• EU.Warm-up summit in Brussels to negotiate the Recovery Fund and 7 years of Budget

Negotiating a Recovery Fund of up to 750,000 million euros and a Budget of 1.1 billion more for the next seven years is an almost impossible task. It is the toughest EU negotiation under normal conditions and a titanic challenge having to fight at a distance, without flexibility, without bilateral encounters, without being able to use all the classic skills of persuasion. It is normal for the process to take years and for the final phase to require repeated Summits, but time is pressing and a good number of governments seem to be falling into some complacency. That is why the president of the Commission, Ursula von der Leyen , yesterday urged the leaders of the 27 to get their batteries. So Chancellor Angela MerkelHe did the same on Thursday before the Bundestag, noting that some do not seem to understand what is really at stake. And that's why this Friday too, ECB President Christine Lagarde shook leaders with a resounding message: "The worst is yet to come . "

In the last decade, Mario Draghi was the voice that most insistently demanded in the large community meetings a fiscal and political effort equivalent to the monetary one, but he preferred some discretion about the keys he gave behind closed doors. Lagarde is more direct and wants the words to echo. Diplomatic sources point out that the Frenchwoman has urged to react with speed and forcefulness, because the unemployment of the Eurozone can go above 10% and the contraction of this exercise approaching 9%. "The recovery package must be ambitious, fast, flexible and firmly anchored in economic reforms. The faster it is agreed, the better for the EU economy," she told her colleagues, according to those sources.

No agreement was expected at this European Council and no agreement was reached after four and a half hours of video , in which topics such as the last meeting with Boris Johnson on Brexit or the Ukraine peace agreements were also superficially touched upon, extending six months more sanctions against Russia. It was the first time that the heads of government had met, even remotely, to discuss the new proposals with figures put on the table by the European Commission. By now everyone knows what others think, and it is normal for them to just read what their most expert advisers have written, but these interventions always help to establish positions.

The idea is to calibrate, to try to see where there may be 'landing zones' between the irreconcilable a priori demands of each other. And it was appreciated that nobody tried to sell it as an essential and constructive appointment. It was a procedure, a necessary one, but a procedure before the formal fight. "On some issues we need to continue discussing. In recent weeks we have been able to consult with the capitals to seek clarity and now we are turning to the new phase: that of negotiating. We want to have a face-to-face meeting in mid-July, and before that there will be concrete proposals for try to make a decision, "said Michel.

Starting points

The starting points have not changed much in recent weeks, but perhaps the most relevant fact is that all countries, including the most orthodox, accept that the European Recovery Fund has loans and direct transfers . They wanted only credits, but the self-proclaimed Frugales have assumed that a part will go in contributions not to return. The key is what to offer in exchange for a relatively ambitious budget and that post-pandemic recovery plan.

The slogans seem more or less defined, it remains to be seen the balance and the numbers that Charles Michel , President of the European Council, must put on paper in the coming days to be able to hold a new Summit in the first weeks of July, in all likelihood. . There are things that can only be done this way, in rooms without advisers, cameras or microphones. Where things can be said that are not recorded. The great lesson that all delegations draw from this pandemic is that transparency can be good for many things, but not to achieve definitive progress at the highest level.

From the Commission, the Council and the most involved delegations point to the key vectors. The larger the final package (recovery and Budget), the more conditional the hawks will require to sign. Not a conditionality linked to austerity like that of the past decade, to immediate fiscal adjustments and cuts, but to far-reaching reforms to boost productivity and modernize economies. "If someone expects transfers, money they do not have to pay back, then I think it is perfectly legitimate for contributors to supervise it," said Austrian Chancellor Sebastian Kurz .

You can also play with the so-called 'rebates', the compensatory checks for the net taxpayers who see their contribution more disproportionately. With the start date of repayment of the unprecedented emissions that the European Commission will make. Von der Leyen has proposed that the principal not be paid before 2028, and with a maximum of until 2058, but conservatives do not want to go that far and mortgage future generations. With Germany in a very different position than in the previous crisis, and a SPD finance minister, a Social Democrat, the Hanseats or frugal people are weaker. "Without anchor and course," according to Joaquín Almunia. And that's why the European People's Party has assumed the role of 'bad cop' these weeks trying to lobby.

Objective: the month of July

Another option is to see what can be done to link funds to compliance with the rule of law, which could lead to a Polish or Hungarian veto . Or make changes to the distribution keys. The Commission has designed a formula that takes into account unemployment from 2015 to 2019, but also the situation of the GDP of five years ago, which favors the poorest and not necessarily those most affected by the pandemic, when in theory it is the objective of the Fund. Von der Leyen defended his proposal yesterday, assuring that there are "many direct variables" with the medical crisis and the virus, but reiterated that the shock has been more severe in those who already had previous weaknesses.

And of course there is the question of own resources, the possibility of having new income to finance the massive debt issuance that will be necessary to pay the loans and transfers. It would be through fees and taxes, something that practice shows that it is almost impossible to materialize and harmonize.

The objective is to try to reach an agreement in July, in a Summit, two or whatever is necessary. In theory, it can be postponed until December, because the new Multiannual Financial Framework for the period 2021-2027 does not start until then. But there are powerful reasons to accelerate. First, to be able to use up to a total of 11,500 million euros this same course with which to alleviate the effects of the pandemic.

Second, to send a message of confidence and strength to the rest of the world. And third, because there are many suppurating issues open in the EU and mixing them can be catastrophic. For example, the dirty war over Brexit that Germany expects for September and October, when the time to negotiate with London runs out. Or the discrepancies over and with China, the immigration issue and, above all, the elections in the United States, the great destabilizing factor.

"We have to be innovative, creative. It will be difficult, complex, we must not underestimate the task, but I see strong political will," said Charles Michel in conclusion. "It is essential that we not waste time, that we have firm feet. The severity justifies an ambitious joint response. Investments and reforms. I am glad that so many leaders have agreed that an agreement is needed soon, before the summer break. The effectiveness of the answer depends on it ", settled Von der Leyen.

In accordance with the criteria of The Trust Project

Know more

  • economy
  • Coronavirus
  • Covid 19

HousingThe next house: rent on the rise and the price of the second hand, on the decline

PoliticsThe PP prepares more than 1,000 'spokespersons' to spread the 'plan B' of Pablo Casado

TransportationThe de-escalation that comes at airports: more waiting queues, temperature cameras and forms

See links of interest

  • Last News
  • Programming
  • English translator
  • Work calendar
  • Daily horoscope
  • Santander League Ranking
  • League calendar
  • TV Movies
  • Cut notes 2019
  • Themes
  • Carlos Ruiz Zafon
  • Real Madrid - Herbalife Gran Canaria
  • Alavés - Real Sociedad
  • Huesca - Mirandés
  • Numancia - Cádiz
  • Real Madrid - Valencia, live