The 27 EU approve a stimulus plan in history at the end of a summit marathon

Les 27 de l’UE approuvent un plan de relance historique au terme d’un sommet marathon

It took four days and four nights and multiple barneys, but the 27 european leaders were found Tuesday an agreement on a historical level and is intended to support their economies hit by the crisis of the coronavirus, based for the first time on a joint debt.

“Deal!”, announced in English the Belgian French-speaking Charles Michel, president of the european council, on his Twitter account. “Historic day for Europe!”, has ensured in the wake of the president Emmanuel Macron on the same channel.

“We have an agreement. And a good deal ! With a budget 2021-2027 of 1.074 billion and a fiscal stimulus package of 750 billion, and never the european Union had decided to invest so ambitious in the future”, explained the First belgian minister Sophie Wilmes.

At the end of a fierce battle between the so-called “frugal” and the franco-German couple, a compromise was finally reached at a special summit started started Friday.

To support the european economy which is facing an historic recession, the plan provides for a fund of 750 billion euros, which will be borrowed by the Commission on the markets. It is broken down into 390 billion of subsidies that will be allocated to the States hit hardest by the pandemic. This will be the common debt to repay the 27.

This issuance of common debt, a first, is based on a franco-German proposal, which aroused fierce opposition on the part of the so-called “frugal” (the netherlands, Austria, Denmark, and Sweden) joined by Finland.

In addition to these subsidies, of € 360 billion will be made available for loans, to be repaid by the applicant country. The plan is backed by the long-term budget of the EU (2021-2027), which provides for an allocation of 1.074 billion euros, or $ 154 billion euros per year.

On several occasions the country, “frugal”, taxed by some of the “stingy”, have threatened to disrupt this massive plan to support the economy, which would benefit primarily the countries of the South such as Italy and Spain. Those countries most affected by the epidemic are also considered to be considered to be too lax in budgetary matters by their partners in the North.

To overcome their reluctance, the european Council president, Charles Michel, has had to revise its initial proposal and provide them collateral.

Gages

In particular, by revising downward the 500 billion of subsidies provided from the outset and defended by Berlin and Paris.

But also by increasing substantial discounts to these countries, who see their net contributions to the EU budget to be disproportionate. The correction granted to Germany remains stable.

Compared to the original proposal of Charles Michel, the increases the rebates range from 22% for the netherlands to 138% for Austria.

The Dutch Prime minister Mark Rutte, the more difficult to convince, had recognized that progress had been made in his direction.

“For the first time in european history, the budget is linked to climate objectives, for the first time, respect for the rule of law becomes a condition for the granting of funds,” said Charles Michel.

This conditionality is met with a strong opposition of Poland and Hungary, two countries in the crosshairs of the european Commission and european Parliament who have initiated a procedure against them for violations of the rule of law.

Viktor Orban, who had posed threats of a veto at the summit, has called for the end of this procedure, so-called “article 7” against his country, which can in theory lead to sanctions.

The Hungarian press pro-Orban hailed a “great victory”.

The sources of tension have not been lacking during the summit marathon. Emmanuel Macron has notably raised the tone to denounce the lack of will and the “inconsistencies” of frugal.

But the summit was also the occasion of a stimulus spectacular of the franco-German couple, after months of impatience and frustration on one another, and at the same time the european project, undermined by the crisis of the Covid-19.

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