Historic EU deal will rebuild Italy, says Conte
£750bn coronavirus rescue package agreed after tough negotiations at marathon five-day summit
ITALY’S prime minister said yesterday that a historic €750billion EU coronavirus rescue package, agreed on the fifth day of marathon summit talks, would help rebuild his pandemic-ravaged country.
The European Council meeting, which began on Friday and was meant to end on Saturday, was one of the longest in history. After more than 90 hours of tense negotiation, it ended at 5.30am yesterday.
Coronavirus has killed about 135,000 in the EU and plunged its economy into an estimated contraction of 8.3 per cent this year.
Giuseppe Conte said Italy would be the largest single beneficiary of the €750billion (£678billion) deal which, in a major step forward for EU integration, bust a long-standing taboo against raising large amounts of common debt.
Italy will get €208billion: €81billion in handouts and €127billion in loans.
The deal gives Italy “the opportunity to restart with strength” and the government the responsibility “to change the face of the country,” Mr Conte said.
Spain will receive the second largest sum, €140 billion, with just over half in grants and the remainder in loans.
The European Commission will raise capital against the EU Budget with richer countries effectively underwriting loans to fund spending in countries that would struggle to take on the debt on their national balance sheets.
“We did it! Europe is strong. Europe is united,” said Charles Michel, the president of the European Council.
“These were, of course, difficult negotiations in very difficult times for all Europeans.”
Leaders had argued over how money from the rescue fund should be paid out to the hardest hit countries in loans and grants. At the end, they agreed €390billion of the rescue plan should be handouts and €360billion in loans.
Leaders also agreed a €1.074trillion Budget, the first to be agreed since Brexit and first without UK contributions since it joined the bloc in 1973, completing a €1.82trillion package.
Mark Rutte, the prime minister of the Netherlands, and his “frugal” allies of Austria, Sweden, Denmark and, at times, Finland blocked the original plan of €500 billion in grants and €250billion of loans.
Germany and France had insisted at least €400billion of the package must be grants to shield the fragile economies of southern Europe.
Emmanuel Macron, who accused Mr Rutte of taking on Brexit Britain’s intransigent role as the pair clashed during heated talks, called the compromise a “historic day for Europe”.
Angela Merkel, the German Chancellor, said, “We have laid the financial foundations for the EU for the next seven years and came up with a response to this arguably biggest crisis of the European Union.”
The northern frugals did secure an “emergency brake” on the disbursement of money. Spain and Italy rejected Mr Rutte’s call for an outright veto on spending but other countries will be able to review and demand changes to their spending plans.
“Countries will know that there is an extra set of eyes, all of us in the EU sitting at that table, watching whether you are doing what you have committed to do,” Mr Rutte said.
Hungary’s Viktor Orbán had threatened to scuttle the whole package if the bloc insisted on making funding conditional on respect for the rule of law.
EU leaders watered down that condition to bring Hungary and Poland, which have been at loggerheads with Brussels over democratic standards, on board. But that is likely to mean that the package will face objections from MEPS.
‘We have laid the financial foundations for the EU for the next seven years and came up with a response to this arguably biggest crisis of the European Union’