European Union leaders have finally clinched an unprecedented €1.82 trillion budget and coronavirus recovery fund. The leaders finalised the agreement in Brussels in the early hours of Tuesday morning, finding unity after four days and nights of fighting and wrangling over money and power in one of their longest ever summits.
To confront the biggest recession in its history, officials said the EU had a consensus on a €750 billion coronavirus fund to be sent as loans and grants to the countries hit hardest by the virus. That comes on top of the seven-year €1 trillion EU budget. At first the grants were to total €500 billion, but the figure was lowered to €390 billion.
Speaking after the agreement, Taoiseach Micheál Martin said: “I welcome what is a very substantial and significant package of measures, €1.8 trillion, which I think will go a long way to help to reboot and re-engineer economic recovery in the European Union.
“It has been a very challenging number of days negotiating this package but it been worthwhile,” he said.
Other European leaders welcomed the agreement and acknowledged the extraordinary length of the negotiations.
“Never before did the EU invest in the future like this,” Belgian prime minister Sophie Wilmes said.
“It is a historic day for Europe,” said French president Emmanuel Macron, who earlier reflected on some “extremely tense moments” during the marathon summit.
Just shy of being the longest EU summit in history, the 27 leaders huddled back in the main room of the Europa centre and bumped elbows and made jokes before giving the package the final approval.
“Deal!” wrote summit host Charles Michel on Twitter.
What was planned as a two-day summit scheduled to end on Saturday was forced into two extra days by deep ideological differences among the leaders. But overall, spirits were high early Tuesday since the talks hit rock bottom Sunday night.
The coronavirus has sent the EU into a tailspin, killing around 135,000 of its citizens and plunging its economy into an estimated contraction of 8.3 per cent this year. Spanish prime minister Pedro Sanchez insisted the adoption of an ambitious plan was required as the health crisis continued to threaten the continent.
With Mr Macron and German chancellor Angela Merkel negotiating as the closest of partners, the traditionally powerful Franco-German alliance could not get the quarrelling nations in line for long.
The leaders mulled a proposal from the five wealthy northern nations – the Netherlands, Austria, Finland, Sweden and Denmark – that suggested a coronavirus recovery fund with €350 billion of grants and the same amount in loans. The five nations, nicknamed “the frugals”, had long opposed any grants at all, while the EU executive had proposed €500 billion.
The latest compromise proposal stands at €390 billion in grants.
All nations agree in principle they need to band together but the five richer countries in the north want strict controls on spending. Struggling southern nations like Spain and Italy say those conditions should be kept to a minimum.
The five have been pushing for labour market and pension reforms to be linked to EU handouts, and for a “brake” enabling EU nations to monitor and, if necessary, halt projects that are being paid for by the recovery fund.