Un cut of at least 100 billion in non-repayable transfers, which would thus drop from 500 to 400, bringing the total value of the plan from 750 to 650 billion euros. This is the hypothesis that is making its way to find an agreement on the Recovery Fund, which will be discussed at the European Council on Friday and Saturday in Brussels, the first in attendance since the pandemic broke out. An extraordinary Council which will see the 27 heads of government gathered in a 300-seat room, for the first time since the end of the lockdown and which will have to examine two dossiers of colossal value for the financial commitment: yes, the 750 billion of the Funds for the relaunch but also the 1.150 billion of the seven-year European budget. But beyond the financial element, the strategic scope of the package for the very future of Europe is clear.
German Chancellor Angela Merkel, current president of the Union, would like to close the negotiations as soon as possible, but the risk that this weekend's summit will not be decisive is high, because the 100 billion cut it may not be enough for the four Frugals (Netherlands, Austria, Denmark and Sweden). The most intransigent remains Dutch premier Mark Rutte, who continues to battle on various aspects of the plan.
First, the Hague continues to argue that money should only be transferred to governments in the form of loans and only in exchange for “harsh conditionalities”, or guarantees on the structural reforms that each country must undertake to implement.
On this front, Rutte's claims also affect governance. For the approval of the national reform plans (Pnr), which define how governments intend to spend European aid, to Holland qualified majority voting is not enough proposed by the President of the European Council, Charles Michel. According to The Hague, the members of the Union should express themselves unanimously, so that each country has veto power on the reforms designed by others. Such a level of interference has never been seen in the history of the EU and for many countries – starting with Italy – it would be unacceptable. The request therefore does not have much hope of being satisfied: it is likely that Rutte will insist on this point only to up the ante in the negotiation.
On the other hand, at this point Conte's request also risks being rejected, who would like to bring the decisions on the PNR back to the Commission (as envisaged in the original plan). In fact, Michel's proposal is halfway between the demands of Italy and the Netherlands, allowing the countries to reject the reform programs of their partners, but only if united in blocking majorities. Merkel has already expressed herself in favor of this solution, choosing however to use the conditional: "I could approve it", said the chancellor on 13 July, at the end of the bilateral with Conte.
But the draft agreement signed by Michel – which will form the starting point of the negotiations on Friday – does not only speak of governance. The text also provides for maintaining the initial financial endowment of 750 billion (500 non-repayable plus 250 in loans), plus some concessions to the Frugals: an endowment for the 2021-2027 EU budget of 26 billion less than that proposed by von der Leyen (at 1.074 billion) and the maintenance of rebates, i.e. the discounts granted to the Netherlands, Denmark, Sweden and Austria (but also to Germany) for the contribution to the EU budget.
In short, the summit promises to be uphill for the Italian premier, Giuseppe Conte, who this evening will see the French president, Emmanuel Macron, in Brussels for the last of the bilateral meetings organized in preparation for the EU Council. Just yesterday Macron met the Spanish premier Sanchez, who is also looking for alliances for a common position in view of the summit.
