EU leaders discuss recovery; ^750-bn stimulus not soon
German Chancellor Angela Merkel raised doubts that European Union leaders, meeting in person for the first time in five months, would be able to agree this week on a landmark ^750 billion ($855 billion) recovery fund to help their economies heal from the pandemic.
“We’re entering these discussions with plenty of vigor, but I have to say that the differences remain very, very great, so I can’t predict whether we’ll reach an agreement here,” Merkel said in Brussels before the start of the summit. “I expect very, very difficult negotiations.”
Their meeting comes after weeks of intense negotiations between diplomats and governments, seeking to bridge differences over the total size of the package, how money would be distributed and the proportion of loans versus grants. Officials have warned that another summit later this month could be needed to clinch a deal.
Stocks in Europe slipped as investors weighed the prospects for a deal on the proposal. The Stoxx Europe 600 Index fluctuated before turning lower after Merkel’s comments, with banks leading the declines.
Dutch Prime Minister Mark Rutte seemed even more pessimistic on reaching a deal at this gathering, and has said that any disbursements from the recovery fund need to be contingent on reforms from each country, which would be subject to unanimous approval by each member state. This would ensure that funds would only go toward projects to help laggard economies catch up and would give each nation an effective veto.