July 20 (UPI) — EU leaders will continue a fourth day of talks in Brussels after a weekend of intense negotiations failed to reach an agreement on a recovery fund. The latest package being considered by the leaders includes 390 billion euros to be distributed to member states in the form of grants, which will be raised by the European Commission in the name of the Entire European Union, officials said. A spokesman for the European Council said the meeting would resume in Brussels at 2 p.m.
The European Union’s efforts to agree on a 750 billion euro ($856 billion) stimulus package appeared to be in trouble late Sunday, Bloomberg reported. Leaders have failed to bridge their differences over how much the Recovery Fund allocates separately through grants and low-interest loans.
European Council President Charles Michel has proposed a new proposal to reduce the size of the grant from an initial 500 billion euros to 400 billion euros, according to people familiar with the discussions. Dutch Prime Minister Luterte and Austrian Prime Minister Viktor Kurz rejected the new proposal, insisting on a commitment to limit the grant to 350 billion euros.
Officials, who asked not to be named because negotiations were ongoing, said Denmark, Sweden and Finland, which had initially aligned themwith with the Dutch and Austrian prime ministers, had no objection to the amount of the grant in Michel’s latest proposal.
With the support of most member states, Germany and France insist that at least 400 billion euros of the package must be granted in the form of grants to protect southern Europe’s fragile economies from the worst of the new crown.
“Europe is being blackmailed,” Italian Prime Minister Giuseppe Conte said on Sunday, adding that frustration at the Dutch-led camp was beginning to grow.
Although no consensus could be reached on the size of the stimulus package, the talks continued into the evening.
In recent weeks, as investors have raised expectations of an agreement, as a series of vocal statements from all sides have led to pressure on leaders to resolve their differences before financial markets open. But since the talks began on Friday morning, leaders have largely been on the same sheet, struggling to cross the old-fashioned fault lines between northern Europe and the outbreak-hit southern European countries.
“Ideally, the agreement should be ambitious in size and composition, basically in line with the commission’s proposals,” EUROPEAN Central Bank President Christine Lagarde said in response to questions from Reuters. “It’s better to have an ambitious agreement, even if it takes a little longer.”
Dutch Prime Minister Matteo Dijsser and his allies are trying to reduce the size of grants in the Recovery Fund, which is crucial to improving the fiscal position in heavily indebted southern European countries. While the atmosphere on Saturday was better and more constructive than when they met on Friday, it was hard to see how much progress had been made.
“At the moment, we see the Committee, the President of the Council and most of the member states trying to move closer to the four countries,” said Portuguese Prime Minister Kosta. “These countries have to do their part.”
EU hardliners are prepared to accept a 390 billion euro grant from the Recovery Fund.
BEIJING, July 20 (Xinhua) — The four EU member states that have deadlocked negotiations on the EU’s massive stimulus package are ready to agree to a key part of the plan, two officials said. The stimulus package is aimed at restarting the region’s economy.
Officials said that after overnight consultations, the Netherlands, Austria, Denmark and Sweden were satisfied with the 390 billion euros ($450 billion) in grants from the recovery fund and the rest in the form of low-interest loans. The officials spoke on condition of anonymity because of the content of the private conversation.
The EU’s 27 leaders will meet again at 4 p.m. to resolve outstanding issues such as the overall size of the fund and the mechanism spent to control it. A French official said his delegation now saw the way to a comprehensive consensus.
“Tough negotiations have just ended,” Austrian Chancellor Viktor Kurz tweeted. “We can be very pleased with today’s results. This afternoon will continue. “
After a series of well-spoken statements in recent weeks, investors are already expected to reach an agreement, so leaders are under intense pressure to bridge their differences. Discussions have been intense at times, with several officials saying the whole negotiations were on the verge of collapse at Sunday’s dinner as the fault line between the wealthier Nordic countries and the southern countries most affected by the coronavirus re-emerged.
“There were a few moments tonight and things didn’t look good, but when it took that to think we’ve made progress, ” Dutch Prime Minister Rutte said.
“If there is reform, and if it can be implemented, we are willing to move from loans to subsidies,” he added. “There’s a good text in this area, and my impression is that it has consensus support.”
Mr Rutte and his allies have been working to reduce grants that the heavily indebted southern countries see as essential to strengthening their finances. The European Commission’s original proposal included a grant of 500 billion euros.
The overall package under discussion is worth about 1.8 trillion euros. More than 1 trillion euros will be disbursed in grants from the EU’s regular budget, with an additional 750 billion euros spent on emergency stimulus programmes. Germany contributes the most to the EU’s budget.
Nearly a third of this total will have to be spent on projects to transform the EU into a low-carbon economy. Spending inconsistent with the Paris climate change agreement will not be approved, so the potential deal is expected to be the largest green stimulus package in the world’s history.