International Observation: The "Marathon" Summit Launches the EU's "Strongest" Economic Stimulus Plan in History
Xinhua News Agency, Brussels, July 21st (International Observation) The "Marathon" summit launches the EU's "strongest" economic stimulus plan
Xinhua News Agency reporter Li Jizhi Ren Ke Zuo Wei
After 4 days and 4 nights of see-saw, negotiation, and compromise, the first face-to-face meeting of the leaders of the 27 EU member states after the outbreak of the new crown epidemic finally ended in the early morning of the 21st. The summit reached the EU’s "strongest" economic stimulus plan, paving the way for European economic recovery after the epidemic.
Analysts believe that this achievement symbolizes that the EU has taken an important step on the road to integration, but the contradictions within the EU are still intertwined.
Disagreement and compromise
The EU summit, which opened on the 17th in Brussels, the capital of Belgium, was originally scheduled for two days. The duration of the conference has been repeatedly extended due to endless debates over the size of the EU's 2021-2027 budget and the "recovery fund" plan.
According to the final agreement, the EU's long-term budget from 2021 to 2027 is €1.074 trillion, which is more than €110 billion higher than the previous seven-year fiscal framework. On the basis of the budget, a "recovery fund" with a total of 750 billion euros will be set up, so that the total scale of fiscal tools that the EU can use in the future will reach 1.8 trillion euros. In the "recovery fund", 390 billion can be used as free allocations and 360 billion as low-interest loans.
Germany and France initiated the EU to establish a "recovery fund" at the end of May this year to help EU member states and industries severely affected by the epidemic. The European Commission subsequently adopted this initiative. At this summit, various countries had heated discussions on the scale of the “recovery fund”, the ratio of unpaid grants to reimbursed loans, and whether and how to make the reform of the rule of law a precondition for aid.
According to reports, the Netherlands, Denmark, Sweden, and Austria, known as the “Frugal Countries”, proposed to reduce the scale of the “recovery fund” and oppose the excessive use of free grants to implement aid. If member states want to receive aid, they must commit to legal reforms. However, Spain and Italy advocate maintaining the size of the fund and call on all parties to reach an agreement as soon as possible. Eastern European countries such as Hungary and Bulgaria oppose linking aid to reform of the rule of law, believing that this is an opportunity to squeeze into irrelevant issues.
Analysts pointed out that the final plan reached on the 21st is the result of compromise. Compared with the original version, there are significant differences in the total budget framework and the use of the "Recovery Fund", especially in the reduction of the proportion of allocated funds and the increase in the proportion of loans in the "Recovery Fund".
Unity and the future
Michelle, President of the European Council, praised the summit as a "marathon in which all 27 member states won and the people benefited more." European Commission President von der Lein called the meeting "an important step towards recovery in Europe."
German Chancellor Merkel, French President Macron and other European leaders also praised the efforts of EU member states to bridge differences and maintain unity.
Since the outbreak of the new crown epidemic, Europe has once become the epicenter of the global pandemic. Although the peak has now passed, the resumption of work and production and the relaxation of control have triggered a local rebound. Many countries have to suspend the "lifting of the ban" procedures and restore strict epidemic prevention measures.
Under the impact of the epidemic, the European economy was hit hard. Eurostat predicts that EU economic growth is expected to shrink by 8.3% this year.
An unprecedented crisis calls for unprecedented solutions. Analysts pointed out that European countries that have been hit by both the epidemic and the recession, abandon their differences and reach a strong economic stimulus plan, which is of positive significance in the current situation.
However, analysts also pointed out that the European Union’s trend of geopolitical complexity, diversification of interests, and fragmentation of power can be seen from this summit. Michelle, President of the European Council, had to stop roundtable meetings frequently and switched to group negotiations to promote breakthroughs.
After Britain’s “Brexit”, some analysts believe that the effect of the German and French twin engines will be more obvious, but the “Recovery Fund” initiative jointly proposed by Germany and France encountered continuous challenges from multiple forces at this summit.
After the negotiations, Macron reflected that the European Union did not pay enough attention to the different voices of the Netherlands and other countries in the past. This is a lesson that should be learned. If the demands of these countries that firmly support the European Union are not met, it will stimulate the rise of extreme Euro-skeptics and threaten the process of European integration.
Analysts believe that the summit has shown the unity of EU countries to a certain extent, but the various contradictions within the EU cannot be ignored. The European integration process has a long way to go.