EU summit pauses after testing all-night talks

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A marathon European Union summit temporarily broke up in the early hours of Monday after four-days of acrimonious haggling over an unprecedented 1.85 trillion-euro (£1.68 trillion) EU budget and coronavirus recovery fund. The weary leaders were scheduled to resume the meeting on Monday afternoon.

The summit of the 27 EU leaders began on Friday and was scheduled to end on Saturday. Instead, deep ideological differences between leaders forced the talks into Sunday and then through the night to Monday morning.

The bitter negotiations pitted a group of five wealthy northern countries — the Netherlands, Austria, Denmark, Sweden and Finland — against southern nations hardest hit by the pandemic, supported by European heavyweights Germany and France. Leaders did not comment as they left the summit venue early on Monday.

Luxembourg’s Prime Minister Xavier Bettel (rights) waits for his car after talks broke up before dawn

On Sunday, EU Council president Charles Michel implored the leaders to overcome their fundamental divisions and agree on the unprecedented 1.85 trillion-euro package. After three days of fruitless talks, Michel conjured up during an official dinner the vision of the 600,000 dead that Covid-19 has claimed around the world and the unprecedented recession it has wrought on the bloc.

“Are the 27 EU leaders capable of building European unity and trust or, because of a deep rift, will we present ourselves as a weak Europe, undermined by distrust,” he asked the leaders at the end of another day of divisive negotiations. The text of the behind-closed-doors speech was obtained by The Associated Press.

“I wish that we succeed in getting a deal and that the European media can headline tomorrow that the EU succeeded in a Mission Impossible,” Mr Michel said.

Early on the fourth day of talks the leaders still had not reached a compromise. As dawn broke on Monday, they were still in the marathon summit after haggling through the night over the size and terms of the recovery fund.

Even with German Chancellor Angela Merkel and French President Emmanuel Macron negotiating as the closest of partners, the traditionally powerful Franco-German alliance could not get the bloc’s 27 quarrelling nations in line.

Whether there will be a solution, I still can’t say

Often negotiating outdoors on a sundeck in the Europa summit centre in Brussels, the blue skies and fresh breeze had no impact on the mood. Undiplomatic terms like “hate” and “grumpy” have been thrown around between leaders during marathon negotiations designed to draw the EU closer together to fight a historic recession in the bloc.

“Whether there will be a solution, I still can’t say,” Mrs Merkel said on Sunday. The pandemic has sent the EU into a tailspin, killing around 135,000 of its citizens and sending its economy into an estimated contraction of 8.3% this year.

The bloc’s executive has proposed a 750 billion-euro (£684 billion) coronavirus fund, partly based on common borrowing, to be sent as loans and grants to the countries hit hardest by the pandemic.

German Chancellor Angela Merkel arrived early for Sunday’s talks

That comes on top of the seven-year 1 trillion-euro (£910 billion) EU budget that leaders have been haggling over for months even before the pandemic hit.

All nations agree they need to band together but five richer countries in the north, led by the Netherlands, want strict controls on spending, while struggling southern nations like Spain and Italy say those conditions should be kept to a minimum.

At their dinner table on Sunday night, the leaders could mull a proposal from the five wealthy northern nations that suggested a coronavirus recovery fund with 350 million euros (£319 million) of grants and the same amount again in loans.

The five EU nations nicknamed “the frugals” — the Netherlands, Austria, Finland, Sweden and Denmark — had long opposed any grants at all. Mrs Merkel and Mr Macron walked out of heated talks before dawn on Sunday with the frugals, bemoaning their lack of commitment to a common cause.

“They ran off in a bad mood,” Dutch Prime Minister Mark Rutte said.

Mr Rutte has long been known as a European bridge builder, but this weekend his tough negotiating stance is being blamed for holding up a deal. He and his allies are pushing for labour market and pension reforms to be linked to EU handouts and a “brake” enabling EU nations to monitor and, if necessary, halt projects being paid for by the recovery fund.

“He can’t ask us to do specific reforms,” Italian Prime Minister Giuseppe Conte said. “Once (the aid) is approved, each country will present its proposals.”

Another member of the frugals, Austrian Chancellor Sebastian Kurz, said he still believed a deal was possible, but there is a “long way to go,” the Austria Press Agency cited him as saying.

Mr Rutte also wants a link to be made between the handout of EU funds and the rule of law — a connection aimed at Poland and Hungary, countries with right-wing populist governments that many in the EU think are sliding away from democratic rule.

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