Clock ticking on EU recovery deal

24 Jun 20

EU leaders have just three weeks to find common ground on a €750bn post-coronavirus recovery programme, with wrangling continuing over whether countries should be paid in grants or loans.

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Merkel and Macron

German chancellor Angela Merkel with French president Emmanuel Macron

 

French president Emmanuel Macron yesterday met his Dutch counterpart Mark Rutte, who has been leading a group of fiscally conservative northern countries opposed to Macron’s proposals, to discuss the plans.

Through his proposals, poorer European countries and those hit hardest by Covid-19 could receive up to 15% of their gross national income in grants and guarantees.

“We knew how to stand together during the health crisis. We must remain together to overcome the economic and social crisis that Europe is going through,” Macron said on Twitter ahead of the meeting.

Macron and German chancellor Angela Merkel are the architects of the proposals, and both are trying to win support for their plan, through which they hope to ensure the strength of the single market.

“By the European Council meeting [on 17-18 July], we must convince our partners of this Franco-German agreement. Negotiations are progressing and everyone must be heard,” Macron said.

He added afterwards that he is “convinced that [Europe] will find common ground”.

Macron and Merkel agree that the recovery fund should be made up of €500bn in grants and €250bn in repayable loans.

European Commission president Ursula von der Leyen said this would be “nothing new”, because the EU budget has “always comprised grants”, and backed the scheme to protect the single market and “help rebalance balance sheets across Europe”.

But a group of frugal northern countries, including the Netherlands, Denmark, Austria and Sweden, think the suggested fund is too large, and would prefer loans to make up a higher proportion.

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