EU bloc's 750 billion euro COVID-19 recovery deal: All you need to know
The EU COVID-19 recovery deal was reached alongside agreement on the bloc's next seven-year budget, worth about 1.1 trillion euros. The agreement will see the 27-nation bloc offering 750 billion euros ($858 billion) in grants and loans to counter the economic impact of the pandemic.
The leaders of the European Union have finally agreed on a landmark 750 billion euro ($858 billion) deal to fund the bloc’s recovery from the COVID-19 pandemic, at a pre-dawn meeting on Tuesday after a fractious summit that went through the night and into its fifth day.
The agreement would focus on providing funding across three pillars: Creating reforms to help businesses rebound from the pandemic, rolling out new measures to reform economies over the long haul, and investing to help protect from "future crises."
After the 27 leaders reached agreement at a 5.15 a.m. (0315 GMT) plenary session, European Council President Charles Michel announced the outcome on social media: “Deal!”
Deal!— Charles Michel (@eucopresident) July 21, 2020
While another official present at the summit said: "Conclusions adopted!" French President Emmanuel Macron hailed it as a “historic day for Europe.”
"Never before did the EU invest in the future like this," Belgian Prime Minister Sophie Wilmès tweeted.
The deal was reached alongside agreement on the bloc's next seven-year budget, worth about 1.1 trillion euros.
The summit, which began in Brussels on Friday morning, saw more than 90 hours of talks and became the EU's longest since a 2000 meeting in the French city of Nice, which lasted for five days.
CORONAVIRUS STIMULUS PACKAGE
Officials said the deal, which came after Michel presented compromises on a 750 billion euro recovery fund, is critical to dispel doubts about the bloc's very future.
The EU was slow to coordinate its initial response to the COVID-19 pandemic and, already weakened by Britain's departure from the bloc, a united front on economic aid would demonstrate that it can step up to a crisis and stay united.
"It has been a long summit and a challenging summit but the prize is worth negotiating for," Irish Prime Minister Micheal Martin said as the Brussels summit approached the record length set at a 2000 meeting in the French city of Nice of almost five full days.
European nations have done a better job of containing the coronavirus than the United States after a devastating early few months that hit Italy and Spain particularly hard, collaborating on medical, travel and economic fronts.
The European Central Bank has pumped unparalleled money into economies to keep them going, while capitals hammer out their recovery fund.
Diplomats said the leaders appeared to put aside the rancour that stood in the way of a compromise over hours of haggling through the weekend.
'STINGY AND EGOTISTICAL'
Emotions had ran high at a dinner on Sunday as a group of fiscally frugal northern nations led by the Netherlands stood their ground on the level of free grants within a proposed special recovery fund of 750 billion euros overall.
Member states were largely split between those hit hardest by the outbreak and keen to revive their economies, and those more concerned about the costs of the recovery plan.
The self-proclaimed frugal four -- Sweden, Denmark, Austria and the Netherlands -- along with Finland, had opposed allowing 500 billion euros to be offered in the form of grants to countries hardest-hit by the COVID-19 pandemic, reported the BBC.
The group, led by Dutch Prime Minister Mark Rutte, originally set 375 billion euros as the limit, in addition to wanting conditions such as the right to block requests, the report said. Other members, such as Spain and Italy, did not want to go below 400 billion euros.
Macron lost patience in the early hours of Monday, banging his fist on the table in frustration at "sterile blockages" by the "frugals", two diplomats said, Reuters reported.
The 390 billon euros figure was suggested as a compromise, and "frugal" nations were reportedly won over by the promise of budget rebates, according to the BBC.
Polish Prime Minister Mateusz Morawiecki also railed against the "frugals", branding them "a group of stingy, egotistic states" that looked at things through the prism of their own interests. Poland would be a top beneficiary of the recovery package, receiving tens of billions of euros in grants and cheap loans, along with high-debt Mediterranean-rim countries that have taken the brunt of the pandemic in Europe.
But the rhetorical skirmishing faded on Monday, and the leaders homed in on an agreement on the stimulus package and, linked to it, the EU's 2021-2027 common budget of around 1.1 trillion euros. Hopes for a deal to help address Europe's deepest recession since World War Two sent Italy's borrowing costs to their lowest since early March and pushed the euro to a 19-week high.
Michel proposed that within the 750 billion euro ($858 billion) recovery fund, 390 billion should be non-repayable grants, down from 500 billion originally proposed, and the rest in repayable loans.
The Netherlands had pushed for a veto on aid for countries that backslide on economic reform, but diplomats said it was now willing to back a "stop-the-clock" mechanism by which member states could put a brake on disbursements for three months and have them reviewed.
Disbursements will also be linked to governments observing the rule of law. Hungary, backed by eurosceptic ally Poland, had threatened to veto the package if funds were made conditional on upholding democracy, but diplomats said a way forward on that was found.