European summit: talks intensify to reach agreement on recovery plan

Meetings have multiplied between European leaders Sunday, July 19 in Brussels, in the hope of avoiding a failure on the negotiation of the post-coronavirus recovery plan, which has revealed important divisions between states.

On the third day of a summit scheduled to last two, after more than 55 hours of meetings, discussions at 27, several times postponed, resumed around a dinner around 19:20 (17:20 GMT).

The frugal + Finland block at 375 billion in subsidies. The other 22 do not want to go below 400.
Are 5 countries ready to fail the summit for 25 billion?
That's the question on the dinner menu.

The President of the European Council, Charles Michel, mediator at the summit, held numerous face-to-face meetings or small groups all day long, most often on the balcony of his office where a long table was installed and whose photos punctuated social networks.

Welcome to day 3 of #EUCO on #MFF and Recovery Fund @ eucopresident started meeting just now with Chancellor Merkel @RegSprecher and president @EmmanuelMacron and @vonderleyen pic.twitter.com/uPfWfQAO5U

Things are "moving slowly"

The outcome of the summit, the longest of the leaders of the European Union (EU) since that of Nice in 2000 on a revision of the treaties in the framework of enlargement to the East (four days and four nights), remained very uncertain. Things are "moving slowly," said a European source.

The Luxembourger Xavier Bettel, accustomed to the summits for seven years, admitted to having "rarely seen such diametrically opposed positions, on many points".

On the negotiating table, a fund constituted by a borrowing capacity of 750 billion euros to revive the European economy, which is facing a historic recession, backed by the long-term budget of the EU (2021-2027) of 1.074 billion euros.

>> Read: Covid-19: Why Europe is tearing apart on the economic recovery plan

The latest discussions have mainly focused on the portion of the stimulus fund that will be devoted to grants, compared to what would be returned to the states in the form of loans (and therefore repayable).

The so-called "frugal" countries (Netherlands, Austria, Sweden, Denmark, with which Finland is associated) favor loans and advocate a reduction in the overall volume of the plan.

The necessary unanimity of the 27 Member States makes an agreement particularly difficult. Especially since it is not the only point of friction.

Among these, the link between the payment of aid and respect for the rule of law, which particularly bristles with Budapest and Warsaw, currently in the crosshairs of the EU.

Paris and Berlin for major grants

Regarding subsidies, France and Germany want a substantial part of the stimulus budget to be devoted to it, in the spirit of the 500 billion fund they had proposed in mid-May. And they argue that the amount planned for direct support for national reform plans is 325 billion euros, as in the last proposal, according to European sources.

The frugals have proposed a perfect balance between the two, according to these sources. "We are looking for a compromise between 350 and 400," a source told AFP.

German Chancellor Angela Merkel opened the day by warning that it was "possible that no result could be obtained", while French President Emmanuel Macron had warned that "compromises" could not be made "at the cost of the 'European ambition'.

The second day of discussion, under high voltage, ended in the night from Saturday to Sunday on a "very hard" meeting, according to several sources, between the French president, the German chancellor and the leaders of the four "frugal" and from Finland.

In an attempt to coax the Dutchman Mark Rutte, who is particularly reserved on the recovery package and who demands unanimity for the validation of the national reform plans requested in return for European aid, Charles Michel proposed a mechanism allowing a country which would have reservations to open a debate at 27.

Such a configuration would de facto amount to a right of veto for each capital. This request worries Rome and Madrid, who fear being subjected to an imposed reform program (labor market, pensions ...).

With AFP

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