EU LEADERS EXTEND SUMMIT AS THEY HAGGLE OVER BUDGET, VIRUS AID

European Union leaders on Saturday extended their summit by an extra day, convinced they were finally closing in on a deal for an unprecedented 1.85 trillion euro ($2.1 trillion) EU budget and coronavirus recovery fund, an EU official said.

Heading into a balmy summer night, a deal was still far off, but several key nations said negotiations were at least heading in the right direction despite tensions that were running high after months of battling the pandemic.

Shortly after 11 p.m., summit host Charles Michel’s spokesman tweeted that the plenary meeting had finished for the night and would reconvene at noon today.

Two full days and one night of discussions by the bloc’s 27 leaders oscillated between raw irritation over how the huge sums should be spent and what strings should be attached to a glimmer of hope that somehow a deal could materialize — if not this weekend, then at least within a few weeks.

The summit was supposed to end Saturday but more negotiations lay ahead for leaders as they dealt with their toughest crisis in years, one that has burdened the bloc with its worst recession ever. The pandemic has sent the EU into a tailspin, with 27-nation bloc’s economy estimated to contract 8.3 percent this year, according to the latest predictions. Around 135,000 of its citizens have died from COVID-19.

Michel has proposed a 750 billion-euro fund, partly based on common borrowing, to be sent as loans and grants to the most needy countries. That comes on top of the seven-year, 1 trillion-euro EU budget that leaders were fighting over even before COVID-19 slammed their continent.

Despite the urgency and seriousness of the crisis, there were deep rifts between some richer nations in the north, led by the Netherlands, which want strict controls on spending, and struggling southern nations like Spain and Italy, which have been especially hit hard by the pandemic and are looking for as much help as they can get.

Michel’s latest proposals reduce the proportion of grants in the rescue package and raise the proportion of loans that will need to be paid back.