Tuesday morning after four days of difficult negotiations, the 27 EU leaders reached an agreement on a recovery fund to restore the European economy after the corona crisis. Linked to this, there is also agreement on the European multi-year budget for 2021-2027.

After more than four days of negotiations in Brussels, the President of the European Council, Charles Michel, reports at 5.30 am that there is a deal.

There will be a temporary recovery fund of 750 billion euros, the majority of which (390 billion) will be donations and the rest (360 billion) will be loans. In the first proposal, there were still 500 billion in gifts.

On behalf of the 27 EU Member States, the European Commission enters the capital market to borrow this amount. Never before has the Commission been given such great financial powers.

This is an exceptional step, the Member States recognize in the agreement. Therefore, it is emphasized that this power is temporary in size, duration and range.

The European budget for 2021-2027 will be EUR 1.074 billion. That amount has also been adjusted downwards.

The agreement took a long time to come because of the opposition of the Netherlands, Denmark, Austria and Sweden (the 'economical four'). Finland also joined this later. These countries hammered at lower amounts and as few gifts as possible under strict conditions.

Rutte receives the desired emergency brake

Prime Minister Mark Rutte is satisfied with the package, he said in a news conference. The prime minister called it via Twitter "a good package in which Dutch interests are safeguarded".

Rutte got his desired 'emergency brake' as soon as loans or gifts are promised. Countries must submit reform plans to the European Commission if they want to make use of the recovery fund. These plans often relate to the labor market or the pension system.

If these conditions are not met, in the most extreme case each Member State will be given the option of temporarily stopping payment. In response to the agreement, Rutte called the emergency brake a "solid stick behind the door" that ensures that the reforms are "nailed down".

The Italians, Spaniards and Portuguese are less happy with that. These southern European countries have been hit hard by the corona crisis and are likely to call on the recovery fund. They prefer not to let other Member States look closely at matters that they want to regulate nationally, such as changes in the labor market or the pension system.

Satisfied with a higher discount, not with European tax

Rutte and his 'economical' allies Denmark, Austria and Sweden can expect a higher discount on the EU contribution for the coming budget period 2021-2027. For the Netherlands, this means that the contribution is 1.9 billion euros lower every year. This means that the Netherlands, like the other 'economical' allies, remains a net contributor to the European Union.

The advantages have a price: the new budget cuts budgets for innovation, sustainability and climate.

That is not to say that the climate is snowed under. It has been agreed that 30% of all expenditure from both the recovery fund and the budget should contribute to achieving the EU climate goals by 2030.

The Netherlands is less happy with more European taxes included in the agreement. From 2021, the EU will collect taxes for non-recyclable plastic itself, plans are being made to tax European CO2 by 2023, work is being carried out on a so-called digitax and a tax will be levied on financial transactions.

See also: 'Economical' attitude Rutte seems to be paying off

Accord 'historical' but not without a struggle

French President Emmanuel Macron called the deal "historic" in a joint press conference with German Chancellor Angela Merkel.

European Council President Michel also expressed his satisfaction. " We did it ," he said at a news conference early Tuesday morning. "This is a good and strong deal," said Michel, who called the negotiations "a marathon."

It was not automatic either. At one point, Macron was more than fed up with the 'frugal four' attitude and would have threatened to leave the summit prematurely.

There was also a lot of criticism of the Netherlands from the Italian and Spanish corners.

It remains to be seen how long Rutte's satisfaction with the agreement will last. The modernization of the multi-year budget has failed to materialize, a wish of the Netherlands, and Rutte has suffered considerable image damage by posing as' Mr. no no no'.


EU on recovery fund: 'The right deal at the moment'