Two days were not enough for the EU Council to reach an agreement on the Recovery Fund, so much so that after yet another night of negotiations the summit was adjourned to 16pm on Monday 20 July. At the extremes are the positions of the Northern European countries, the so-called Frugal ones (Benlux, Sweden, Austria, Denmark) which the Dutchman Mark Rutte represents with considerable intransigence, and those of the Southern countries (including the Franco-German bloc) embodied by the position by Giuseppe Conte. We are discussing how to distribute the 750 billion of the Recovery Fund. But the toughest battle took place over the question of veto power: whether to leave it to individual countries or to entrust it to an institution (such as Ecofin) . Things were further complicated by the lunge of Ausrtia which asked for a cut of 150 billion on the share of the grants (the so-called indemnities), also infuriating Merkel and Macron.
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In the confrontation, the president of the EU Council Charles Michel tried to find a way out, who presented one compromise proposal that took into account the various needs at the table: a reduction of 50 billion on subsidies for the benefit of loans (which therefore fall to 450 billion in grants and 300 of loans), the introduction of an "emergency brake" which allows countries to report a controversial use of subsidies to the European Council or Ecofin within three days and a modest increase to alarm, the discounts on contributions from Austria, the Netherlands, Denmark and Sweden.
"Today we will continue because we have to do everything to close. Postponing this match does not help anyone ”, is the comment by Giuseppe Conte at the end of the second day of work of the European Council on the Recovery Fund. Nothing done? “Absolutely yes: the game is still open. There are specific points on which we are also discussing animatedly”, is the photo taken by Conte at the end of the long and difficult day of meetings.
Leaders' meetings resume at 12 noon on Sunday 19 July.
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The third day of the EU Council opened with a postponement of the plenary session to 27 and numerous bi- or multilateral summits, in an attempt to unblock the confrontation engaged by Holland and its premier Mark Rutte, supported by Frugal Countries (Austria in head).
It started with a limited meeting between the president of the European Council, Charles Michel, the German chancellor, Angela Merkel, the French president, Emmanuel Macron and the president of the EU Commission Ursula von der Leyen. This was followed by a meeting between the German Chancellor Angela Merkel, the Italian premier Giuseppe Conte, the French president Emmanuel Macron, the Spanish prime minister Pedro Sanchez, the president of the European Commission Ursula von der Leyen.
Hungarian Prime Minister Victor Orban sided with Italy during a press conference. “When we started the summit there were several dozen open questions, but now there are only four left. And I think there is a good chance of reaching an agreement", he added. “The Netherlands would like to create a mechanism to control the spending of southern countries from the Recovery Fund. Basically it is a dispute between the Italians and the Dutch. We are on Italy's side”. “We need to give the money to countries that need it and allow them to spend it as soon as possible to stabilize their economies, instead of engaging in lengthy bureaucratic disputes – he added -. If we help them at the right time, we help them twice."
The day continued between mini-summits without being able to make progress and with harsh exchanges of accusations between Rutte and Conte. Shortly after 19 pm, the Frugal group, on the initiative of Finland, made a final offer of 350 billion in grants for the Recovery Fund, to be doubled with an equal amount of loans. For a total of 700 billion against the initial 750 of the EU Commission. Provided that the issue of governance and rebates is resolved.
However, the positions remain distant because the other countries do not seem to be willing to go below 400 billion in aid, which they consider the minimum acceptable threshold. The summit resumed in plenary at !9,30 and will probably last all night.
Updated at 07hrs Monday 00th July 20
