BRUSSELS (Reuters) – Signs emerged that leaders of northern European Union countries were ready to commit to a 1.8 trillion euro (2 trillion) coronavirus stimulus plan on Monday as talks in Brussels they extended to a fourth day.
Divided and slow to respond to the start of the coronavirus outbreak in Europe, EU leaders believe they now have a chance to redeem themselves with an aid plan that shows Europeans that the bloc can react to a crisis.
But old complaints between the countries least affected by the pandemic and the indebted countries of Italy and Greece, whose economies are in free fall, have resurfaced, pitting Rome against The Hague and its allies in Stockholm, Copenhagen and Vienna.
Given that leaders are not expected to restart until 1400 GMT, much relied on the efforts of European Council President Charles Michel to present a new basis for an agreement, taking into account the competitive demands of the north and south of Europe.
“An agreement is a necessity,” French Finance Minister Bruno Le Maire told French BFM TV on Monday as tired diplomats slept or prepared for another day at what could be the longest EU summit. .
In the early hours of Monday, French President Emmanuel Macron lost patience with “sterile blocks” from the Netherlands, Sweden, Denmark and Austria, which were later joined by Finland, slamming his fist on the table, a diplomat said .
Another diplomat confirmed the outbreak and said tensions escalated until Belgium Prime Minister Sophie Wilmes called for calm.
Michel previously urged the 27 leaders to accomplish the “impossible mission”, reminding them that more than 600,000 people had died from COVID-19 worldwide.
That seemed to lean toward potential advance.
“We are not there yet, things may still fall apart. But it seems a little more hopeful than the moments when I thought last night that it was all over, “said Dutch Prime Minister Mark Rutte.
Within the € 750 billion recovery fund, € 390 billion could be considered non-reimbursable grants, diplomats said, a compromise between the € 350 billion level of the five “frugal” and the € 400 billion demanded by France and Germany.
There was no immediate clarity on whether an agreement was being made, but Austrian Chancellor Sebastian Kurz told ORF radio that he was satisfied with the negotiations.
“It was definitely the best decision the frugal group … ever formed,” Kurz said. “We were four, now we are five. These are all small countries, which alone would have no weight. ”
THE ECB ASKS FOR AMBITION
Problems related to linking payments to economic and democratic reforms had not yet been resolved, although Spain expressed its willingness to tolerate some conditions linked to aid.
“We do not reject conditionality,” Foreign Minister Arancha González Laya told SER de Cadena radio. “We need a foundation that gives us and our partners confidence.”
European Central Bank (ECB) President Christine Lagarde warned against a swift deal at any cost.
“Ideally, the leaders’ agreement should be ambitious in terms of package size and composition … even if it takes a little longer,” he told Reuters.
Lagarde’s comments suggested that she was relaxed about any adverse reaction in the financial markets if the summit fails, especially since the ECB has a war chest of more than 1 trillion euros to buy public debt. [MKTS/GLOB]
“The markets are in a wait and see mode,” said David Madden, an analyst at CMC Markets in London. “Now that there is going to be a higher percentage of loans and a lower percentage of subsidies, that will put more pressure on heavily indebted economies.”
($ 1 = 0.87 euros)
Additional reports from Reuters offices; Editing by Angus MacSwan
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