October 29, 2020

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EU summit in Brussels: Compromise on “only” 390 instead of 500 …

EU summit in Brussels: Compromise on "only" 390 instead of 500 ...

The main players of this European marathon summit: Mark Rutte, Angela Merkel, Ursula von der Leyen, Emmanuel Macron and Charles Michel.

Photo: REUTERS

An agreement would have been reached on the fourth day of the EU summit in Brussels. According to The Spiegel and the dpa news agency, the Heads of State and Government had agreed on 390 billion euros in subsidies instead of the 500 billion originally planned. “The final steps are the most difficult, but an agreement is possible,” European Council President Charles Michel said on Monday evening.

A typical European compromise agreed by the heads of state and government of the 27 EU countries. The dispute was not so much the scale of the recovery plan to deal with the consequences of the Corona crisis, but its distribution. Under the original plan of French President Macron and German Chancellor Merkel, worth 750 billion euros, 500 billion in subsidies and the remaining 250 billion in the form of loans would be “distributed.” Much to the dismay of the four thrifty countries (Austria, Denmark, Sweden and the Netherlands) that soon received support from Finland. The Dutch Prime Minister, Rutte in particular, was relentless, much to the horror of the French President, who is said to have slapped his fist on the table undiplomatically after threatening to take the plane to Paris the day before. Angela Merkel has also reacted more than once. But the stoic Rutte did not let himself be fooled.

This morning, European President Charles Michel proposed to pay ‘only’ EUR 390 billion in the form of subsidies and the rest in the form of repayable loans. In the course of the day, the noises that permeated sounded increasingly optimistic, and now, according to German sources, this proposal would have finally made it. This removes a major stumbling block for the conclusion of talks on the new multiannual budget – for a sloppy EUR 1800 billion.

But on Monday night it seemed very much that it would be night work again for the European leaders.

The EU summit in Brussels, which was announced as difficult, began on Friday morning and should have ended on Saturday evening.

On the table was the next European multiannual budget for the next seven years, worth more than EUR 1 000 billion, which is linked to a large economic fund of EUR 750 billion to protect European economies from the effects of a coronary pandemic.

Taken together, this adoes an astronomical EUR 1,800 billion. The President of the European Council, Charles Michel, has spent the last few days – and nights – bending backwards to put new compromise proposals on the table, but some obstacles still seem to be blocking the way to an agreement.

Frugal Member States

Therefore, the distribution of the recovery fund into grants and loans remains difficult. The ‘saving Member States’, the Netherlands, Austria, Denmark, Sweden and, more recently, Finland are also pushing for a smaller recovery fund that minimises the share of subsidies and imposes strict conditions on money. They are diametrically opposed to southern Member States such as Italy, Spain, Greece and Portugal, which are shuddering at the idea that other European Member States could block their recovery plans in the European Council. Another point of contention is the link between money and respect for the rule of law. Poland and Hungary in particular do not want to know about this. Warsaw and Budapest have been regularly opposed in recent years and are now the subject of an Article 7 procedure which could ultimately cost them the right to vote in the European Council of Ministers.

The proposal presented on Monday provided for €390 billion in grants for the recovery fund, €110 billion less than in the original proposal. According to the dpa news agency, there is now a consensus on this, although there is never an agreement in Brussels until everything is agreed. Michel does not touch the sum of 750 billion.

Rekord van Nice

In addition, additional cuts will be made to the largest net contributors to the European budget. The Netherlands in particular benefits from this: in The Hague, the annual rebate rises from one and a half billion euros to more than 1.9 billion euros. Finally, Michel insists on a “form of conditionality” to enforce respect for the rule of law, the proposal says, but what exactly this mechanism should look like remains unclear.

When the Heads of State or Government go back into the night, the balance sheet of the Nice European Summit in December 2000 will be recorded in airtime in Stagat. Then, from Thursday morning to Monday morning, EU leaders discussed important changes to the Treaty on European Union at the longest European summit in history.