EU reaches deal on virus aid, budget
Negotiators hammer out $2.1 trillion package after 4 days of contentious talks
BRUSSELS — European Union leaders early today clinched an unprecedented $2.1 trillion budget and coronavirus recovery fund, finding unity after four days and as many nights of wrangling in one of the longest summits in the bloc’s history.
To confront the biggest recession in its history, the EU reached a consensus on a more than $860 billion coronavirus fund to be doled out in loans and grants to the countries hit hardest by the virus. That comes on top of the seven-year budget of more than $1 trillion.
“Never before did the EU invest in the future like this,” Belgian Prime Minister Sophie Wilmes said.
“It is a historic day for Europe,” said French President Emmanuel Macron.
Just shy of holding the longest EU summit in history, the 27 leaders huddled in the main room of the Europa center and bumped elbows and made jokes before giving the package their final approval.
“We did it!” EU Council President Charles Michel said on Twitter. “Europe is united.”
“We showed our belief in our common future,” Michel said.
“There were extremely tense moments,” Macron said.
What was planned as a two-day summit scheduled to end Saturday was forced into two extra days by deep ideological differences among the 27 leaders.
Overall, spirits were high this morning after the talks hit rock bottom Sunday night.
Dutch Prime Minister Mark Rutte, defending the cause of a group of five wealthy northern nations — the Netherlands, Austria, Finland, Sweden and Denmark — was on the brink of securing limits to costs and imposing strict reform guarantees on any rescue plan for needy nations. It was the focal point of the marathon talks that started on Friday morning.
On Sunday night, after three days of fruitless talks and with hope dimming, Michel implored leaders to overcome their fundamental divisions and agree on the budget and recovery fund. Unanimous agreement was required.
After discussions with leaders Monday, Michel adjusted his proposals and said he was “convinced that an agreement is possible.”
The coronavirus has sent the EU into a tailspin, killing around 135,000 of its citizens and plunging its economy into an estimated contraction of 8.3% this year. Spanish Prime Minister Pedro Sanchez insisted the adoption of an ambitious plan was required as the health crisis continues to threaten the continent.
“We must give an answer that gives certainty, reassurance, calm, serenity, both to companies, to workers and to all citizens in order to face this pandemic with all the guarantees,” he said before the deal was reached.
The bloc’s executive has proposed an $860 billion coronavirus fund, partly based on common borrowing, to be sent as loans and grants to the countries hit hardest by the virus. That comes on top of the seven-year EU budget that leaders had been haggling over for months even before the pandemic.
With Macron and German Chancellor Angela Merkel negotiating as the closest of partners, the traditionally powerful Franco-German alliance could not get the quarreling nations in line for long.
At their dinner Sunday night, the leaders debated a proposal from the five wealthy northern nations that suggested a coronavirus recovery fund with 350 billion euros of grants and the same amount in loans. The five EU nations — nicknamed “the frugals” — had long opposed any grants at all, while the EU executive had proposed 500 billion euros.
The latest compromise proposal stands at 390 billion euros in grants.
All nations agree in principle that they need to band together, but the five richer countries in the north want strict controls on spending, while struggling southern nations like Spain and Italy say those conditions should be kept to a minimum.
The five have been pushing for labor market and pension changes to be linked to EU handouts and for a “brake” enabling EU nations to monitor and, if necessary, halt projects that are being paid for by the recovery fund.
A French diplomat who was not authorized to speak publicly about the negotiations said joint efforts from Merkel and Macron kept hopes of a deal alive twice during the weekend — on Saturday night at a meeting with “the frugals” that eased tensions, and then on Sunday when an exasperated Macron “metaphorically slammed his fist into the table during dinner.”
“It helped twice relaunch negotiations in a positive way,” the official said, clarifying an earlier account that Macron had actually struck the table.