EU leaders strike 'historic' €1.82 trillion deal to rebuild Europe's economy after coronavirus

EU leaders have reached a historic agreement on a €750bn coronavirus pandemic recovery fund and their long-term spending plans following days of acrimonious debate at the bloc’s longest summit in nearly two decades.

French president Emmanuel Macron called it an “historic day for Europe”.

European Council president Charles Michel called it a “good deal”, stating that “Europe is solid”.

It comes after days of sometimes bitter discussions over the seven-year budget and recovery package which includes jointly borrowing a €750 billion recovery fund to be shared as grants and loans.

The leaders reached agreement early on Tuesday after more than 90 hours of talks.

The recovery plan includes €390 billion worth of grants and €360 billion worth of loans due to a compromise with the so-called frugal four, now five, countries — Netherlands, Austria, Finland, Sweden and Denmark.

Leaders also agreed a new EU budget of nearly €1.1 trillion ($1.3 trillion) for 2021-2027, creating combined spending power of about €1.8 trillion ($2 trillion).

The package will allow members to maintain spending in the aftermath of lockdowns that badly affected public finances.

It includes checks that the funds will not be misused. Recipients will have to submit spending plans to the European Commission, and a majority of states will be able to block projects.

Tempers were often frayed during the negotiations. The “frugal four”, Sweden, Denmark, Austria and the Netherlands, along with Finland had opposed extending €500bn in grants after the group originally set €375bn as the limit.

According to sources, French President Emmanuel Macron reportedly banged his fists on the table, as he told the “frugal four” they were putting the European project in danger.

Other members, such as Spain and Italy, did not want to go below €400bn in grant extensions.

The €390bn figure was suggested as a compromise, and “frugal” nations were reportedly won over by the promise of rebates on their EU budget contributions.

European Commission President Ursula von der Leyen tweeted. “Today we’ve taken a historic step, we all can be proud of. But other important steps remain. First and most important: to gain the support of the European Parliament. Nobody should take our European Union for granted.”

Dutch Prime Minister Mark Rutte, who led the “frugal group”, welcomed the agreement, but acknowledged the fractious nature of the talks. “We are all professionals, we can take a few punches,” he told reporters.

 


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