The Twenty-Seven close to an agreement on the post-coronavirus stimulus plan? Confidence seemed in order, on the night of Monday 20 to Tuesday 21 July, after four days of a marathon summit and a fierce battle between the "frugal" countries and the Franco-German couple.

"The last stages are always the most difficult, but I am confident (...) I am convinced that an agreement is possible", declared the President of the European Council, Charles Michel, who submitted to the leaders of the Union European Union (EU) a revised proposal for the recovery plan, giving new pledges to the "frugal".

"Close" agreement

"We think an agreement is likely on the basis of this text even if we must remain cautious," reacted a French diplomatic source. In the evening, a European source estimated that an agreement was "close".

Sign of intense bargaining between the different delegations, the plenary session at 27 was postponed several times in the afternoon to finally start a little before 9:30 p.m. local (7:30 p.m. GMT). It was interrupted two hours later for discussions on "technical adjustments", according to the spokesperson for the president of the Council, Barend Leyts.

EU recovery plan: "Discussions were tense during this summit"

Charles Michel's proposal, according to a document obtained by AFP, downgrades the share of subsidies in the recovery plan of 750 billion euros: 390 billion, against the 500 billion initially planned and defended by Berlin and Paris. This will be the common debt to be repaid by the 27. In addition, 360 billion euros will be available for loans, repayable by the requesting country.

Compromise on the rule of law

The reduction in the volume of donations is a gesture in the direction of "frugal" countries - the Netherlands, Sweden, Denmark, Austria - joined by Finland. On several occasions, they threatened to derail this massive plan to support the economy, which would above all benefit southern countries such as Italy and Spain, the most affected by the pandemic.

A compromise has already been found in plenary on one of the thorny points of the negotiations: the link between the granting of European funds and respect for the rule of law, according to several European sources. According to this mechanism, any measure of suspension or possible reduction of EU funds due to violations of the rule of law would have to be approved by a qualified majority of Member States (55% of EU countries representing 65% of the total population). ), which is more difficult to achieve than what the Commission recommended.

This conditionality met strong opposition from Poland and Hungary, two countries in the crosshairs of the Commission and the European Parliament which have initiated proceedings against them for violations of the rule of law. The pro-Orban Hungarian press hailed a "great victory". Viktor Orban demanded at the summit the end of this so-called "article 7" procedure against his country, which can in theory lead to sanctions.

Increase in discounts granted to "frugal"

Charles Michel's latest compromise proposal also provides for a substantial increase in the discounts granted to "frugal" people, who deem their net contributions to the EU budget disproportionate. The correction granted to Germany would remain stable.

Dutch leader Mark Rutte, the most difficult to convince, admitted in the morning that progress had been made in his direction. Charles Michel also sought to respond to the request for conditionality demanded by Mark Rutte on the stimulus plans presented by each country in return for aid. 

The recovery fund is backed by the EU's multiannual budget (2021-2027). The project provides for an endowment of 1,074 billion euros, or 154 billion euros per year. It was discussed at a summit in February, before the coronavirus crisis, but the leaders could not come to an agreement.

With AFP

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