Readers like you keep news free for everyone.

More than 5,000 readers have already pitched in to keep free access to The Journal.

For the price of one cup of coffee each week you can help keep paywalls away.

Support us today
Not now
Monday 2 October 2023 Dublin: 14°C
JOHN THYS Taoiseach Micheal Martin in Brussels.
# Brussels
'Frugals' holding out as EU leaders fail to agree on €750 billion rescue package after late-night talks
The leaders are gathering briefly this morning after spending the night negotiating in smaller groups.

DIVIDED EU LEADERS will meet again today to try and finalise the terms of a huge coronavirus economic rescue package after a night of tense haggling failed to yield a breakthrough.

After three days and three nights of talks, the 27 states still cannot settle on the exact size and rules of a €750 billion bundle of loans and grants to help drag Europe out of a recession caused by the pandemic.

The leaders are gathering briefly this morning after spending the night negotiating in smaller groups in pursuit of a deal.

Over a working dinner on last night, summit host and EU Council President Charles Michel made a fresh effort to win over the coalition of “Frugals” — the Netherlands, Sweden, Austria, Denmark and Finland — which has sought to cut the size of the package and impose strict rules on how it is used.

As fears grew that the summit would collapse without agreement, Michel suggested cutting the grant portion of the deal to €400 billion — down from his initial proposal of €500 billion — and raising the loan part to €350 billion, up from €250 billion.

But this was not enough for the Frugals, who insisted grants be cut to €350 billion and demanded big rises in the rebates they get on their EU contributions.

Testy exchanges

Tempers flared as frustration boiled over after a full weekend of haggling, with French President Emmanuel Macron upbraiding the Dutch and Austrian leaders for their intransigence and threatening a walkout.

The French leader banged the table and accused Dutch Prime Minister Mark Rutte of behaving like former British premier David Cameron — who took a hard line at EU summits but ended up leading his country into a referendum to quit the bloc, and losing his job.

Macron, who was pushing for grants to stay at €400 billion, said he would rather walk away than make a bad deal.

In a bid to break the deadlock, Michel came up with a new proposal this morning, which a diplomat said could be a “route to a deal”.

“A plan with 390 billion in grants but smaller rebates for the Frugals,” a European official explained.

In a promising sign for Michel’s new plan, Austrian Chancellor Sebastian Kurz tweeted his approval.

“Tough negotiations have just come to an end, we can be very satisfied with today’s result,” he wrote.

belgium-europe-summit AP / PA Images French President Emmanuel Macron. AP / PA Images / PA Images

Round after round of small group meetings went on all day yesterday as Michel, aided by Macron and German Chancellor Angela Merkel, tried to drag the Frugals and the more indebted — and virus-ravaged — on board for a compromise, but progress was painfully slow.

Veto demand

Rutte wants member states to have a veto on national economic plans by the likes of Italy and Spain, in order to oblige them to pursue reforms to borrowing and their labour and pensions markets — an effort that was angrily resisted by Italy.

Over dinner, Michel made a heartfelt speech reminding leaders of the devastating human cost of the pandemic — 600,000 dead including 200,000 in Europe — and urged them to come together to complete what he called a “mission impossible”.

“The question is this: are the 27 leaders, responsible for the people of Europe, capable of building European unity and trust?” Michel said, according to a copy of his remarks.

“Or will we present the face of a weak Europe, undermined by mistrust?”

© – AFP 2020

Your Voice
Readers Comments
This is YOUR comments community. Stay civil, stay constructive, stay on topic. Please familiarise yourself with our comments policy here before taking part.
Leave a Comment
    Submit a report
    Please help us understand how this comment violates our community guidelines.
    Thank you for the feedback
    Your feedback has been sent to our team for review.

    Leave a commentcancel