EU leaders in bitter clash over Covid-19 recovery package
Hungary’s prime minister, Viktor Orbán, accused his Dutch counterpart of using the same methods as his country’s former communist leaders on Sunday, as EU leaders publicly clashed during tense and acrimonious negotiations over the terms of a proposed €1.8tn budget and recovery package for the bloc.
A third difficult day of a summit of the EU’s 27 heads of state and government – the first in person for five months – saw movement towards agreement as talks stretched deep into the night, but laid bare the deep splits between north and south, and east and west.
At a late evening dinner, the European council president, Charles Michel, who is chairing the summit, asked the leaders whether they were “capable of building European unity and trust. Or, through a tear, will we present the face of a weak Europe, undermined by mistrust?”
The leaders have been in intense debates over the size of the recovery fund for countries hit hardest by the coronavirus pandemic and the EU’s seven-year budget, known as the multi-financial framework, which is due to start next year.
There are also stark differences over the nature of the conditions attached to the emergency funding and the balance between grants and loans on offer. The money will be borrowed from the capital markets by the European commission.
The Dutch prime minister, Mark Rutte, has insisted he cannot be expected to take on extra national debt in order for the EU to make cash payments to member states without his parliament having a say.
In response, Orbán, the nationalist prime minister of Hungary, who was an anti-communist dissident in his youth, accused Rutte of aping Soviet methods to crush dissent by failing to properly set out the terms on which funds would be blocked.
The Netherlands is seeking reassurance that commonly issued debt will be properly spent and wants the ability to hold back disbursements where there are governance concerns.
“They would like to introduce a new mechanism that didn’t exist until now,” Orbán told reporters, of the Dutch proposal for a country to be able to stop funding to member states undermining the rule of law. “I think it is questionable whether it has a basis in the treaty at all. I am coming from an ex-communist country. When the communist regime decided to attack us, they use unclarified legal terms exactly as the same as written in the proposal of the Dutch man … Saying ‘general deficiencies’. When I was arrested by the police and I asked them what I had done which is illegal, they say general deficiencies. What the fuck does it mean?”
The row over the rule of law was dwarfed, however, by a more significant dispute over the size and form of the recovery fund, with “frugal” countries of the Netherlands, Austria, Denmark and Sweden defying France and Germany in trying to reduce the level of grants.
EU diplomats said the four northern member states, to the evident frustration of the German chancellor, Angela Merkel, and France’s president, Emmanuel Macron, were pushing to reduce the value of grants available from €500bn to €350bn while increasing the size of the rebates they currently have on their budget contributions. The whole recovery package would also be reduced to €700bn from the €750bn initially proposed by the European commission.
Luxembourg’s prime minister, Xavier Bettel, said that in seven years of attending EU meetings, “I have never seen positions as diametrically opposed as this”.
“The negotiations are difficult, perhaps one of the most difficult I have ever been involved in, yet the spirit of compromise has not yet disappeared,” tweeted Latvia’s prime minister, Krišjānis Kariņš.
During Sunday night’s dinner, several leaders made emotional interventions. The Italian prime minister Giuseppe Conte warned Rutte that hero status at home would “last a few days” but that he risked being blamed for letting Europe down.
The summit had been markedly bad-tempered from the first day on Friday, and Michel was forced to table a new set of proposals on Saturday morning in an attempt to reboot the talks.
Michel had looked to trim €50bn off the amount of grants and to give a member state the power to hold up the disbursement of funds by making a “request within three days … to bring the matter without delay, to the European council or [finance ministers] to satisfactorily address the matter”.
Macron told reporters of his concerns about attempts to reduce the size of the recovery package, insisting there would not be a deal “made at the cost of European ambition”. Merkel had warned there was no guarantee of success.
A second meeting has been pencilled in for the last week of July but there are concerns that a second wave of coronavirus infections could stand in the way.