" New proposals " on the recovery plan are expected Saturday, the second day of the EU summit, to try to convince the frugal, Austria and the Netherlands in the lead, and move towards an agreement between the 27, according to a European source. The President of the European Council, Charles Michel, will " test new proposals this morning ", first with small groups of countries, then before the 27, explained a European source on the second day of this summit.
The size of the plan, the distribution between grants and loans, and the conditions for receiving the money are at the heart of the disagreements. The first day, Friday, ended in a certain tension, because of the position considered too hard of the Netherlands on the control of the funds which could be distributed and more generally of the reluctance of the three other " frugal " - Austria, Sweden, Denmark - on this stimulus plan.
" We will try to take things differently to save the summit, " said a diplomatic source. According to concordant sources, German Chancellor Angela Merkel, French President Emmanuel Macron and Charles Michel met after dinner Friday evening to coordinate before Saturday.
It is the first time in five months, due to the Covid-19 pandemic, that the Heads of State and Government - all wearing protective masks - have been physically in Brussels.
A recovery plan of 750 billion euros
At the heart of the discussions: a 750 billion euro post-coronavirus recovery plan financed by a joint loan, inspired by a proposal by Angela Merkel and Emmanuel Macron. This plan is made up of 250 billion loans, and especially grants of up to 500 billion, which will not have to be reimbursed by the beneficiary States. It is backed by the long-term EU budget (2021-2027) of 1.074 billion euros.
The four “frugal” countries, joined by Finland, have deep reservations about this proposal, which should primarily benefit Italy and Spain, two states very affected by the pandemic, but which they consider to be the most lax in budgetary matters. The project foresees that the money will be paid in return for reforms carried out by the beneficiary countries. However, the Dutch Prime Minister, Mark Rutte, demands that the reform plans of each state be validated unanimously by the 27, and not by qualified majority. In summary, a de facto veto, which he is the only one, according to several sources, to formulate.
The reforms required by the countries of the North (labor market, pensions, etc.), in return for aid, also make the southern states jump, anxious to be forced to submit to a program imposed by others, like Greece at the height of the eurozone crisis. With the unanimity of the Member States being required, discussions could be long and difficult on Saturday, or even extend to Sunday.