Newsdeck

COVID-19

EU leaders show first signs of compromise on stimulus plan

EU leaders show first signs of compromise on stimulus plan
epa08556380 Spanish Prime Minister Pedro Sanchez arrives for the fourth day of the European Council meeting in Brussels, Belgium, 20 July 2020. European Union nations leaders meet face-to-face for a fourth day to discuss plans responding to coronavirus crisis and new long-term EU budget. EPA-EFE/FRANCISCO SECO / POOL

BRUSSELS, July 20 (Reuters) - Signs emerged that leaders of northern European Union countries were willing to compromise on a 1.8 trillion euro ($2 trillion) coronavirus stimulus plan on Monday as talks in Brussels extended to a fourth day.

Divided and slow to respond at the start of the coronavirus outbreak in Europe, EU leaders believe they now have a chance to redeem themselves with an aid plan that would show Europeans the bloc can react to a crisis.

But old grievances between countries less affected by the pandemic and the indebted countries of Italy and Greece, whose economies are in freefall, have resurfaced, pitting Rome against The Hague and its allies in Stockholm, Copenhagen and Vienna.

With leaders not expected to restart until 1400 GMT, much rested on European Council President Charles Michel’s efforts to present a new basis for a deal, taking into account the competing demands of north and southern Europe.

“An agreement is a necessity”, French Finance Minister Bruno Le Maire told French BFM TV on Monday as weary diplomats slept or prepared for another day in what could be the longest-ever EU summit.

In the small hours of Monday, French President Emmanuel Macron lost patience with the “sterile blockages” of the Netherlands, Sweden, Denmark and Austria, later joined by Finland, banging his fist on the table, one diplomat said.

A second diplomat confirmed the outburst, saying tensions rose until Belgium’s Prime Minister Sophie Wilmes called for calm.

Michel had earlier urged the 27 leaders to achieve “mission impossible”, reminding them that more than 600,000 people had now died from COVID-19 around the world. The EU must stand together, he said.

That appeared to edge towards a potential breakthrough.

Within the 750 billion euro recovery fund, 390 billion euros could be considered as non-repayable grants, diplomats said, a compromise between the 350 billion level of the five “frugals” and the 400 billion euros demanded by France and Germany.

There was no immediate clarity on whether a deal was in the making, but Austrian Chancellor Sebastian Kurz told ORF radio he was satisfied with the negotiations. He also praised the blocking minority tactics.

“It was definitely the best decision that the group of the frugals…has been formed,” Kurz said. “There were the four of us, now there are five of us. These are all small countries, which alone would have no weight at all.”

ECB CALLS FOR AMBITION

Issues over tying payouts to economic and democratic reforms were still to be resolved, however.

“We are not there yet, things can still fall apart. But it looks a bit more hopeful than at the times were I thought last night that it was over,” Dutch Prime Minister Mark Rutte said.

European Central Bank (ECB) President Christine Lagarde cautioned against a quick deal at any cost.

“Ideally, the leaders’ agreement should be ambitious in terms of size and composition of the package…even if it takes a bit more time,” she told Reuters.

Lagarde’s comments suggested she was relaxed about any adverse reaction on financial markets if the summit fails, especially as the ECB has a 1 trillion euro-plus war chest to buy up government debt.

News of the EU impasse had little impact on the euro in early Asian trade.

“I think expectations were that we weren’t going to get a deal at this meeting anyway, but we needed enough in it to give us a belief that there was one coming in August or September,” said Chris Weston, head of research at Pepperstone brokerage in Melbourne, Australia. ($1 = 0.87 euros)

(Additional reporting by Reuters bureaus; Editing by Angus MacSwan)

Gallery

"Information pertaining to Covid-19, vaccines, how to control the spread of the virus and potential treatments is ever-changing. Under the South African Disaster Management Act Regulation 11(5)(c) it is prohibited to publish information through any medium with the intention to deceive people on government measures to address COVID-19. We are therefore disabling the comment section on this article in order to protect both the commenting member and ourselves from potential liability. Should you have additional information that you think we should know, please email [email protected]"

Please peer review 3 community comments before your comment can be posted

A South African Hero: You

There’s a 99.7% chance that this isn’t for you. Only 0.3% of our readers have responded to this call for action.

Those 0.3% of our readers are our hidden heroes, who are fuelling our work and impacting the lives of every South African in doing so. They’re the people who contribute to keep Daily Maverick free for all, including you.

The equation is quite simple: the more members we have, the more reporting and investigations we can do, and the greater the impact on the country.

Be part of that 0.3%. Be a Maverick. Be a Maverick Insider.

Support Daily Maverick→
Payment options

MavericKids vol 3

How can a child learn to read if they don't have a book?

81% of South African children aged 10 can't read for meaning. You can help by pre-ordering a copy of MavericKids.

For every copy sold we will donate a copy to Gift of The Givers for children in need of reading support.