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‘Deal’: EU agrees on post-pandemic recovery after marathon summit

The EU was slow to coordinate its initial response to the COVID-19 pandemic and, already weakened by Britain’s departure from the bloc, a united front on economic aid would demonstrate that it can step up to a crisis and stay united.

Dutch Prime Minister Mark Rutte, centre, gives the thumbs up as he speaks with French President Emmanuel Macron, right, and Irish Prime Minister Micheal Martin, left, at the Brussels summit on Tuesday.

Dutch Prime Minister Mark Rutte, centre, gives the thumbs up as he speaks with French President Emmanuel Macron, right, and Irish Prime Minister Micheal Martin, left, at the Brussels summit on Tuesday.Credit:AP

“It has been a long summit and a challenging summit but the prize is worth negotiating for,” Irish Prime Minister Micheal Martin said as the Brussels summit approached the record length set at a 2000 meeting in the French city of Nice of almost five full days.

European nations have done a better job of containing the coronavirus than the United States after a devastating early few months that hit Italy and Spain particularly hard, collaborating on medical, travel and economic fronts.

The European Central Bank has pumped unparalleled money into economies to keep them going, while capitals hammer out their recovery fund.

Diplomats said the leaders appeared to put aside the rancour that stood in the way of a compromise over hours of haggling through the weekend.

Emotions had run high at a dinner on Sunday as a group of fiscally frugal northern nations led by the Netherlands stood their ground on the level of free grants to be given away.

French President Emmanuel Macron said the conclusions were “truly historic”.

“We have put in place the capability to borrow collectively, to put in place a collective recovery plan, for the first time,” Macron said. “With this recovery plan, we will reach a near doubling of the European budget over the next three years.”

Macron had lost patience in the early hours of Monday, banging his fist on the table in frustration at “sterile blockages” by the “frugals”, two diplomats said.

Polish Prime Minister Mateusz Morawiecki also railed against the “frugals”, branding them “a group of stingy, egotistic states” that looked at things through the prism of their own interests.

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Poland would be a top beneficiary of the recovery package, receiving tens of billions of euros in grants and cheap loans, along with high-debt Mediterranean-rim countries that have taken the brunt of the pandemic in Europe.

But the rhetorical skirmishing faded on Monday, and the leaders homed in on an agreement on the stimulus package and, linked to it, the EU’s 2021-2027 common budget of around €1.1 trillion.

Hopes for a deal to help address Europe’s deepest recession since World War II sent Italy’s borrowing costs to their lowest since early March and pushed the euro to a 19-week high.

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Michel proposed that within the €750 billion fund, €390 billion should be non-repayable grants, down from €500 billion originally proposed, and the rest in repayable loans.

The Netherlands had pushed for a veto on aid for countries that backslide on economic reform, but diplomats said it was now willing to back a “stop-the-clock” mechanism by which member states could put a brake on disbursements for three months and have them reviewed.

Disbursements will also be linked to governments observing the rule of law. Hungary, backed by eurosceptic ally Poland, had threatened to veto the package if funds were made conditional on upholding democracy, but diplomats said a way forward on that was found.

Reuters

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