BRUSSELS: Squabbling EU leaders held a make-or-break dinner on Sunday (Jul 19) to try to break three days of deadlock in talks over a huge coronavirus rescue package.
EU Council President Charles Michel, the summit host, gathered the 27 leaders for dinner after a day of small group meetings that failed to yield a major breakthrough in the search for a deal.
He made a last-ditch proposal for the €750 billion (US$860 billion) rescue deal aimed at bridging a gaping rift with a coalition of “Frugals” – the Netherlands, Sweden, Austria, Denmark and Finland.
The Frugals, led by Dutch Prime Minister Mark Rutte, have sought to slash the scale of the package of loans and grants that Brussels wants to help the countries hit hard by the epidemic.
As fears rose that the summit would collapse without agreement, Michel suggested cutting the grant portion of the deal to €400 billion – down from his initial proposal of 500 billion – and raising the loan part to 350 billion, up from 250 billion.
In a heartfelt speech over dinner, Michel reminded leaders of the devastating human cost of the pandemic – 600,000 dead including 200,000 in Europe – and urged them to come together to complete a “mission impossible”.
“The question is this: are the 27 leaders, responsible for the people of Europe, capable of building European unity and trust?” Michel said, according to a copy of his remarks seen by AFP.
“Or will we present the face of a weak Europe, undermined by mistrust?”
But a senior aide to Swedish Prime Minister Stefan Lofven said they were only prepared to accept a maximum of €350 billion as grants in the package, and even this was subject to conditions.
“It’s about the rebates, higher climate ambitions, and that we include a mechanism that makes so that countries will not be able to get money from the EU budget or this recovery package if they do not follow the principles of rule of law,” Paula Carvalho Olovsson told the TT news agency.
At the start of what she said was probably the “decisive” third day of the extraordinary summit, German Chancellor Angela Merkel had said there were still many divisions among the leaders, and so it proved.
The leaders sat down to their dinner around 7:20pm, more than seven hours after they had been scheduled to restart their full round-table meeting of all 27.
Round after round of small group meetings went on all day as Michel, aided by Merkel and French President Emmanuel Macron, tried to drag the frugals and the more indebted – and virus-ravaged – on board for a compromise, but progress was painfully slow.
A European source said there were fresh clashes over the dinner table, as the frugals demanded massive hikes in the rebates they get on their EU contributions.
Rutte also wants member states to retain the right to veto national economic plans by the likes of Italy and Spain, in order to oblige them to pursue reforms to borrowing and their labour and pensions markets – an effort that was angrily resisted by his Italian counterpart, Giuseppe Conte.
RULE OF LAW ROW
Meanwhile, another stumbling block emerged when Hungary’s hardline premier Viktor Orban accused Rutte of waging a personal vendetta against him and his country – and vowed to prevent any agreement on efforts to tie EU spending to recipient countries’ respect for EU standards.
The so-called “Rule of Law” measure – also opposed by Poland and Slovenia – could see Orban’s nationalist and increasingly authoritarian government lose out if fellow members judge his alleged assault on the free media and democratic norms breaks with European values.
Both issues could thwart attempts to reach agreement at the summit, and that is even before the leaders – who began meeting on Friday and have finished after midnight for two nights running – get on to debating the draft of the seven-year, trillion-euro EU budget.
Macron urged leaders to “take responsibility” as Europe grapples with a severe recession caused by the virus and its lockdowns, saying a deal could still be found, “but these compromises cannot be made at the cost of European ambition”.