EU: day “decisive” on the stimulus package, a failure is still possible

UE: journée «décisive» sur le plan de relance, un échec reste possible

Brussels | The German chancellor Angela Merkel did not rule out on Sunday the risk of a failure in the negotiations on a recovery plan post-coronavirus massif, on the third day of a european summit focused on Brussels, where the 27 appear to be deeply divided.

“There are a lot of good will (…) but it is also possible that no results would be achieved today,” said Ms. Merkel upon his arrival at the summit for one day as she was described as a “decisive”.

“I still can’t tell if a solution will be found,” insisted Mrs. Merkel, whose country ensures the rotating presidency of the Union.

The French president Emmanuel Macron, who defends this plan alongside the German, has warned that the “compromise” could not do “for the price of european ambition”.

In spite of the “strife”, an agreement is still “possible”, he however estimated.

Ms. Merkel and Mr. Macron were found at 9: 30 a.m. (7: 30 GMT) the european Council president, Charles Michel, leader of the orchestra at the peak, to decide the procedure to be followed, after 48 hours of discussions which were not allowed to bend the netherlands and their allies “frugal” (Denmark, Sweden and Austria, and Finland), very reserved on this project.

“Ultimatum”

The 27 EU leaders will meet next at noon (10 am GMT), to continue to discuss the recovery plan, made all the more urgent that Europe faces a historic recession.

On the table of negotiations, a fund established by a borrowing capacity of € 750 billion to revive the european economy, backed by the long-term budget of the EU (2021-2027) of 1074 billion euros. The unanimity of the 27 member States is required, a compromise is particularly difficult.

After a dinner Saturday, Charles Michel has met the French president, the German chancellor, the leaders of the four “frugal”, which joined that of Finland.

“This meeting has been very hard”, indicated to the AFP the two european sources. After several attempts to compromise, Ms. Merkel and Mr. Macron had left the meeting for an interview in their hotel with the Italian leader Giuseppe Conte, according to a diplomatic source.

They were waiting not to be “frugal” in their direction, which did not come: in front of journalists, the Dutch prime minister Mark Rutte said, “we have not heard of ultimatum”.

On Saturday, Mr Michel had made a revised proposal to try to lift the reservations on the recovery plan. It should make a new one on Sunday.

One of the options on the table is to change the balance between grants and loans, increasing the share of the first $ 300 billion (compared to 250 in the initial proposal) without reducing the share of subsidies directly earmarked to the States to sustain their fiscal stimulus plans.

The “frugal” clearly prefer loans to grants. But Paris and Berlin refuse to grant less than $ 400 billion.

The right of veto

Charles Michel has also proposed a mechanism allowing a country that would have some reservations on the plan of reforms submitted by another State in order to obtain such aid, to open a debate to 27, or in front of the european Council (that is to say, the executive), either in front of the Finance ministers of the EU.

A response to the wish of Mr. Rutte to see these national plans validated by the 27 unanimously, which would provide a de facto veto to any capital city.

The country’s “frugal” is reproached by their neighbours to the South, a soft budget constraints and the lack of competitiveness of their economy.

But these urgings of reforms concerned about Rome and Madrid, who fear they may be subject to a programme of reforms (labour market, pensions…) imposed, such as Greece in the past.

Another boost of Charles Michel for overcoming resistance: expand some “discount” granted to the countries that pay more money to the EU budget than they receive.

This would be the case for Vienna, Copenhagen and Stockholm, but not The Hague or Berlin that the discount remain unchanged.

In addition to these touchy subjects, others promise to weigh in on the discussions, in particular the issue of linking the disbursement of european aid to the respect of the rule of law, that cringe Budapest and Warsaw.

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