EU adopts stimulus to rescue bloc’s economies.
BRUSSELS — After nearly five days of intense haggling, European Union leaders stepped up Tuesday to confront one of the gravest challenges in the bloc’s history, agreeing to a landmark spending package to rescue their economies from the ravages of the coronavirus pandemic.
The 750 billion euro ($857 billion) stimulus agreement, spearheaded by Chancellor Angela Merkel of Germany and President Emmanuel Macron of France, sent a strong signal of solidarity even as it exposed deep new fault lines in a bloc reshaped by Britain’s exit.
The deal was notable for its firsts: European countries will raise large sums by selling bonds collectively, rather than individually; and much of that money will be distributed to the hardest-hit nations as grants with no repayment needed — not as loans that would swell their national debts.
Those extraordinary steps reflected a difficult consensus among members: that the scale of the crisis facing the world’s biggest bloc of nations required groundbreaking measures to ensure its legitimacy, stability and prosperity.
“Europe has shown it is able to break new ground in a special situation. Exceptional situations require exceptional measures,” Merkel said in a news conference at dawn. “A very special construct of 27 countries of different backgrounds is actually able to act together, and it has proven it.”
But the negotiations in Brussels — the EU’s longest summit meeting in 20 years — were notable for their exceptional rancor. And the compromises that allowed Merkel, whose country holds the EU’s rotating presidency, to guide 27 nations toward consensus became all the more apparent, and none were too pretty.
The compromise that got the most attention was between Macron of France, who pushed for large-scale grants to southern European countries like Italy and Spain hit hardest by the pandemic, and Prime Minister Mark Rutte of the Netherlands, who pressed for more loans and structured reforms.
But it was how Merkel mollified the prime ministers of Hungary and Poland, Viktor Orban and Mateusz Morawiecki, that may prove more consequential.
Not only was their money from Brussels increased, despite regular questions about the misuse of those funds and efforts to condition the aid on adherence to the rule of law, but Merkel promised to help resolve disciplinary measures against their countries for anti-democratic behavior.
The concessions to Hungary and Poland could face challenges because the package must be approved by the European Parliament.