing.

Many of their negotiating positions were further apart than their chairs.

After two fruitless sessions on Friday, Mr Michel met key players – Mr Rutte, Mr Macron and Hungary’s Viktor Orban – in an attempt to narrow the gaps between them.

German Chancellor Angela Merkel, second right, speaks with from left, Italy's Prime Minister Giuseppe Conte, Dutch Prime Minister Mark Rutte and European Commission President Ursula von der Leyen during a meeting on the sidelines of an EU summit in Brussels
AP

Mr Orban does not want strings attached to EU funds, Mr Rutte does, and Mr Macron is arguing that Europe must show solidarity to claw its way out of the crisis.

Mr Michel is expected to present leaders with possible compromises when the summit resumes, though it remains to be seen if they can reach agreement or will have to schedule another meeting.

Czech prime minister Andrej Babis was pessimistic after the first day.

He said: “I don’t have the impression that we are getting close to an agreement.”

Mr Rutte, however, said that despite the mounting acrimony, the talks were creeping forward.

“You make a bit of progress during the day,” he said.

“For a start, it helps if you better understand each other’s positions, then you can search for possible compromises.”

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