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Stimulus package in Europe: endless closed-door negotiations in Brussels

2020-07-20T05:13:33.431Z


Three days ! It has been three days since the heads of state and government of the 27 countries of the European Union have been locked up in an attempt to t


White smoke or black smoke? Sunday, July 19 in the evening, on the third day of a marathon summit (it would normally have ended on Saturday), the 27 leaders of the member countries of the European Union meeting in Brussels still had not reached an agreement on a massive post-Covid-19 recovery plan. But neither had they broken off the talks and packed up, as German Chancellor Angela Merkel feared earlier today. One certainty, however: the plan - if it ends up coming out - will be less flamboyant than that concocted by the European Commission of 750 billion euros (divided into 500 billion euros in grants and 250 billion euros in loans), s itself inspiring the Franco-German agreement on debt pooling.

At the entrance of the umpteenth "decisive dinner" of the 27 in the austere Justus Lipsius building, the Belgian Charles Michel, host of the summit as president of the European Council, put the restive "frugal" countries ("stingy" in language less diplomatic), at the foot of the wall. In agreement with Angela Merkel and Emmanuel Macron, he put on the table a downward proposal of 400 billion euros in subsidies (non-repayable), while the initial plan provided for 500 (the overall envelope of 750 billion d 'euros also likely to be revised slightly lower). The Elysée had however trumpeted in advance that it was a "red line".

"We will not go lower"

It was therefore necessary to give in to the intransigence of the four "frugals" - the Netherlands, Austria, Denmark, Sweden - supported by Finland. "But this time, warned in essence Charles Michel, we will not go lower, take it or leave it." "And no question either, completes a diplomat privately, that they continue to haggle for an increase in their rebate on the Community budget in exchange for an agreement on the plan". Atmosphere…

In fact, the rich countries of the North, with well-managed budgets unlike the "cicadas" of the South, have been demanding less subsidies and more repayable loans from the start, and consider the overall amount of the plan excessive. "Either this small group behaves like a new United Kingdom seeking to maximize its advantage, or it decides to play in the European spirit and we move forward," annoys a diplomat experienced at these summits. Clearly, the dinner was to serve as the basis for an agreement on 400 billion euros in transfers (38 of which would go to the national French recovery plan, 60 to Italy, etc.), or to note the failure . The "frugal" then bear the responsibility for abandoning or postponing an urgent recovery plan in the face of the pandemic.

A sign of the high tension reigning in Brussels on Sunday, some leaders of the "frugals" would have discreetly put pressure on their counterparts in the South or the East, threatening them with attacks on the financial markets against their economies if they signed a recovery plan. " lax ". Christine Lagarde, the owner of the all-powerful European Central Bank (ECB), had to publish a press release encouraging Europe to commit to an "ambitious agreement", to calm the spirits. In the Brussels night, the marathon continued…

Source: leparis

All news articles on 2020-07-20

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