EU leaders in stalemate over billions to fund recovery
GERMANY, FRANCE INSIST THAT AT LEAST €400B SHOULD BE HANDED OUT
European Union leaders were pressuring Mark Rutte of the Netherlands and a handful of his supporters to drop their opposition to a massive economic stimulus programme as summit talks ran into a third day in Brussels yesterday.
Rutte and allies including Austria and Denmark met on the sidelines with their southern counterparts yesterday as they pushed for a breakthrough on the critical question of how much of the recovery fund will be available as grants rather than loans. The meeting broke up with no progress made, and both sides sticking to their entrenched positions, according to an Italian official familiar with the discussions.
‘Blackmailed’
Germany and France, with the backing of most of the bloc, are insistent that at least €400 billion ($460 billion) of the package must be handouts in order to shield the fragile economies of southern Europe from the worst effects of the coronavirus pandemic. Rutte and his fiscally conservative group say that figure must be substantially less, with some calling for the amount to be €350 billion, according to another official who asked not to be identified because the talks are private.
European Council President Charles Michel, who is running the summit, won’t produce another proposal for the 27 leaders to consider together until he has an informal agreement from the holdouts, a French diplomat said.
“Europe is being blackmailed” by the hawks, Italian Prime Minister Giuseppe Conte said Sunday in a statement released by his office.
With investors already pricing
27 leaders at summit to discuss bailout
in a deal after a series of bold announcements in recent weeks, leaders were under intense pressure to bridge their differences. Yet they were largely been going around in circles since talks began on Friday morning and as they struggled to bridge the familiar fault lines between the richer North and the southern countries worst affected by the pandemic.
“Ideally the agreement should be ambitious in terms of size and composition of the package, broadly along the lines of what has been proposed by the commission,” European Central Bank President Christine Lagarde said. “It is better to agree on an ambitious facility even if it takes a bit more time.”
With investors already pricing in a deal, leaders were under intense pressure to bridge their differences.