The EU is giving itself until July to agree on a recovery plan

Photo: Kevin Tribouillard agence France-Presse
Several european leaders insist on the need to reach an agreement before ” the summer break “, despite ” differences of opinion “.

Céline Le Prioux – Agence France-Presse and

Clément Zampa – Agence France-Presse

in Brussels

June 20, 2020

• Economy

European leaders have begun a race against the clock to reach agreement before the end of July on a recovery plan post-coronavirus solid, despite the deep differences on Friday during the first round table conference.

“There is an emerging consensus, which is very positive, but it’s also important not to under-estimate the difficulties “, summarised the president of the european Council, Charles Michel, chief conductor of the summit.

The Belgian must now start consultations with the member States to present, probably before the end of June, a revised proposal of the plan for the moment set at 750 billion euros — is intended to leave the Old Continent of a historic recession. A “top physical” should then be organized in “mid-July” in Brussels, a format that would facilitate discussions on a topic as urgent as complex, requiring the unanimity of the member States.

This is not an exaggeration to say that we are facing the greatest economic challenge in the history of the european Union

— Ursula von der Leyen

According to the president of the european Commission, and Ursula von der Leyen, several leaders stressed the need to reach an agreement before ” the summer break “, despite ” differences of opinion “. “We had the feeling that there was the desire to find this agreement. That there was a space of negotiation and consensus possible, ” said the Elysée.

But this will require overcoming the reluctance of the four “frugal” Countries — the netherlands, Austria, Sweden, Denmark — very reserved on this project, which will benefit primarily the countries of the South. Their leader, the Dutch prime minister, Mark Rutte, has also expressed doubts about the ability of Europeans to agree upon July.

An agreement would mark a major step in the european construction, because this sum would be for the first time taken on behalf of the EU on the markets, breaking the taboo of a common debt of the 27. The German chancellor, Angela Merkel, has welcomed in a press conference that the principle of debt common is ” challenged by person “.

“This is not an exaggeration to say that we are facing the greatest economic challenge in the history of the european Union “, she stressed. “Europe must be at the height of the Story […] Find an agreement at 27 in July !” added the French president, Emmanuel Macron, on Twitter.

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750 billion euros

The virtual summit on Friday, before all, permit each officer to give his opinion on the proposal of the Commission to support a european economy struggling and that relies on the long-term budget of the EU (2021-2027). The text currently on the table provides a “device recovery” of 750 billion euros, largely based on the initiative of Angela Merkel and Emmanuel Macron — an alliance of weight in the debate. This fund complements a revised proposal for the EU budget for 2021-2027, 1100 billion euros, on which the member States must also agree.

On the $ 750 billion, 500 billion would be redistributed in the framework of the european budget in the form of grants to the countries most affected by the coronavirus, such as Spain and Italy, and 250 billion euros in the form of loans.

But the 27 still need to overcome major differences, whether it be the amount of the plan, its duration, the balance between loans and grants, criteria for the distribution of aid, as well as the delicate issue of ” conditionality “, that is to say the counterparty (e.g. reforms) required of a State in exchange for these funds.

The “frugal” require a level of spending is much less than the 750 billion announced, which should compel Charles Michel to plane a little amounts in its new proposal. And they plead for loans, that each State will therefore have to repay, rather than grants, with repayment terms to 27 have not been defined.

The chancellor of austria, Sebastian Kurz, has warned against a perpetuation of the debt : the assistance provided should be “one-off” and ” limited in time “, he warned, according to the agency APA.

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