We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
European sources have indicated the differences in position over the €1.75trillion spending spree are too great to bridge. Facing the bloc’s worse recession since the Second World War, leaders will meet in Brussels tomorrow for face-to-face talks for the first time since the pandemic exploded onto the Continent. Under the proposals to be discussed, the European Commission would borrow €750billion on international markets to help fund aid packages for the worst-hit regions and industries.
A €500billion share would be distributed in the form of grants while the remaining €250billion would be made available as low-cost loans.
Alongside the recovery fund, Charles Michel, the European Council’s president, has put forward a €1.074trillion proposal for the EU’s next seven-year budget.
But both propositions have attracted significant opposition from member states, who have to unanimously sign off on the package.
A senior EU official said: “We believe an agreement can be reached and we will push for this but there are still differences between delegations.”
But officials and diplomats are not confident the breakthrough will be made during this week’s summit, which some say could run into Sunday.
“I don’t know how this will pan out,” the official added.
One hotly contested topic is the so-called governance structure used to ensure funds aren’t misspent once they arrive in member states.
The Netherlands, who have pitched themselves as the most vocal opponents to bailout package, are demanding a degree of conditionality attached as the price for accessing the war chest.
Mark Rutte’s government have proposed for the Commission to judge whether capitals have implemented the necessary economic reforms before they receive their handout.
Italy and Spain, who are set to be the main benefactors of the fund, have opposed strings being attached to the fund.
Other capitals are concerned with rule-breakers Hungary and Poland having access to the recovery fund while there is ongoing probes into alleged rule of law breaches by the two states.
A senior EU diplomat said: “There are many other issues, mostly financial to be dealt with. But there are some non financial issues and this is one of them.”
Budapest has threatened to veto any potential deal if a rule of law mechanism is introduced into the package.
The diplomat added: “If that’s the case, then we should also be prepared to build a bridge for this governance issue.
“It’s quite difficult to accept the argument that it is not possible. There are 27 countries trying to agree to this next generation system.
“So we have to come to a compromise which satisfies us all.”
Source: Read Full Article