EU leaders debate endlessly to bring virus recovery package to fruition

EU leaders debate their highly awaited economic recovery plan against the coronavirus pandemic and the affiliated economic woes, but struggle to find common ground.

EU leaders summit

Squabbling EU leaders held round after round of group discussions on Sunday as they struggled to find enough common ground to justify re-opening negotiations on the third day of a summit to save a huge coronavirus rescue package.

The main summit roundtable session between EU leaders had been slated to start at noon, after Saturday’s broke up without agreement, but six hours later no time had been announced for the 27 to get back together and break the logjam.

Bitterness and division in the EU

As deadlines came and went, a European diplomat told that if the talks failed, the summit would be adjourned until August, throwing the German EU presidency’s timetable to agree a virus plan and a long-term EU budget into disarray — and underlining bitter divides.

Read more: Opposition by the ‘frugals’: EU chiefs try to negotiate virus recovery fund

“The time for a deal has come,” declared Belgium’s Prime Minister Sophie Wilmes.

At the start of what she said was probably the “decisive” third day of the extraordinary summit, German Chancellor Angela Merkel had said there were still many divisions among the leaders, and so it proved.

Rule of law measures may sideline smaller countries 

Dutch Prime Minister Mark Rutte led a coalition of “Frugals” — the Netherlands, Sweden, Austria, Denmark and now Finland —  in a crusade to slash back the scale of the proposed 750-billion-euro package of loans and grants that Brussels wants to help the countries hit hard by the epidemic.

Rutte also wants member states to retain the right to veto national economic plans by the likes of Italy and Spain, in order to oblige them to pursue reforms to borrowing and their labour and pensions markets — an effort that was angrily resisted by his Italian counterpart Giuseppe Conte.

Meanwhile, another possible stumbling block emerged when Hungary’s hardline premier Viktor Orban accused Rutte of waging a personal vendetta against him and his country — and vowed to prevent any agreement on efforts to tie EU spending to recipient countries’ respect for EU standards.

Read more: Coronavirus cases accelerate: US under siege, EU and others ease quarantine

The so-called “Rule of Law” measure — also opposed by Poland and Slovenia — could see Orban’s nationalist and increasingly authoritarian government lose out if fellow members judge his alleged assault on the free media and democratic norms breaks with European values.

Both issues could thwart attempts to reach agreement at the summit, and that is even before the leaders — who began meeting on Friday and have finished after midnight for two nights running — get on to debating the draft of the seven-year, trillion-euro EU budget.

Is the deal even possible?

France’s President Emmanuel Macron and Germany’s Chancellor Angela Merkel have joined summit host and European Council president Charles Michel in trying to drag the frugals and the more indebted — and virus-ravaged — on board for a compromise, but talks have stumbled.

Read more: East Asia’s victory against coronavirus has lessons for all

Macron urged leaders to “take responsibility” as Europe grapples with a severe recession caused by the virus and its lockdowns, saying a deal could still be found, “but these compromises cannot be made at the cost of European ambition”.

After his officials worked through the night, Michel came up with a new proposal, and a diplomatic source indicated that a compromise might be found by cutting grants in the scheme from an initial suggestion of 500 billion euros down to 400 billion euros ($460 billion).

But a Spanish diplomatic source said that the two sides were so far apart that they were not even discussing details.

Read more: ECB reticent as EU drafts pandemic recovery plan

The full round-table gathering of all 27 leaders, supposed to begin at noon (1000 GMT), was pushed back to at least 4.00 pm, and then 5:30 pm and then to some point in the evening, to give time for small group meetings in search of compromises.

“At this stage it’s not about weighing up one proposal or another but working out whether it’s realistically possible to reach a deal,” the Spanish source said.

Highlighting the febrile atmosphere, Italian Prime Minister Giuseppe Conte sent a tweet bluntly spelling out what he saw as the weight of numbers against Rutte and his allies.

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“On the one hand, the overwhelming majority of countries — including the largest Germany, France, Spain, Italy — defending the European institutions and the European project, and on the other, a few so-called ‘frugal’ countries,” Conte wrote.

AFP with additional input by GVS News Desk

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