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EU Proposes $858 Billion Stimulus With $446 Billion in Grants

President of the European Council Charles Michel (L), Germany's Chancellor Angela Merkel (C), France's President Emmanuel Macron (2 nd R) and President of the European Commission Ursula von der Leyen talks during a bilateral meeting at the EU summit on a coronavirus recovery package at the European Council building in Brussels on July 19, 2020 Photographer: Francois Walschaerts/AFP/Getty Images
By Bloomberg
20 Jul 2020
0

European Union leaders were given a new compromise proposal for a 750 billion-euro ($858 billion) economic recovery fund as negotiations continued through a fourth day.

European Council President Charles Michel distributed the latest plan on Monday, which would include 390 billion euros of grants, down from an initial 500 billion euros, and 360 billion euros of low-interest loans, according to a copy of the proposal seen by Bloomberg.The new plan seeks to break an impasse between fiscal conservatives in northern Europe and a majority who want decisive action to help the southern nations hardest hit by the coronavirus pandemic. If they can reach a deal, it would mark an unprecedented deepening of financial integration for the bloc.A handful of fiscal hawks led by Dutch Prime Minister Mark Rutte have been pushing to reduce the total size of the stimulus package and to impose strict constraints on how it can be used.While officials from all sides have suggested the new volume of grants would be acceptable, it’s unclear whether other aspects of the the latest compromise would be met with consensus, including on issues to do with climate and the rule of law.

Leaders have been warning that an accord is far from a given, though they have been sounding cautiously optimistic over the past few hours. All 27 member states need to agree before the plan can move forward.

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