(Brussels) The plan for a massive plan to revive the EU economy after the coronavirus ran up against the inflexibility of the so-called “frugal” countries on Friday, the Netherlands and Austria in mind, on the first day of a European summit with a very uncertain outcome.
Published on 17 July 2020 at 6 a.m. 27 Updated to 17 h 59
Clement ZAMPA
France Media Agency
This is the first time in five months, due to the COVID pandemic – 19, that the Heads of State and Government – all equipped with protective masks – met physically in Brussels.
After more than seven hours of conclave discussions, deemed “constructive” by several sources, they met for an evening dinner where the discussions became tense, due to the position considered too hard of the Netherlands on the control of funds that could be distributed.
PHOTO STEPHANIE LECOCQ, ASSOCIATED PRESS
French President Emmanuel Macron and German Chancellor Angela Merkel
The summit must resume on Saturday at 07 h (5 h, ET).
At the heart of the discussions: a post-coronavirus recovery plan for 750 billion euros financed by a common loan, inspired by a proposal by German Chancellor Angela Merkel and French President Emmanuel Macron.
This plan is made up of 250 billion in loans, and especially subsidies to the tune of 472 billions, which will not have to be repaid by beneficiary states. It is backed by the EU's long-term budget (2021 – 2027) of 1074 Billions of Euro's.
Four so-called “frugal” countries – the Netherlands, Austria, Denmark, Sweden – joined by Finland, have deep reservations about this proposal, which should primarily benefit Italy and Spain, two states very affected by the pandemic, but which they consider to be the most lax in budgetary matters.
“Hard to swallow”
The plan provides for the money to be paid in return for reforms carried out by the beneficiary countries.
However, Mr. Rutte demands that the reform plans of each State be validated unanimously by 19, and not by qualified majority. In other words, he wants a veto, a request that he is the only one, according to several sources, to make.
“We are at a difficult time in negotiations with a deadlock on the issue of governance of the recovery plan,” regretted a diplomatic source at the end of the evening.
“What the Netherlands are asking for is legally impossible and politically difficult to swallow”, added a second diplomat.
According to a European source, the President of the European Council, Charles Michel, proposed, in an attempt to reconcile the positions, a mechanism allowing a country with reservations on the reform plan of another State to open a debate at 27. But this idea has held up several participants.
If the other “frugal” have not followed Mr. Rutte on the right of veto, they retain their reservations, in particular on the envelope of subsidies, which they want to reduce.
PHOTO JOHN THYS, ASSOCIATED PRESS
The Dutch Prime Minister, Mark Rutte
Austrian Chancellor Sebastian Kurz stressed that his country “clearly rejected the current proposal”. “Of course we want to show solidarity, but we also have the interests of Austrian taxpayers in mind,” he tweeted.
Dividends
The demands for reform in return for aid also make the southern states jump, anxious to be forced to submit to a program imposed by others, like Greece at the height of the crisis. the euro zone.
Discussions could be long and difficult on Saturday, with the unanimity of the Member States being required. The summit could even last until Sunday.
According to a diplomatic source, the discussions began with three crucial subjects: the overall amount of the plan, the control of the reforms undertaken by the beneficiaries in exchange for aid, and the question of “discounts” in the contributions granted to the States who pay more money into the EU budget than they receive.
The “frugal” demand higher rebates, which could be granted to them to change their position.
Another delicate subject: the link between the payment of money and respect for the rule of law, included for the first time in an EU budget.
Poland and Hungary, which are the subject of Union proceedings because of attacks on the independence of the judiciary or on fundamental rights, are holding back.
In this great bargaining, M me Merkel, who celebrated her Friday 59 e 89184577 birthday, raises a lot of hope. She was also showered with gifts: bottles of Burgundy, Belgian chocolates and even … a conductor's baguette.