European Union leaders clinched an "historic" deal on a massive stimulus plan for their coronavirus-throttled economies in the early hours of Tuesd
European Union leaders clinched an “historic” deal on a massive stimulus plan for their coronavirus-throttled economies in the early hours of Tuesday, after a fractious summit that lasted almost five days. French President Emmanuel Macron, who spearheaded a push for the deal with German Chancellor Angela Merkel, hailed it as “truly historic”. Speaking at a joint press conference with the German leader after the summit, the French President appeared to backtrack on his criticism of the so-called frugal four who opposed many elements of the original budget proposals.
He said: “There are different views, there are different traditions and different environments from where people come.
“It’s natural. It means we have to work harder to come to more convergence.
“That’s been at the heart of the European Union of the past few decades. We have not been able to actually bring this to an end also with regards to the fiscal union, we have not been able to achieve that.
“On the frugal four, the fact that they are important net contributors and that there are certain political situations with coalition governments in those countries and that they obviously have to be held accountable by their parliaments, a very important aspect to this respect.
“The risk that we run here is that we may well do the populists in those countries a favour.
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“So what was important was for these neighbour countries to convince them to come along.
“France doesn’t have this kind of system but so many countries have that so we have to help each other to try and convince each other’s public of the validity of our points.
“That was part of this dynamism and this debate but there are many divergences still.”
The agreement paves the way for the European Commission, the EU’s executive, to raise billions of euros on capital markets on behalf of all 27 states, an unprecedented act of solidarity in almost seven decades of European integration.
Summit chairman Charles Michel called the accord, reached at a 5.15 a.m. (0315 GMT), “a pivotal moment” for Europe.
Many had warned that a failed summit amid the coronavirus pandemic would have put the bloc’s viability in serious doubt after years of economic crisis and Britain’s recent departure.
News of the deal in Brussels saw the euro rise to a fresh four-month high of 0.9 sterling.
“This agreement sends a concrete signal that Europe is a force for action,” a jubilant Michel told a news conference.
Leaders hope the 750billion euro (£675.75billion) recovery fund and its related 1.1 trillion euro 2021-2017 budget will help repair the continent’s deepest recession since World War Two after the coronavirus outbreak shut down economies.
But in an unwieldy club of 27, each with a veto power, the summit also exposed faultlines across the bloc that are likely to hinder future decision-making on money as richer northern countries resisted helping out the poorer south.
The Netherlands led a group of ‘frugal’ states with Austria, Sweden, Denmark and Finland, insisted that aid to Italy, Spain and other Mediterranean countries that took the brunt of the pandemic should be mainly in loans, not in non-repayable grants.
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“There were a few clashes, but that’s all part of the game,” said Dutch Prime Minister Mark Rutte, describing a “warm” relationship with his Italian counterpart Giuseppe Conte.
But Austrian Chancellor Sebastian Kurz said the frugals’ negotiating power was here to stay, suggesting Europe’s traditional Franco-German engine will face challenges from smaller states banding together.
Frictions peaked on Sunday night as Macron lost his temper with the ‘frugals’, diplomats said, and Polish Prime Minister Mateusz Morawiecki branded them “stingy, egotistic states”.
The bickering spun the summit out, making it the EU’s second-ever longest, just 20 minutes short of a record set in 2000 in Nice, according to Rutte. “We would have broken the record at 6:05, but we ended at 5.45,” he said.
Under the compromise, the Commission will borrow 750 billion euros using its triple-A debt rating, disbursing 390 billion in grants – less than the originally targeted 500 billion – and 360 billion in cheap loans.