Merkel warns of possible European Union summit failure

Cornelia Mascio
Luglio 20, 2020

The new plan, offered by the European Union council chief comes as the bloc's members are struggling to negotiate a 1.85-trillion euro ($2.1 trillion) budget, as well as the 750-billion euro ($857 billion) fund, created to help those countries hardest hit by the coronavirus pandemic.

At the start of what she said was probably the "decisive" third day of the extraordinary summit, German Chancellor Angela Merkel said there were still many divisions among the leaders, and so it proved.

"I still can't say whether a solution will be found", she said. "There is a lot of good will, but there are also a lot of positions".

Italian Prime Minister Giuseppe Conte had earlier accused the Netherlands and its allies Austria, Sweden, Denmark and Finland of "blackmail".

President of the European Council Charles Michel (L), Germany's Chancellor Angela Merkel (C), France's President Emmanuel Macron (2nd R) and President of the European Commission Ursula von der Leyen talk during a meeting at the first face-to-face EU summit since the COVID-19 outbreak, in Brussels, Belgium, on July 19, 2020. A deal envisaging 400 billion euros in grants - down from a proposed 500 billion euros - was rejected by the thrifty north, which said it saw 350 billion euros as the maximum.

The coronavirus has now killed almost 600,000 people and infected over 14 million as it continues to surge across the globe despite months of unprecedented lockdowns.

The new proposals reduce the proportion of straight-out grants in the rescue package and raise the proportion of loans that will need to be paid back, in an apparent nod to a group of "frugal" nations led by the Netherlands, the diplomat said.

The EU executive has proposed a 750-billion euro fund, partly based on common borrowing, to be sent as loans and grants to the most needy countries.

Meanwhile, Hungary, backed by its eurosceptic ally Poland, has threatened to veto the package over the rule of law mechanism, supported by the Dutch.

Macron said there was a willingness to compromise, but it should not deter "from the legitimate ambition that we need to have", referring to the level of money available in the planned 750 billion euro recovery fund, which is to be funded by money raised on capital markets.

But a Spanish diplomatic source said that the two sides were so far apart that they were not even discussing details.

Even with Merkel and French President Emmanuel Macron negotiating as the closest of partners, the traditionally all-powerful Franco-German alliance could not get the bloc's 27 quarrelling countries in line.

By the end of the afternoon, there was still no deal in sight, Austria's chancellor said.

"On the one hand, the overwhelming majority of countries, including the largest Germany, France, Spain, Italy, defending the European institutions and the European project, and on the other, a few so-called "frugal" countries", Conte wrote.

Underlying Dutch concerns is the reputation of Spain and Italy for lax public spending in the minds of voters in northern Europe, and Mr. Rutte wants them to reform their labour and pensions rules.

Diplomats said it was not clear whether they would abandon the summit and try again next month, or plough on through the night.

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